Menu
Search

NCDs Turns Preferred Route For Ifc In Debt Financing For NBFCs

Monday, June 30, 2014
19
Separator
22
Separator
27
Separator
3
Separator
Print Print Email Email

KOLKATA: Non Convertible Debentures have recently become the preferred route of investment for multilateral agency International Finance Corporation in debt for NBFCs.

"Recently we have started debt financing through NCDs to NBFCs. The first one is AU financiers, a Rajasthan-based NBFC of  $25 million. We are looking at more opportunities through this route," IFC senior investment officer A K Agarwal said here today on the sidelines of a financial markets conclave by CII.

IFC was holding talks with Magma Fincorp and Cholamandalam for subscribing to NCDs of these NBFCs, he said.

"Microfinance institutions will also get benefit of this," Agarwal said.

Asked about the reason for NCDs as the new preferred route for debt financing, Agarwal said this instrument was an option due to restrictions on ECBs for NBFCs.

"As per ECB guidelines, NBFCs were not allowed to raise Dollars. IFC can only invest in Dollars as we do not have an India balance sheet. But under the NCD guidelines Dollars can be converted in spot market and can be invested in rupee lending as FIIs," Agarwal said.

He said IFC remained committed to MFIs and will continue to invest in the sector.

Agarwal declined to comment on whether the agency was planning any hike in its stake in the MFI Bandhan once it was converted to a bank.

Bandhan, a city based MFI had received in-principal approval for a banking licence and IFC had close to 11 per cent stake.

Total exposure of IFC in India was roughly $4.5 billion. Of that around 1/3 was equity and 2/3 debt. Financial sector exposure is estimated to be around 30-35 per cent.

"We have been investing more than a billion dollar year-on-year," Agarwal added.

READ MORE: India's 100 Year Old Companies That are Still Young and Strong and India's Fiscal Deficit: Controversies over Concern

 


Source: PTI
Write your comment now
Submit Reset
Looking For Loan? Let us Help you !!!
Product
Name
City
Phone
Email
Loan Amount
Annual Income
Preferred banks
Captcha
Type the characters you see in the picture
  Submit
SPOTLIGHT
Previous
Next