NBCC establishes shadow lender to help save over $100 mn
ECONOMY & POLICY

NBCC establishes shadow lender to help save over $100 mn

India's state-run NBCC plans to establish its own non-banking finance company (NBFC) later this year in order to reduce its borrowing costs for key infrastructure projects. The sources, who preferred not to be named as the discussions are private, stated that the construction and real estate developer anticipates that this move will enable it to save $ 108 million in interest costs over the next two years.

It was noted that while the Indian government owns infrastructure financial institutions, no other state-run company has taken steps to create a unit to aid in financing projects.

NBCC's board deliberated the proposal to establish a shadow lender in March. As per the second source, the final structure of the NBFC will be determined after June.

It was further conveyed that NBCC will seek approval for the shadow bank from the new administration to be elected in June, following the conclusion of the seven-phase national polls that commenced on April 19.

Moreover, it was indicated that the company will require a license from the Reserve Bank of India (RBI), though it has yet to submit an application for it. NBCC did not respond to emails requesting comments. According to the first source, NBCC currently pays borrowing costs of 12% to 14% to other NBFCs, and this could potentially be reduced by 1-2 percentage points if it establishes the NBFC.

"The in-house NBFC will aid in obtaining initial funding for redevelopment and monetization projects of other public sector entities," stated the first source.

It was noted that NBCC recently acquired redevelopment projects from Steel Authority of India and the Indian Railways.

India's state-run NBCC plans to establish its own non-banking finance company (NBFC) later this year in order to reduce its borrowing costs for key infrastructure projects. The sources, who preferred not to be named as the discussions are private, stated that the construction and real estate developer anticipates that this move will enable it to save $ 108 million in interest costs over the next two years. It was noted that while the Indian government owns infrastructure financial institutions, no other state-run company has taken steps to create a unit to aid in financing projects. NBCC's board deliberated the proposal to establish a shadow lender in March. As per the second source, the final structure of the NBFC will be determined after June. It was further conveyed that NBCC will seek approval for the shadow bank from the new administration to be elected in June, following the conclusion of the seven-phase national polls that commenced on April 19. Moreover, it was indicated that the company will require a license from the Reserve Bank of India (RBI), though it has yet to submit an application for it. NBCC did not respond to emails requesting comments. According to the first source, NBCC currently pays borrowing costs of 12% to 14% to other NBFCs, and this could potentially be reduced by 1-2 percentage points if it establishes the NBFC. The in-house NBFC will aid in obtaining initial funding for redevelopment and monetization projects of other public sector entities, stated the first source. It was noted that NBCC recently acquired redevelopment projects from Steel Authority of India and the Indian Railways.

Next Story
Infrastructure Urban

Reliance Pursues Access to PSU Oil Facilities

It delves into Reliance Industries' pursuit of access to the aviation turbine fuel (ATF) pipelines and storage facilities owned by public sector oil companies. This move by Reliance signifies its strategic interest in expanding its presence in the aviation fuel market, which is poised for growth as air travel continues to rebound post-pandemic. Reliance's request for access to ATF infrastructure owned by PSU (Public Sector Undertaking) oil firms aligns with its broader strategy of diversifying its energy portfolio and capturing a larger share of the aviation fuel market. By leveraging existi..

Next Story
Infrastructure Transport

Gujarat's Deendayal Port Marks Indigenous Freight Wagon Launch

The Deendayal Port Authority in Gujarat achieves a significant milestone by loading the inaugural consignment using indigenous freight wagons, showcasing a leap forward in the region's logistical capabilities. This historic moment underscores India's progress towards self-reliance in manufacturing critical infrastructure components for its transportation sector. The successful deployment of indigenous freight wagons marks a paradigm shift in the logistics landscape of Gujarat's Deendayal Port, heralding a new era of efficiency and cost-effectiveness. This development aligns with the governme..

Next Story
Infrastructure Transport

Adani Gangavaram Port Resumes Raw Material Supply

The recent resumption of raw material supply from Adani Gangavaram Port to RINL (Rashtriya Ispat Nigam Limited) after a hiatus of over a month signifies a significant development in the maritime trade sector. The interruption in the supply chain had raised concerns about potential disruptions to industrial operations and highlighted the importance of robust logistics networks in ensuring smooth business operations. The article sheds light on the reinstatement of raw material shipments, indicating a positive step towards restoring normalcy in industrial activities reliant on these supplies. Th..

Hi There!

Now get regular updates from CW Magazine on WhatsApp!

Click on link below, message us with a simple hi, and SAVE our number

You will have subscribed to our Construction News on Whatsapp! Enjoy

+91 81086 03000

Join us Telegram