Finance

EXIM Bank plans to raise about $1 billion through bonds in January

Export and Import Bank of India (EXIM Bank) is looking to raise about $1 billion from the international market through a 10-year bond offering in January 2022 for predominantly its lending operations.

In 2021-22 (FY22), EXIM does not have huge debt servicing obligations (redemptions) and would raise around $2 billion for the current year, said its Managing Director Harsha Bangari.

The development finance institution, wholly owned by the government of India, has raised about $500 million through a bi-lateral route in the first half ended September. While it is cheaper to raise money from bi-lateral deals, there is only an appetite for medium-term money. For long-term funds, the bonds markets have many takers, she said. The export financing agency had raised $1 billion in 10-year bonds in January.

The recent upgrade in outlook by rating agency Moody’s on India’s sovereign rating from “negative” to “stable” will have a beneficial effect on fundraising but it would be difficult to quantify the gain in costs it would provide.

Referring to growth in credit, Bangari said: “For the full year (FY22), we have a target of 8 to 10 per cent (loan) growth.” The loan book expanded by 5 per cent year-on-year till September 2021. Its loan portfolio had grown by 4.43 per cent in FY21 to Rs 1.03 trillion, according to the FY21 annual report.

As for asset quality, she expects the slippage ratio to be very much in control and a substantial improvement in the gross NPA ratio. The gross non-performing assets (GNPAs) were down to 6.69 per cent in March from 8.75 per cent in March 2020. The net NPAs also dipped from 1.77 per cent in March 2020 to 0.51 per cent in March 2021.

As part of the consortium, the bank has identified nine accounts worth Rs 700-800 crore to be transferred to the National Asset Reconstruction Company.

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