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IIFL Finance to raise up to $750 million via ECBs, dollar bonds
The gold-loan focussed non-bank lender is in talks with existing investors as well as banks from Singapore and Taiwan, Nirmal Jain, managing director, told ET.
“We are planning to raise $500-750 million by external commercial borrowing/dollar bonds in March to diversify our funding sources, reduce reliance on banks, and support business growth,” said Jain. He said the exercise is likely to be completed by the third week of March.
India’s merchant bankers have urged SEBI to allow borrowing against bonds to boost underwriting capacity and better manage risks when debt sales see weak demand. They also sought access to wider funding sources and an anonymous bond-trading platform, arguing these changes would deepen liquidity and strengthen India’s corporate bond market.
“The fundraising will be done through a combination of dollar-denominated loans and foreign currency social bonds,” said Jain. “Global banks which are our existing lenders as well as investors from countries like Singapore and Taiwan are showing interest.”
Deutsche Bank, Mizuho Bank, Export Development Canada, British International Investment (BII), and the US government’s development finance institution DFC are among global entities who took part in IIFL Finance’s global debt issues previously.
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Incidentally, the Reserve Bank of India earlier this month raised limits under external borrowing, relaxed maturity norms, and removed cost caps. Eligible entities can now raise ECBs up to $1 billion in outstanding borrowings or 300% of net worth, based on the latest audited standalone balance sheets. The earlier borrowing cap was $750 million.
Indian companies raised a record $61 billion through ECBs in FY25, up from $48 billion in FY24. Besides dollar-denominated fundraising, IIFL Finance is also looking to grow the share of bond issuance in its liability profile. The lender launched a ₹2,000 crore retail bond issue on February 17 and is in the process of raising another ₹1,000 crore from institutional investors through private placement.