National Bank for Financing Infrastructure and Development is considering raising up to $1 billion in its debut overseas borrowing this fiscal year, as it looks to diversify funding sources, a senior official said on Thursday.
The state-run infrastructure lender could raise funds through external commercial borrowings or dollar bonds, "depending on interest rate conditions", Managing Director Rajkiran Rai G said in an interview.
"We are looking to tap the overseas market... for the first time in FY26 simply to expand our borrowing sources."
Prime Minister Narendra Modi-led government has made infrastructure a cornerstone of its economic strategy.
Mumbai-based NaBFID, which started operations in fiscal year 2023, had sanctioned loans worth over Rs 2 trillion through March-end, and aims for loan sanctions of Rs 1.2 trillion by the end of this fiscal year, Rai said.
The lender funds infrastructure projects for long durations, with over 65-70% of loans exceeding 15 years.
The firm, which lends at floating rates but borrows at fixed rates, has hedged about 70% of its bond borrowing using interest rate derivatives, Rai said.
Derivatives are primarily available for tenures of up to 10 years, limiting the feasibility of the firm issuing so-called ultra-long-term bonds, the official said.
NaBFID has borrowed around Rs 80 billion in the local bond market so far this fiscal and plans to raise another Rs 350 billion to Rs 400 billion before the fiscal year ends in March, according to Rai.
Last fiscal, the firm borrowed Rs 169 billion through bonds, as per Reuters data.
NaBFID is working with multilateral institutions like the World Bank and Asian Development Bank to develop tools like credit enhancement for infrastructure bonds, Rai said.
