NEW DELHI: India’s largest container port, is all set to pilot a new infrastructure financing strategy of leveraging dollar denominated income to raise funds for expansion.
Yes Bank is advising the port in this exercise. Dollar borrowings had landed many Indian companies in trouble after rupee depreciated sharply.
Companies that have dollar earnings can raise cheap foreign funds that they can service from earnings without worrying about exchange rate fluctuations.
The natural hedge will keep cost of funds low. “Once we have gone through this cycle we will have a better idea of how to go about it in a bigger way,” a senior government official told ET.
The natural hedge will keep cost of funds low. “Once we have gone through this cycle we will have a better idea of how to go about it in a bigger way,” a senior government official told ET.
With infrastructure financing becoming a big issue for the government, the shipping ministry is drawing up a plan to raise about $2 billion (about Rs 12,500 crore) for rail and road connectivity projects through its dollar denominated income.
The income of major ports in dollar denomination is around $400 million and the shipping ministry intends to raise funds four to five times the available money.
