Rai stated that the institution is also looking to raise capital by issuing longer-tenure bonds in the domestic market this fiscal year, but he did not provide a cost estimate or a time frame.
According to Rai, the agency is well-capitalized with initial capital of 200 billion rupees ($2.42 billion) and grants of 50 billion rupees, so there is no immediate need to raise money.
Ratings for the National Bank for Financing Infrastructure Development's bond issuances are anticipated by December.
He added that pension funds and insurance companies in particular have a strong appetite for long-term bonds and that they plan to invest a combined 2.5 trillion rupees ($30.22 billion) in long-term bonds next year.
Because investors will need to be compensated for taking on more risk over a longer period of time, Rai said the government-owned funding agency will make sure the risk pricing is done correctly on its bonds. In order to price its bonds, the agency will establish its own benchmark.
Rai did not specify a financing goal because the agency is still developing its business plan and evaluating the pipeline of projects.
In its February 2021 budget, the Indian government had announced the creation of this financial institution to finance crucial infrastructure projects across the country. Since Rai was appointed MD in August, the organisation is now putting together a team.
In addition to working on some projects with National Investment and Infrastructure Fund (NIIF) Infrastructure Finance, the agency is looking to finance both greenfield and brownfield projects.
NaBFID has been set up as a Development Financial Institution (DFI) to support the development of long-term infrastructure financing in India.
The National Bank for Financing Infrastructure and Development (NaBFID) Act, 2021 received the assent of the President on 28 March, 2021 and was enforced on 19 April, 2021
(With inputs from Reuters)
