L&T Infra Debt to raise Rs 2,500 cr to refinance projects

Industry:    2017-02-28
With refinancing of infrastructure projects gathering steam, L&T Infra Debt Fund (L&T IDF), a refinancing unit, is raising about Rs 2,500 crore through debentures to provide liquidity for road and renewable energy projects.

As on September 30, 2016, its net worth was Rs 660 crore (excluding preference shares), debt was Rs 2,455 crore, and outstanding loan book was Rs 2,942 crore (for 25 projects).

The company’s overall capital adequacy ratio stood at 45.87 per cent as on September 30, 2016.

Reserve Bank of India’s norms for IDF provide flexibility to finance projects outside a tripartite arrangement. These can invest in public-private partnership (PPP) infrastructure projects without a tripartite agreement, and also projects that have not been set up through the PPP route (non-PPP projects). However, these take exposure only to projects with at least one year of satisfactory operations.

The company’s portfolio comprises projects with an average of four years of satisfactory operations, against the regulatory norm of one year.

It has an experienced team, which has demonstrated ability to refinance projects and raise funds at competitive rates through long-term bonds (with tenors of 5, 7, 8, 10, 15, and 20 years.)

L&T Infra Finance holds 48 per cent stake in L&T Infra Debt. The remaining is held by other L&T group companies, including 23 percent by L&T Finance Holdings.

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