NaBFID To Sanction Loans Worth Rs 1 Lakh Crore In FY24, Says MD Rajkiran Rai

A bridge project under construction (Source: Ashoka Buildcon)

The National Bank for Financing Infrastructure and Development, or NaBFID, plans to disburse loans worth Rs 60,000 crore over FY24, according to the lender's Managing director, Rajkiran Rai.

The disbursement target comes as the infrastructure-focused financier is aiming to sanction loans totalling Rs 1 lakh crore during the ongoing financial year. NaBFID debuted on the Bombay Stock Exchange on Tuesday with a maiden bond that raised Rs 10,000 crore.

"This year, we are expecting that our sanctions will reach about Rs 1 lakh crore by March 2024," Rai said. NaBFID also expects that about one-third of its disbursals will flow towards greenfield investments, he said. Such investments are typically a form of foreign direct investment, wherein a company sets up operations in a country outside its home base.

Given its planned trajectory on disbursements, NaBFID also plans to raise about Rs 50,000–52,000 crore in funding, out of which Rs 30,000 crore will come from bond markets and the remaining from banks' credit lines, Rai said.

"From the government side, they've fixed most of the issues," Rai said, referring to land acquisition or environmental clearance issues that have plagued infrastructure projects in the past.

But bankers need to pay heed to the leverage element in such financing, he said. "The people who execute—the private parties—we should ensure that they've not done aggressive bidding," Rai said.

Such bidding has contributed to the failure of infrastructure projects in the past because, with excessive leverage, a few things falling apart took them down entirely, he said.

With banks largely pulling away from infrastructure financing over the last decade, the talent pool required to carry it out has also seen a shortage.

NaBFID has so far put together a 45-member team that hails from 12 banks and financial institutions overall, Rai said. "There is not much of a shortage, but there is a shortage of talent in the area," he said.

NaBFID's ability to pay market-related salaries is also a good enabler for attracting talent, Rai said.