Mumbai, Apr 21 (PTI) Total infrastructure credit by banks and NBFC infrastructure finance companies (NBFC-IFCs) registered a slower growth of 6 per cent at Rs 25.7 lakh crore in the first nine months of fiscal 2022, says a report. Over the years, the share of banks in total infrastructure credit has been reducing, while that of non-bank finance companies-infrastructure finance companies (NBFC-IFCs) has increased to 54 per cent as of December 31, 2021 from about 42 per cent five years ago, Icra Ratings said in a report on Thursday.
“While the tepidness (in infrastructure credit) in recent years was primarily due to the stagnation in banking sector credit to the infrastructure segment, the trend in nine months of FY2022 was characterised by the moderation in the portfolio growth of IFCs as well,” the agency said. Earlier, in FY2021, IFCs’ aggregate portfolio continued to grow at a strong pace led by disbursements related to the liquidity package for distribution companies (discos) with Power Finance Corporation (PFC) and REC (Rural Electrification Corporation) as lending partners. The aggregate NBFC-IFC credit book stood at Rs 13.8 lakh crore as on December 31, 2021, registering a sequential growth of 6 per cent (annualised) in the nine months of FY2022, compared to the much stronger growth of 16 per cent in FY2021 and 14 per cent in FY2020, the report said.
The public-IFC category continues to account for majority share (94 per cent) with an aggregate loan book of Rs 13 lakh crore as on December 31, 2021.
This is followed by private-IFCs (3.3 per cent) with an aggregate loan book of Rs 0.45 lakh crore and Infrastructure Debt Funds (2.3 per cent). The agency’s Vice President (financial sector ratings) Manushree Saggar said the growth prospects for NBFC-IFCs are strong as demand for infrastructure credit is expected to gather pace amid the government’s resolve to focus on the infrastructure sector to revive economic growth.
“Consequently, NBFC-IFCs loan books are expected to grow by 10-12 per cent in FY2023,” she said. The agency said the asset quality trajectory over the past few years indicates receding asset quality pressures for NBFC-IFCs.
Led by a few stressed assets resolutions/recoveries, sizeable write-offs, curtailed incremental slippages, and the optical impact of a growing asset base, the stage 3 assets has eased to 4.1 per cent (5.8 per cent – ex Indian Railway Finance Corp (IRFC)) as on December 31, 2021 from the peak level of 7.3 per cent as on March 31, 2018, the report said. PTI HV ABM ABM
