The move aligns with IIFCL's broader objective to diversify its borrowing portfolio and increase the share of green projects within its overall portfolio mix
India Infrastructure Finance Company Ltd. (IIFCL) is gearing up to raise Rs 2,000 crore through its debut green bonds within the next six months to finance sustainable projects.
P.R. Jaishankar, Managing Director of IIFCL, said that the fundraising strategy may involve a combination of domestic and foreign issuances, contingent on the cost of funds. Jaishankar highlighted the potential exploration of yen-denominated green bonds, possibly occurring in the current or initial quarter of the upcoming financial year.
Jaishankar stated that sustainable green bonds are one of our significant areas of focus. The yen is one of the major currencies we are considering, but we are also exploring other currencies. However, the final decision on which currency to choose will depend on its cost-effectiveness, including hedging and overall borrowing costs. If a better option is available domestically, we will choose that. If the yen offers better returns, we will opt for the yen.
This move aligns with IIFCL's broader objective to diversify its borrowing portfolio and increase the share of green projects within its overall portfolio mix. The company's interest in green bonds follows the recent success of the State Bank of India (SBI), which raised USD 250 million (approximately Rs 2,000 crore) through the issuance of green bonds maturing in 2028 via private placement.
Jaishankar expressed confidence in IIFCL's performance, anticipating a profit exceeding Rs 1,500 crore for the fiscal year 2024. In fiscal year 2023, the company reported a substantial two-fold increase in standalone net profit, reaching Rs 1,076 crore, attributed to increased lending and reduced bad loans. IIFCL achieved record sanctions and disbursements at Rs 29,171 crore and Rs 13,826 crore, respectively.
As of December 2023, the company has already earned a profit of Rs 1,189 crore, with loan sanctions totaling Rs 30,315 crore, surpassing the figures from the previous fiscal year in just three quarters. Jaishankar expects the loan sanction amount to surpass Rs 40,000 crore by March 2024, reflecting strong demand.
Highlighting IIFCL's role in funding the next phase of infrastructure growth, Jaishankar emphasised the need for reforms to elevate the infrastructure sector to new heights. Despite challenges, the company's gross non-performing assets (NPAs) and net NPA ratios have consistently declined, standing at 3.77 percent and 0.85 percent, respectively, as of September 30, 2023.