India Ratings and Research estimates potential to refinance more than Rs. 56,000 crore debt of the Rs. 1,73,000 crore total debt across various infra sub-sectors.
In a report on Infrastructure Project and Finance, the Fitch Group company mentions that of this, solar sector is expected to be in the forefront in terms of a number of deals, with refinance of about 33 per cent followed by highways at 27 per cent.
It also mentions the possibility of shift in the type of instruments issued for the purpose of raising capital in the sector. These could be largely capital market instruments– such as bonds from the conventional term loans.
The debt service coverage ratio of projects would improve if the refinance of debt at 100-150 basis points.
With four Investment Trusts, which are likely to hit primary markets in FY 2018, the rating firm estimates that Rs. 6,000 crore could be refinanced.
The refinance move is particularly seen to benefit the toll roads and solar projects as most of them are in a ramp up mode. Read more