Indian infrastructure firms aim to raise debt for project financing
ECONOMY & POLICY

Indian infrastructure firms aim to raise debt for project financing

A growing number of infrastructure firms in India aim to raise debt in the international markets for project funding since overseas investors find better assistance with Indian issuers across sectors and ratings.

Firms are raising money for capital expenditure and repaying loans taken from domestic lenders, and replacing them with longer tenor debt. GMR’s Hyderabad Airport, JSW Hydro Energy, Delhi International Airport and IRB Infrastructure are amongst the firms that have hit the market with project financing bonds in 2021.

Rahul Chawla, co-head, investment banking coverage at Deutsche Bank, told the media that in 2021, the main focus for them has been on project financing bonds. They have done a couple of them, where structurally, they have now begun obtaining Indian project financing, given the fact that outside of the public sector banks, there are no specialised project financing institutions in the market. Therefore they have taken them to the global investor base.

Chawla noted that the trend is still rising but offers a significant opportunity for Indian firms.

The activity is majorly on the renewable side right now, but whether it is the road sector or certain other infra-related assets, he thinks they are ready for the market to be receptive to that industry, too.

Continuum Green Energy’s $561 million bond offering and Acme’s $334 million bond sale were amongst the project financing debt agreements from the renewable sector in 2021.

Image Source

A growing number of infrastructure firms in India aim to raise debt in the international markets for project funding since overseas investors find better assistance with Indian issuers across sectors and ratings. Firms are raising money for capital expenditure and repaying loans taken from domestic lenders, and replacing them with longer tenor debt. GMR’s Hyderabad Airport, JSW Hydro Energy, Delhi International Airport and IRB Infrastructure are amongst the firms that have hit the market with project financing bonds in 2021. Rahul Chawla, co-head, investment banking coverage at Deutsche Bank, told the media that in 2021, the main focus for them has been on project financing bonds. They have done a couple of them, where structurally, they have now begun obtaining Indian project financing, given the fact that outside of the public sector banks, there are no specialised project financing institutions in the market. Therefore they have taken them to the global investor base. Chawla noted that the trend is still rising but offers a significant opportunity for Indian firms. The activity is majorly on the renewable side right now, but whether it is the road sector or certain other infra-related assets, he thinks they are ready for the market to be receptive to that industry, too. Continuum Green Energy’s $561 million bond offering and Acme’s $334 million bond sale were amongst the project financing debt agreements from the renewable sector in 2021. Image Source

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