India Infrastructure Finance Company Ltd (IIFCL) aims to generate Rs 2,000 crore within the next six months through its inaugural issuance of green bonds, intended for financing sustainable projects. The fundraising may involve a combination of domestic and foreign offerings, contingent upon the prevailing cost of funds, according to P R Jaishankar, the Managing Director of IIFCL. The government-backed infrastructure financing entity is also considering the possibility of issuing yen-denominated green bonds, with a potential timeframe in either the current quarter or the first quarter of the upcoming fiscal year.

"Sustainable green bonds are one of our major lookouts and the yen is one major currency that we are considering, and we are also looking at other currencies, but it will all depend on how cost-effective it is, including the hedging cost and the overall cost of borrowings. If the domestic environment gives us a better option then we will go with domestic", he added.

"If the yen offers superior returns, we will opt for yen", stated Jaishankar. This strategy aligns with the company's objective to broaden its borrowing portfolio and increase the proportion of green projects within the overall portfolio. Recently, the State Bank of India (SBI) successfully raised USD 250 million (approximately Rs 2,000 crore) through a private placement of green bonds set to mature in 2028. Regarding performance, Jaishankar emphasized that the company has demonstrated consistency in both top-line and bottom-line metrics.

Anticipating a profit exceeding Rs 1,500 crore for the fiscal year 2024, the Managing Director expects robust financial performance. In the fiscal year 2023, IIFCL achieved a remarkable two-fold surge in standalone net profit, reaching Rs 1,076 crore. This growth was attributed to an upswing in lending activities and a reduction in non-performing loans. The infrastructure financing entity also achieved record highs in both sanctions, totaling Rs 29,171 crore, and disbursements, amounting to Rs 13,826 crore.

Since its inception, the company has given Rs 2.5 lakh crore loans to 750 infra projects. As of December 2023, the company has earned a profit of Rs 1,189 crore with loan sanctions of Rs 30,315 crore, exceeding the figures of last fiscal in just three quarters. Given the demand so far, he said, the loan sanction amount would cross Rs 40,000 crore by March 2024.

He underscored the pivotal role that IIFCL is poised to undertake in financing the upcoming stage of infrastructure growth and highlighted the essential reforms required to elevate the infrastructure sector. The gross non-performing assets (NPAs) and net NPA ratios have demonstrated a consistent decline, registering at 3.77 percent and 0.85 percent, respectively, as of September 30, 2023.