NBFCs tap $3.67 billion in overseas syndicated loans, more than double 2024 levels

Loans garnered from overseas syndicates so far this year by Indian non-bank lenders more than doubled from what they raised in the whole of 2024, reflecting cheaper pricing, a larger pool of interested banks, and favourable tax treatment on the funds raised offshore.

Data accessed by ET from the LSEG Loan Connector, a global loan data website, showed that Indian NBFCs raised $3.67 billion so far in 2025 from the syndicated loan market overseas, compared with $1.64 billion garnered in the whole of 2024.

The fundraising climbed sharply despite an 2.35% depreciation in the rupee against the US dollar so far in 2025, following protracted outflows from equity assets in the aftermath of tariffs. Banks participating in such loans carry repayment risks inherent in a depreciating currency.


Bankers said that increasing loan deals for Indian NBFCs show more overseas banks are willing to commit loan funds to Indian companies.

Chetan Joshi, managing director and head of debt finance at HSBC, the top syndicator of loans, said over the last year or so, such deals of Indian NBFCs have gained traction because of relatively better pricing compared with international bonds, a quest for diversification of funding sources, and wider acceptability for local firms in the overseas bank market.

"Floating rate loans that are mostly linked to the three month SOFR (Secured Overnight Funding Rate) have become cheaper as credit spreads on offshore bonds have not fallen as much,” Joshi said. “This trend of increased NBFC borrowing through syndicated loans is likely to continue this year due to the above factors."

Data shows the three-month SOFR rate eased about 100 basis points to around 4.35% from 5.35% a year ago, reflecting cheaper borrowing costs for companies. Loans in the overseas market are priced above the SOFR rate, the benchmark interest rate for overseas transactions.

'Riskier Commitments'
LSEG Loan Connector data showed a willingness among overseas lenders to climb the risk gradient.

For instance, of the $3.67 billion raised so far in 2025, about 78% - or $2.85 billion - has been raised by Indian NBFCs rated below AAA.

The story was similar last year with as much as 87% or $1.42 billion out of the $1.64 billion raised in the whole of 2024 has been raised by NBFCs rated below AAA.

In other words, the loan market is now accessible for even lower rated NBFCs.

Last week, education loan NBFC Avanse Financial Services raised $200 million through a three year loan led by HSBC and syndicated to as many as eleven banks from countries as diverse as Japan, Taiwan, Singapore and the UAE.

More importantly the loan was the company's first dual currency loan with $59 million out of the $200 million raised in yen.

Bankers say raising funds in currencies like yen help companies to reduce borrowing costs because they are priced at lower rates and also as tax liabilities are lower because some of these jurisdictions have an easier tax regime.

Vikrant Gandhi, CFO at Avanse, a AA- rated company, said the dual currency loan gives it access to cheaper funds and helps in diversification of liabilities away from the rupee.

"Loans are cheaper also because unlike a bond, there are no marketing costs involved even overseas. For a bond issue to be successful you need a diversified group of investors which is not the case in a loan. Ultimately overseas funds help in diversification of liabilities," Gandhi said.

About 25% of Avanse's Rs 16,000 crore liabilities are in foreign currency, mostly dollars. The latest loan was the third the company took from overseas, Gandhi said.