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India Infrastructure Finance Company Ltd (IIFCL) is planning to mobilise up to USD 1 billion in long-term commercial debt during the ongoing quarter through a guarantee structure supported by the Multilateral Investment Guarantee Agency (MIGA), part of the World Bank Group. The proposed fundraising, currently under approval, will not carry a sovereign guarantee and is intended to reduce pressure on the public exchequer while supporting infrastructure financing. The state-owned lender is in advanced discussions with global banks for a 15-year tenure borrowing. The move follows IIFCL's recent overseas fundraising success, including a USD 500 million issue from Japan. The company continues to strengthen its balance sheet, reporting improved profitability and maintaining low non-performing assets.
India Infrastructure Finance Company Ltd (IIFCL) is planning to mobilise up to USD 1 billion in long-term commercial debt during the ongoing quarter, supported by a guarantee mechanism from the Multilateral Investment Guarantee Agency (MIGA), to finance infrastructure projects without relying on sovereign backing. Advertisement
The proposed fundraising, currently under the approval process, is being structured in collaboration with MIGA, a World Bank Group entity that provides risk guarantees to facilitate cross-border investments in developing economies. According to the company's managing director, the structure is designed to raise funds without sovereign guarantee, thereby reducing the financial burden on the government while enabling access to international capital.
IIFCL is in advanced discussions with three to four global banks to raise the funds with a tenure of around 15 years. Officials indicated that the transaction could be completed within the current quarter, subject to approvals and prevailing global market conditions, which remain uncertain.
The initiative forms part of the company's broader strategy to diversify its funding sources and strengthen its capacity to finance long-term infrastructure projects. The external commercial borrowing (ECB) is aligned with the typical amortisation profile of infrastructure loans, which are generally structured over longer durations and benchmarked to floating interest rates.
In the previous financial cycle, IIFCL had successfully raised USD 500 million from international markets, including Japan, a market known for its stringent lending conditions. The issue was oversubscribed five times and secured at competitive pricing for a 15-year tenure, reflecting investor confidence in the institution's credit profile.
The company's financial performance has shown consistent improvement in recent years. For the financial year ending in March 2025, IIFCL reported a net profit of INR 2,165 crore, marking a 39% increase compared to INR 1,552 crore in the previous year. Profit before tax rose to INR 2,776 crore, registering a 37% growth over the earlier figure of INR 2,029 crore.
Operationally, the lender recorded its highest-ever annual sanctions and disbursements at INR 51,124 crore and INR 28,501 crore, respectively, in the last financial year. The growth momentum has continued into the current year, with sanctions reaching INR 53,217 crore and disbursements at INR 25,470 crore as of the end of January.
IIFCL's balance sheet indicators remain stable, with a capital adequacy ratio of 21% and net non-performing assets at 0.3% as of the end of December. Established in 2006, the institution operates as a non-banking financial company specialising in infrastructure finance and adheres to regulatory norms set by the Reserve Bank of India.
The proposed MIGA-backed fundraising reflects an effort to access long-term global capital for infrastructure development while maintaining fiscal discipline and strengthening institutional funding capabilities.
Source - PTI
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