NaBFID to Borrow $1B from Foreign Shores in FY26

Mumbai, Aug 26 (PTI) The National Bank for Financing Infrastructure and Development (NaBFID) is targeting to raise up to USD 1 billion from the international markets in FY26, a top official said on Tuesday.

Rajkiran Rai, the managing director of the Development Finance Institution (DFI), said the 2021-incorporated company has received its international ratings as well recently and the fundraising will be split between external commercial borrowing (ECB) and bond routes.

"We will be ready to launch (a fund raise) in a month's time, but the actual outcome will be decided by the market conditions," Rai told reporters on the sidelines of the annual Fibac event here.

He said the DFI is raising money as per its disbursements requirements, and the borrowings will be either domestic or international in nature.

Speaking at the same event, banking industry lobby grouping IBA's Chief Executive Atul Kumar Goel said India is among the fastest-growing economies, and the economic model of the country is very promising.

Rai said he does not see any impact of the US tariffs on the disbursements being done by NaBFID and also added that India has the capacity to handle the impact of the US move.

Hardening of yields in the domestic market have led to a 0.10-0.15 per cent increase in the cost of domestic borrowings, he said, adding that a call on the route will be taken basis the final cost.

The DFI has a pipeline that includes sanctioned limits of up to Rs 2.4 lakh crore, of which about Rs 90,000 crore is likely to be disbursed.

Earlier, Rai stressed for a need to fasten project launches for higher economic growth.

"Good projects are getting funded, but there has to be more demand (project launches)," he said, adding that project pipelines are not adequate.

The entire financial system will be "very happy" to provide the debt support to the project, he added.

Rai also said there is a need for more activity in the municipal bond issuances, and added that NaBFID has also created an advisory arm to cash-in on the demand.

Over the next five years, up to 500 local bodies should access funds from the municipal bonds market as against seven issuances till now, he said.

Lack of ratings and balance sheets to show financial muscle to investors are among the biggest of impediments for municipal bond issuances, he said.

Meanwhile, amid concerns on the benefits accruing to banks despite investing heavily in technology, state-run Bank of Baroda's MD and CEO Debdatta Chand said lenders have "no choice" but to spend in such aspects and added that significant benefits have come to his bank because of it.

He also said payment charges on unified payments interface (UPI) is a game changer and charges on the same will evolve at some point as stakeholders come together.