25 Noteworthy Financings: Innovative debt and equity structures

In the past two and a half decades, the infrastructure financing landscape has undergone a significant transformation. The market has matured with the introduction of some innovative initiatives and structures. Indian Infrastructure has identified 25 noteworthy deals that brought about major changes in the financing of infrastructure projects…

Bangalore Municipal Bond Issue

In 1997, the Bangalore Municipal Corporation beca­me the first urban local body to raise funds by issuing municipal bonds. The corporation garnered a sum of Rs 1.25 billion through this route.


Financing of the Mumbai-Pune Expressway

In 1998, the Maharashtra State Road Development Corporation raised over Rs 9 billion to finance the Mumbai-Pune expressway and flyovers in Mumbai. This paved the way for government-backed and infrastructure-backed debt structures for financing.


Delhi-Noida Direct Flyway Financing

For the first time in the country, the financing of an infrastructure project involved a combination of debt and private equity (PE) investment. The $87.12 million project was financed on a debt-equity ratio of 2.33:1. Noida Toll Bridge Company Limited became the first company to launch an initial public offering (IPO) for a greenfield infrastructure project.

PE Investment in Bharti Airtel

Investments of around $300 million by Warburg Pincus in Bharti Televentures Limited (between 1999 and 2001) paved the way for PE investments in the sector and, to some extent, the telecom revolution in the country.

Tiruppur Water Project’s Financial Closure

The Tiruppur water supply project was the country’s first build-own-operate-transfer project in the water sector to be funded on a project finance, non-reco­ur­se basis. It achieved financial closure in 2002.



IDFC’s India Development Fund

The Infrastructure Development Finance Com­pa­ny’s (IDFC) private-public fund was set up in 2004 with support from the Ministry of Finance. With a corpus of Rs 8.4 billion, it was the largest domestic infrastructure PE fund in India.

Incorporation of IIFCL

Incorporated in January 2006, India Infrastructure Finance Company Limited (IIFCL) commenced operations in April 2006. Set up as a financial SPV, IIFCL provides financial support to the infrastructure sector through direct lending, takeout financing, credit en­ha­n­­cement and refinancing.



World Bank Assistance for PMGSY

The World Bank’s provision of a $1.8 billion loan for the Pradhan Mantri Gram Sadak Yojana (PMGSY) in 2010 was the biggest multilateral aid to be extended to India since 2005.

Coal India Limited’s IPO

Coal India Limited launched a mega IPO to raise over Rs 150 billion in 2010. This is India’s largest IPO in the infrastructure sector till date. The company made a spectacular debut on the bourses by listing at a 20 per cent premium.

Hyderabad Metro Financial Closure

Achieved in six months, the financial closure of the Hyderabad metro in 2011 is among the largest fund tie-ups for projects. The project was funded with a debt-equity ratio of 70:20 and a viability gap funding of 10 per cent. A consortium of 10 banks sanctioned the debt requirement and the equity component was infused by L&T.

Tata Power’s Debenture Issue

Tata Power Limited launched a perpetual debenture offering of Rs 15 billion in 2011, the first of its kind in India, to secure long-term funding.

LIC Investment in Indian Railways

The agreement for an investment of Rs 1.5 trillion by the Life Insurance Corporation of India (LIC) in 2017 was hailed as the first step by Indian Railways towards becoming profitable and commercially viable. In Mar­ch 2018, the Indian Railway Finance Corporation rais­ed Rs 50 billion from LIC through a bond issuance.

InvIT IPOs by IRB and Sterlite

IRB Infrastructure Developers Limited and Sterlite Power Grid Ventures Limited became the first in their respective sectors to launch an IPO of their infrastructure investment trusts (InvITs) in 2017. The companies collectively raised over Rs 70 billion.

NIIF’s First Investment

The National Investment and Infrastructure Fund (NIIF) signed an investment agreement worth $1 billion with the Abu Dhabi Investment Authority (ADIA) in October 2017. With this, ADIA became the first institutional investor in NIIF’s Master Fund.

Macquarie’s TOT Deal

The Macquarie Group won India’s first toll-operate-transfer (TOT) project at a bid of Rs 96.81 billion in March 2018. This was one of India’s largest foreign direct investments in public infrastructure.



NHAI Loan from SBI

The National Highways Authority of India (NHAI) signed an MoU with the State Bank of India (SBI) in August 2018 for a long-term loan of Rs 250 billion. This is the largest-ever funding arranged by the au­tho­rity in a single tranche. It is also the largest long-term unsecured loan sanctioned by SBI.

NIIF-DP World Joint Venture

In 2018, NIIF collaborated with DP World to establish Hindustan Infralog Private Limited, a platform for in­vesting in ports, terminals, transportation and logistics. The investment platform aimed to acquire assets and develop projects with a $3 billion investment.

Brookfield’s Acquisition of East-West Pipeline

In March 2019, Brookfield Corporation acquired East-West Pipeline Limited from Reliance Industries via the India Infrastructure Trust for Rs 130 billion. This marked the first-ever monetisation of a private gas pipeline in India.

Multiple Rounds of Investments in Jio Platforms

During 2021, Jio Platforms attracted over Rs 1.5 trillion through a series of fundings from Facebook, Sil­ver Lake, Google, General Atlantic, KKR, TPG and Mu­­b­a­d­ala, among others. These investments were significant as they took place at a time wh­en the world was grappling with Covid-19.

Adani Green Energy’s Acquisition of SB Energy

In October 2021, Adani Green Energy Limited ac­q­uir­ed SB Energy India for Rs 260 billion ($3.5 billion) in an all-cash deal. This is the largest acquisiti­on in India’s renewable energy sector till date.

NHAI’s InvIT Raises Rs 102 billion

In November 2021, NHAI raised around Rs 80 billion via its InvIT from foreign and domestic institutional investors, followed by another round of fundraising in 2022. This made NHAI the first public authority to tap the market using the InvIT structure.


Tata Group Takes Over Air India

In January 2022, the Tata Group took over the operations and management control of the debt-laden Air India from the government with a winning bid of Rs 180 billion after nearly seven decades of losing control of the Maharaja airline after it was nationalised.

ArcelorMittal Acquires Essar

In one of the largest post-pandemic deals in 2022, ArcelorMittal Nippon Steel India acquired three por­ts, two power plants and a power transmission line from the Essar Group for Rs 190 billion.

Government Becomes the Largest Shareholder in Vodafone Idea

Given the telco’s poor financial health and inability to pay its spectrum dues, Vodafone Idea (Vi) was allow­ed to convert its outstanding dues to equity to the government. The move made the government the single largest shareholder (33.44 per cent) in Vi.

Maiden Sovereign Green Bond Issue

In a first, the Reserve Bank of India issued two tra­n­ches of sovereign green bonds worth Rs 80 billion each between January and March 2023. The proceeds will be deployed in public sector projects seeking to reduce the carbon intensity of the economy.