India's National Bank for Financing Infrastructure & Development (NaBFID) is in talks with banks to raise funds through a five-year dollar loan, seeking to capitalize on the central bank's recent measures to encourage foreign currency inflows.
The state-owned infrastructure lender is looking at a total pricing of 6.5% to 7%, including hedging costs, Managing Director Rajkiran Rai G. said in an interview, adding that the size of the loan would depend on the pricing. NaBFID is seeking to raise $8 billion-$9 billion from the domestic and offshore markets in the financial year ending March 2027, he said.\
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The Reserve Bank of India said this week it will offer state-run firms a concessional foreign exchange swap facility at a fixed rate of 1.5% a year. Analysts said this would allow firms to hedge overseas borrowings at roughly half the prevailing market cost. Many borrowers have stayed away from offshore markets this year because of elevated hedging costs and the rupee's weakness.
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“Replanning is happening, and we are studying it very closely,” said Rai. “We will definitely make use of this special hedge window.”
State-run firms are likely to prefer offshore borrowing as the RBI's discounted swap facility has made overseas fundraising 50 to 75 basis points cheaper than raising money in the domestic bond market, he said.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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