Crisil rates India Infradebt's Rs 500 crore issue as most safe

KOLKATA: ICICI Bank-led India Infradebt Ltd, the country’s first infrastructure debt fund set up through the non-banking financial company route, has received a highest safety rating with a stable outlook for a Rs 500 crore debenture issue from Crisil Ratings.

Infradebt received its license in February 2013 from Reserve Bank of India under a new IDF-NBFC category. It is an entity designed to facilitate flow of low-cost, long-term funds raised from domestic and global debt investors to country’s capital-intensive infrastructure projects.

IDF-NBFCs will provide long-term funds to operational infrastructure projects, enabling them to refinance their existing bank loans.

Crisil expects IDF-NBFCs would have an estimated investment opportunity of Rs 20,000 crore over the next three years. However, the rating company said Infradebt could face operational risks as the concept is at a nascent stage.

India Infradebt has begun operation with Rs 300 crore. ICICI Bank hold 30% share in the company with ICICI Home Finance holding 1%, while Bank of Baroda and Citicorp Finance has 30% and 29% interest respectively. Life Insurance Corporation holds the balance 10%.

“IDF-NBFCs will benefit all stakeholders in India’s infrastructure domain. The enhanced access to long-tenure funds at lower costs will improve the equity returns to infrastructure developers,” Crisil Ratings senior director Pawan Agrawal said.

This rating sets the stage for India Infradebt to raise long-term resources to lend to completed infrastructure projects.

CRISIL expect the company twill operate within well-defined business and financial contours and benefit from a prudent management policy.