ADVERTISEMENT

Exim Bank Plans To Raise $2.5 Billion In Overseas Funding Next Fiscal

Exim Bank today listed bonds worth $500 million on the global securities market platform of the India INX Exchange.

A reach stacker moves a shipping container at the Jawaharlal Nehru Port, operated by Jawaharlal Nehru Port Trust, in Navi Mumbai, Maharashtra, India. (Photographer: Dhiraj Singh/Bloomberg)
A reach stacker moves a shipping container at the Jawaharlal Nehru Port, operated by Jawaharlal Nehru Port Trust, in Navi Mumbai, Maharashtra, India. (Photographer: Dhiraj Singh/Bloomberg)

The Export Import Bank of India plans to raise $2-2.5 billion in the financial year starting April as part of its strategy to tap the international debt market by issuing long tenor paper.

The bank today listed its medium-term dollar-denominated bonds worth $500 million on the global securities market platform of the India INX Exchange—the nation’s first international stock exchange located at International Financial Services Centre, GIFT City, Gujarat.

The bonds, maturing in 2024, are part of the bank’s $10-billion global medium-term note programme. Of this, the bank has so far drawn $6.5 billion, Managing Director David Rasquinha told reporters after the listing ceremony in Mumbai.

“For our bond of $500 million, the book value went over $2.7 billion at its peak. After some tightening in the price, the book value came down to around $1.6 billion, which means that we have a large amount of unsatisfied demand for these bonds even after the issue was completed,” Rasquinha said.

The issue was subscribed around 3.4 times. HSBC Ltd. and Standard Chartered Bank Ltd. were the book runners to the bond issue. Jai Sagar Associates and Khaitan and Co. acted as legal advisers.

Around 170 international investors purchased the bonds comprising private and sovereign wealth funds and pension funds based out of Hong Kong, the U.S. and Singapore, bankers present at the listing ceremony told BloombergQuint.

Rasquinha said the funds raised through the GMTN programme will mainly be used for on-lending. Around 75 percent of the bank’s loan portfolio is dollar-denominated.

Set up in 1981, the government-owned bank provides financial assistance and investment credit to exporters and importers. It acts as the government’s official export credit agency. The bank also lends to corporates building export-oriented facilities or projects in developing countries and extends finance to foreign governments on behalf of the government of India.

So far, the bank has signed 245 lines of credit with 63 countries consisting of around $24.24 billion of lending commitments.

For the first nine months of the ongoing financial year, the bank raised Rs 73,660 crore through notes, bonds and debentures, according to its investor presentation. That compares with Rs 86,581.7 crore at the end of 2017-18.

In January, the government said it would infuse Rs 6,000 crore into the bank over two years and double its authorised capital to Rs 20,000 crore—a move aimed at helping it provide for bad loans, correct its leverage ratio and fulfill its capital adequacy requirement.

Rasquinha said the bank aims to grow at 10-15 percent this year and close the loan book at nearly Rs 1.7 lakh crore.

Opinion
Why The Government Had To Step In To Support India’s Exim Bank