IIFCL raises ₹1,848 crore via NCDs; plans $2.3 bn overseas borrowing for infra financing

State-owned India Infrastructure Finance Company Ltd. (IIFCL), a wholly owned Government of India enterprise under the Department of Financial Services (Ministry of Finance), on Monday said it has raised ₹1,848 crore through a domestic bond issuance.

The bond sale marks IIFCL's first domestic borrowing from the debt market in FY27. The company plans to raise ₹34,200 crore during the financial year under its board-approved resource mobilisation programme.

“The present issue marks IIFCL's first domestic market borrowing during FY 2026-27, signalling the commencement of the Company's resource mobilisation programme for the current financial year and reinforces the Company's ability to mobilize resources efficiently from the capital markets,” the PSU entity said in a release.

The company said its non-convertible debenture (NCD) issue, with a maturity of four years, 11 months and two days, received bids worth ₹3,048 crore against a base issue size of ₹500 crore, prompting it to retain ₹1,848 crore at a coupon rate of 7.25% per annum.

Bond garners nearly six times bids

The issue was oversubscribed by nearly six times, reflecting strong demand from institutional investors and confidence in the government's dedicated infrastructure financing institution.

"The issue witnessed an overwhelming response from investors, attracting bids aggregating to ₹3,048 crore, representing nearly six times the base issue size of ₹500 crore," IIFCL said in a statement.

"The overwhelming response to our first bond issuance of the financial year reflects the confidence of the investor community in IIFCL's financial strength, prudent resource management and developmental mandate," Managing Director Rohit Rishi said.

"With an approved resource mobilisation programme of ₹34,200 crore for FY2026-27, we are committed to maintaining a diversified funding mix through domestic and international markets to ensure the availability of long-term, competitively priced resources for financing India's infrastructure growth," he added.

The funding plan includes raising capital through domestic bonds, other capital market instruments and external commercial borrowings (ECBs) to meet the growing financing requirements of infrastructure projects.

Plans $1.3 billion overseas borrowing in next 2-3 months

As part of its overseas funding strategy, IIFCL plans to raise around $1.3 billion over the next two to three months through ECBs and other debt instruments. It also intends to mobilise an additional $1 billion through overseas borrowings, subject to approvals from the Government of India and other regulatory authorities.

The company said recent measures announced by the Reserve Bank of India, including the concessional USD-INR swap facility for eligible ECBs, are expected to reduce hedging costs and make overseas borrowings more attractive.

According to IIFCL, the proceeds from the latest bond issue, along with funds proposed to be raised during the year, will be deployed to finance projects across transportation, renewable energy, power, urban infrastructure, logistics, digital infrastructure, water and sanitation, social infrastructure, nuclear energy, and other priority sectors.

The fund-raising programme aligns with the government's broader infrastructure push and its Viksit Bharat 2047 vision, under which public financial institutions are expected to play a larger role in mobilising long-term capital for infrastructure development.