India’s Exim Bank will tap the overseas market to raise $1 billion to fund overseas project finance with demand picking up this year. The recent upward revision will add to investors’ comfort according to Ms Harsha Bangari, MD of the export credit agency.
“On the whole, we would require $2 billion for FY22. We may tap the bond market in January again subject to favorable market conditions,” Bangari added. The export credit agency is looking at raising $1 billion.
Exim borrows $2-3 billion annually on average. The exact quantum would depend on demand. “We have already borrowed around $1 billion, mostly on the bilateral market,” Bangari says. Bilateral market borrowing gives the borrower an advantage of 15-20 basis points over bonds in terms of pricing. Exim has factored in a loan book growth of 8-10 percent for FY22, higher than its earlier forecast of 5-7 percent made in May 2021.
“A stable outlook gives us a lot of comforts. I hope investor appetite gets much better. We are getting pricing that is given to a higher-rated entity. Besides, Exim would also be borrowing Rs 15,000-20,000 crore from the domestic market.”
Exim Bank is also seeing some improvement in asset quality. “It is much better than the last two-three years. There are a few accounts that have slipped and are very much on the bank’s radar,” Bangari says. As part of a consortium, the bank has identified nine accounts worth Rs 700-800 crore to be transferred to the National Asset Reconstruction Company (NARCL).
Exim Bank’s slippage ratio improved to 1.52 percent in FY21 from 1.94 percent in FY20. Net NPA stood at 0.51 percent from 1.77 percent in FY20. Bangari says the provision coverage ratio was at over 95% last year & will be higher this fiscal.
It has received capital support of Rs 750 crore from the government of India so far, against the budgeted amount of Rs 15,00 crore.
Source: Economic Times