IIFCL launches new credit rating system for infra projects

IRB Infrastructure Developers  | In 2020 so far, the share price has moved up 76 percent to Rs 131.20. It's trailing twelve months (TTM) P/E was 6.40 multiple while 5-year average P/E was 8.30 multiple.

State-owned term lender, India Infrastructure Finance Company Ltd (IIFCL) launched a new credit rating system with in-built credit enhancement structures for infra projects.

The new rating system will address the concerns like the expected loss (EL) of a project entity.

It will also enable better risk based pricing and long term funding avenues, IIFCL Deputy Managing Director Sanjeev Kaushik said.

The key benefits would be enabling long term investors such as infrastructure finance companies, pension funds, insurance companies to effectively price their investment decisions in infrastructure assets and allow issuers access long-term funding from capital markets at competitive rates, he said.

Finance Minister Arun Jaitley in his Budget speech 2016- 17 had announced that a new credit rating system for infrastructure projects which gives emphasis to various in- built credit enhancement structures will be developed, instead of relying upon a standard perception of risk which often result in mis-priced loans.

The new rating system has been developed in association with Icra.