NaBFID Finalizes SRO Registration for Infrastructure Financiers
The National Bank for Financing Infrastructure and Development (NaBFID) is in the final stages of registering a self-regulatory organisation (SRO) for infrastructure financiers. According to Managing Director Raj Kiran Rai, the body will represent sector-specific regulatory issues before the government and the Reserve Bank of India (RBI).
The SRO is designed to address common sectoral challenges, including industry practices and project approvals. While the platform initially comprises core infrastructure financiers such as Non-Banking Financial Companies (NBFCs), Rai indicated that larger banks could be included subsequently. The move resolves earlier regulatory hurdles regarding the inclusion of different financial institution categories under a single SRO.
"We will be at the forefront of taking up issues related to infrastructure financing," Rai stated. "If there are guidelines proposed by regulators that create concerns for the financing sector, there should be a platform to collectively take up those issues with the regulators."
Recent Bond Issuance and Future Borrowing Plans
Rai’s comments coincided with NaBFID’s completion of its debut $750 million, 10-year US dollar bond issuance on September 30 under its $4 billion Global Medium Term Note programme. The bond was priced at a spread of 105 basis points over US Treasuries, with a coupon of 6.122 percent, improving upon the initial guidance of 130 basis points. The issue attracted bids exceeding $2 billion.
This issuance follows a $125 million dollar loan in March and $850 million in external commercial borrowings (ECBs) in August. Looking ahead, NaBFID is planning another $750 million to $1 billion borrowing. Post-December, the focus will shift towards ECB loans from multilateral institutions, with discussions currently underway with two to three such entities.
The recent dollar bond was issued through the discounted swap window, a facility that has allowed banks and state-run entities to access subsidised hedging for overseas borrowing since June.
Portfolio Strategy and Growth Targets
NaBFID is targeting a loan book of approximately Rs 2 trillion by FY27 and Rs 5 trillion by 2030. To achieve this, the bank aims to maintain a balanced project-finance portfolio. Currently, around 43 percent of its sanction book comprises greenfield projects, but the pipeline is tilted towards these assets. The long-term objective is a 50:50 mix between greenfield and operational projects.
"Greenfield projects give us higher returns, higher risk, higher returns, while operational assets have lower risk, lower returns," Rai explained. This balance is crucial for raising liabilities at competitive rates as the bank scales its balance sheet.
Sectoral Expansion and New Opportunities
While roads and energy remain dominant sectors due to government-led investment, NaBFID is identifying opportunities in healthcare, education, data centres, and urban infrastructure. The lender is present across 27 sectors. Data centres are emerging as a significant opportunity, with location decisions potentially driven by state incentives, land, and power availability, alongside existing advantages in Mumbai and Chennai due to undersea cable infrastructure.
Additionally, municipal finance is expected to grow as urban local bodies access the bond market. Under a recent MoU with NABARD, NaBFID will initially focus on warehousing, food storage, and rural road connectivity, with drinking water infrastructure to follow later.
The bank’s proposed alternative investment infrastructure fund is also progressing. NAPINCO has been registered in GIFT City, and the lender is onboarding a CEO, CIO, and CCO. The key team is expected to be in place by December-January, with the fund becoming operational by March-end and fundraising beginning in the next financial year. NaBFID’s total sanctions are nearing Rs 4 trillion, with a project pipeline extending two to three years.