Managing Director and Head of Investments, EverSource Capital
1. What has been the experience so far with attempts to develop alternative sources of financing (beyond commercial banks) - bonds, InvITs, IDFs, etc.?
Answer: Role of alternative source or financing beyond Private Equity / Infrastructure Equity Funds, Banks and NBFCs in Indian renewable energy space has been rather limited. Good part is that alternative sources such as Bonds, InvITs and IDFs have been tested but the size of the market addressed by them has been miniscule in comparison to total funding absorbed by the infrastructure sector. Primary reasons for slow uptake being absence of liquid corporate bond market, fragmented market with large number of small players who are unable to get investment grade rating for bonds or attract InvITs. Absence of credit enhancement mechanisms to improve rating of bonds is another major factor for slow take off. IDF’s are limited in numbers and are low on their capitalisation, thereby having very limited ability to make a difference, till they get capitalised to play a role.
2. Which sources hold the most promise given the Indian scenario?
Answer: Green Bonds hold most promise given the keenness of Govt., Regulators and RBI to deepen Indian bond market, which will help tapping of Pension Funds corpse for long term money and potentially take-out bank funding.
3. What are your views on “The Economic Times Infra Focus Summit” and how important do you to feel is the need of organizing such summits?
Answer: Infra Focus Summit from a credible source such as ET has its own merit. Not only it helps in focussing on relevant issues and offering solutions emerging in the summit, but it also offers an opportunity to get clarity on future needs and aspirations to provide tangible inputs for policy planners and participants.