India infrastructure Finance Company Limited (IIFCL), a company under the Government of India to render long-term financial assistance to infrastructure projects, aims to sanction proposals worth Rs 7,000 crore in this financial year.
It would be done through the takeout finance scheme, once the Cabinet approves the revised form of the scheme.
The company is expecting removal of nodes which created bottlenecks for the scheme in the last one year. Launched in October, the scheme has so far sanctioned Rs 1,500 crore, while the disbursement was only of Rs 90 crore, due to some hurdles, said S K Goel, chairman and managing director.
Speaking to reporters after announcing the Confederation of Indian Industry’s plan to conduct a South India Infrastructure Investment Summit, in Chennai on November 11, he said, “We have kept a target of Rs 7,000 crore through the Takeout Scheme in this financial year.”
“Of this, we already have ready proposals for Rs 3,600 crore from various parties. We would decide on it once we get the approval from the Cabinet.” he added. The proposals are mostly for construction of roads, airports and even for a sea port.
The company also targets its asset size through direct lending to be at Rs 25,000 crore by this financial year end. It currently has an asset size of Rs 22,000 crore.
With the nodes removed, the company could takeout term-loan debt from the identified lenders and borrowers from the time of Commercial Operation Date (COD), while the earlier node allowed it to take out the debt only after one year from the time of COD.
Earlier, the proposal for takeout was restricted to be only from the lender, which some banks used as method to pass on the assets which were less productive. With the revision, both the lender and the borrower could transfer the debt to IIFCL. The interest rate would have a concession of 75 to 200 basis points.
The firm is also looking for the Cabinet’s approval to increase its authorised capital to Rs 8,000 crore, which could support it to a maximum book size of Rs 75,000 crore. It has requested the government approval to raise Rs 10,000 crore through issuance of tax free bonds and is expecting approval for at least Rs 5,000 crore, he added.
