Financial Daily from THE HINDU group of publications
Wednesday, Apr 26, 2006
Financial Daily from THE HINDU group of publications Wednesday, Apr 26, 2006 |
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Money & Banking
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Outlook KfW to grow India portfolio to 3 b euros Mamuni Das
Expansion plans Another representative office in Mumbai this year. Options open on upgrading presence to subsidiary. To finance buys in Europe by Indian cos.
Hannover , April 25 German financial major KfW Bankengruppe, through its commercial arm KfW IPEX-Bank, plans to increase its commercial portfolio in India to 3 billion euros over the next three years from the present level of one billion euros. The 341-billion-euro institutional financing group has already invested 30 million euros in two infrastructure funds promoted by IDFC and IL&FS. The additional investment is expected to finance projects in the airlines, airport, telecom, shipping and transport sectors, Mr Peter Klaus, Member of the Board of Managing Directors of KfW Bankengrouppe said.
Funding for airport revamp
The institution is open to financing the modernisation of Delhi (where Fraport or Frankfurt Airport is a joint venture partner) and Mumbai airport. KfW has invested 25 million euros (about 20 per cent stake) in IDFC's India Investment Fund and another 5 million euros (about 10 per cent stake) in IL&FS's India Project Development that takes care of pre-feasibility stage financing. The investment in IL&FS fund is expected to be completed soon. The equity stakes in these funds may change as they are open at present, however, KfW IPEX would try to maintain an equity level of over five per cent, he added. "KfW India has developed into an important partner for us. Since 1998 the group has provided altogether nearly 4 billion euros in financing for India's state and private sectors. Roughly half of it, with an increasing share, has been provided to Indian partners through commercial loans at market conditions by KfW IPEX-Bank," Mr Klaus said.
Expansion in India
The bank also plans to expand its presence in the country by opening another representative office in Mumbai this year. It currently operates an office in New Delhi. The institution may not convert its Indian operations into a subsidiary immediately but would take a decision over the next few years. He also said that KfW had good experience in financing infrastructure projects in India and it had no NPAs at present. On upgraded ratings by Standard and Poor (S&P) for India, Mr Klaus said KfW's internal rating kept the country one notch higher than others. The overall volume of KfW IPEX-Bank is around 69 billion euros; the new commitments were slightly above 12 billion euros. Mr Klaus said that additional exposure in India would also take care of financing the acquisition deals of Indian companies in Europe. "A few enquiries have already been received by us from some Indian SMEs in this regard," he added.
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