New Delhi: State-run India Infrastructure Finance Company (IIFCL) on Sunday said it aims to take over about Rs2,000 crore worth infrastructure loans made by banks by March-end under its takeout financing scheme.
“So far we have done takeout financing for seven projects worth Rs1,517 crore. We hope to take it to Rs2,000 crore by end-March,” IIFCL chief executive Pradeep Kumar told PTI.
Takeout financing is a procedure under which loans made by banks to infrastructure firms are sold to other institutions so that banks recover their much-needed funds ahead of the payment schedule under the loan agreement.
This is done to address the asset-liability mismatch, because loans are made to infrastructure projects on a long- term basis, whereas deposits of banks are generally of a short or medium term.
The state-owned infrastructure financing institution had launched the takeout financing scheme in October 2010.
“We have set a target of Rs25,000 crore takeout financing in the next three years,” IIFCL chairman and MD S. K. Goel said.
Last year, IIFCL had signed agreements with a host of lenders, including PNB, Union Bank of India and Indian Bank, for takeout financing.
As on 30 September 2010, the company has disbursed loans of Rs11,133 crore.
IIFCL, with a networth of Rs2,000 crore, has come out with a tax-free infrastructure bond issue aiming to raise Rs1,200 crore. The issue opened on 4 February and would close on 4 March.
The company will issue 10-year bonds with 8.15% interest compounded annually and 15-year bond with 8.30%.