Mumbai, Feb 8 (PTI) Infrastructure lender India Infrastructure Finance Company Ltd (IIFCL) is planning to invest Rs 2,000 crore in infrastructure bonds and Rs 1,500 crore in infrastructure investment trust (InvIT) by end-March 2022, a top company official said.
“We hope to do (invest) about Rs 2,000 crore in bonds and another Rs 1,500 crore in loans for InvITs. So, we wish to complete around Rs 3,500 crore (of investment) in this fiscal,” the lender’s Managing Director P R Jaishankar told PTI. Last week, the government-owned company invested Rs 325 crore in non-convertible debentures (NCD) issued by Virescent Renewable Energy Trust (VRET), an infrastructure investment trust. The 10-year bond offered IIFCL a coupon of 7.9 per cent with an annualised yield of 8.2 per cent. Jaishankar said this maiden investment in the bond issued by an InvIT will help in developing a long-term bond market in the country and also provide long-term financial assistance for InvITs. It will also result in improvement in the asset quality of the lender. In FY21, it recorded its highest-ever sanctions and disbursements at Rs 20,892 crore and Rs 9,460 crore, respectively, on a standalone basis. During the first nine months of the current financial year, its standalone sanctions touched about Rs 18,000 crore and disbursements were to the order of Rs 6,000 crore. Jaishankar said the sanction and disbursement amounts are expected to be higher this fiscal as compared to FY21. Speaking about non-performing assets (NPAs), he said the lender wants to improve its asset quality and make the balance sheet much more robust and stronger in terms of fundamentals. He expects the net NPA ratio to be sub-5 per cent and gross NPA ratio to be below 10 per cent by March 2022.
“Our net NPA ratio was hovering around 9-11 per cent in the last three-four years. So we had to kind of break that mark and come below 6 per cent. Last year in 2020-21, our net NPA was 5.39 per cent as compared to 9.75 per cent in the previous year. This year, we hope it will come below 5 per cent,” he said. As of December 2021, net NPA ratio stood at 4.36 per cent. He said the reduction in NPAs will be on account of the improvement in the overall performance of the company and better recoveries.
“We have been coordinating with various agencies for recoveries. We have a lot of termination payments that need to be recovered from NHAI and other concessioning authorities and there also we are very aggressive. So, our recoveries have improved,” Jaishankar said. In FY 2021, its cash recoveries from bad loans increased to over Rs 625 crore, a 92 per cent growth as compared to the previous year.
“This year, we hope to recover about Rs 800-900 crore in NPAs,” he said. The company’s cost of funds currently stands at 6 per cent compared to 7.3-7.4 per cent a few years back. Jaishankar further said as the company plans to invest in infrastructure bonds, InvITs and also has a committed funding pipeline, it will look at raising funds in the fourth quarter of FY22 and in the next fiscal.
“For next year we have plans to embark on a regular tapping of the market. We are cautiously watching yield curves and accordingly as things get conducive to our resource strategy, we will embark on our resource raising,” he said. He said though the plan for the next fiscal has not been finalised yet, the fund raising is likely to be in the Rs 6,000-8,000 crore range. The company posted a standalone profit after tax (PAT) of Rs 286 crore and consolidated PAT of Rs 325 crore in FY21. In the nine month ended December 2021, its standalone PAT increased to Rs 528 crore, up 45 per cent y-o-y. PTI HV ABM ABM
