India's state-owned EXIM Bank plans $10.5 billion debt fund raise in fiscal 2027

MUMBAI: The Export-Import Bank of India (EXIM Bank) plans to raise about 995 billion rupees ($10.5 billion) in fiscal 2027 through domestic and overseas borrowing, its managing director said, as the bank looks to strengthen its funding profile.

The spread on the bank’s 10-year bond issued in January has narrowed to 70 basis points from 86 bps over the past three months, strengthening its confidence to pursue foreign-currency borrowing in this environment, MD Harsha Bangari told Reuters on Monday.

The U.S.-Israel war on Iran and the subsequent closure of the key Strait of Hormuz has increased shipping costs, disrupted logistics and affected exporter sentiment.

However, the bank will remain cautious on the timing of any fresh borrowing, she said, without specifying when the fundraise would be carried out.

The wholly state-owned EXIM Bank, which provides export financing and backs loans granted by commercial lenders to buyers of Indian goods, expects to tap the domestic market for around 660 billion rupees through instruments such as bonds, certificates of deposit and loans, according to Bangari.

It will raise about $3.5 billion from overseas markets via bilateral and syndicated loans, she added.

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The planned borrowing is higher than the 860 billion rupees the bank raised in the previous financial year.

Impact of Middle East crisis

The bank, which also extends lines of credit to governments and institutions in developing countries, particularly in Africa, Asia and Latin America, expects loan growth to moderate to 10% in fiscal 2027, from 12% last year, Bangari said, due to the Middle East crisis.

“I have a really robust pipeline and I’m confident that it will be disbursed in the current year,” said Bangari.

However, the pace of contract imports for Indian firms could slow if the uncertainty persists for longer, she added.

The bank’s Middle East and North Africa exposure stands at around 57 billion rupees of the overall exposure of 3.5 trillion rupees, Bangari said, adding that the bank has been conducting a detailed assessment of the potential impact of the war on its loan book.