India Exim Bank looks for $3.5 bn foreign currency borrowings in Fy25

Export-Import Bank of India (India Exim Bank) plans to raise about $3.50 billion in the financial year 2025 for lending to Indian corporates, overseas governments, and institutions, as well as to manage repayments for maturing debt.

Harsha Bangari, managing director, India Exim Bank, said the actual overseas borrowings would depend on the credit demand and market conditions. While the wholly owned government institution has the option to issue bonds and contract loans, the share of each route would vary based on a cost-benefit assessment. The liabilities of about $1.2 billion would be maturing in the financial year 2025, Bangari said.

The bank raised foreign currency resources of $3.26 billion equivalent during the financial year 2024. In the financial year 2023, it had raised foreign currency resources equivalent to $3.47 billion.

During the financial year 2024, the institution issued two sustainable bonds under the Environmental, Social, and Governance (ESG) Framework through private placements aggregating $200 million and its first Green Floating Rate Bond of $150 million under the ESG Framework, she said.

The loan portfolio grew by 17.2 per cent year-on-year to Rs 1.57 trillion at the end of March 2024, driven by strong growth in sectors such as clean and renewable energy, automotive, engineering goods, pharmaceuticals, and telecommunications. The corporate loan book expanded by 49 per cent year-on-year, aligned with the growing activity of Indian companies in the international market. Export finance had a 70 per cent share in the loan portfolio, term loans to exporters constituted a 16 per cent share, followed by an eight per cent share of import finance, according to the results presentation.

The development financial institution has guided for about 12 per cent growth in the current financial year (2025). The geopolitical developments impact the external trade, economic trends, and loan offtake, she said.

Its capital adequacy ratio stood at 21.18 per cent at the end of March 2024, as against 25.43 per cent a year ago. Indian Exim Bank has adequate capital and is not looking at raising fresh capital from the government. The Basel III norms have come into effect from the current financial year (2025). It will help to deploy capital efficiently, Bangari said.

Basel III norms have removed the cap on leverage on net owned funds (NOF). The cap was 10 times NOF. The actual leverage has been between 6-7 times and would remain in this range.