IFMR Capital’s flexible and rigorous processes mean that transactions can be structured to meet the requirements of each investor, including risk-return, rating and structure. Structures include single and multi-originator securitizations, local currency loans, bonds, commercial paper, MIPBs (Multi Issuer Partially-guaranteed Bond), guarantee backed loans, redeemable preference shares and Tier II capital issuances. Underlying assets are typically uncorrelated with mainstream economic cycles. Meanwhile, cost considerations of Originators are addressed via various forms of credit enhancements, providing price discovery and liquidity for Originators.
To develop and harness investor interest in this market, IFMR Capital has created a focused set of opportunities for domestic and international participants, to maximise access while addressing existing regulatory and statutory limitations on participation by various kinds of investors:
|Nature of debt||Tenor ranges||Rating of instruments|
|Senior, secured debt||Commercial paper–money market instrument, i.e.less than one year||Securitisation -minimum investment grade papers (i.e.BBB-and above)|
|Subordinated, unsecured, TierII capital||Securitisation – mirroring the underlying receivables (ten or between 2 and 10 years)||Bonds,commercial papers – linked to underlying entity rating (range between BB to AA+)|
|Off-balance sheet funding||Term loans, bonds and other structured papers – 2 to 8 years||Other structured products – investment grade and above (i.e.BBB – and above)|
It has worked closely with 80 plus institutions belonging to the Microfinance, Affordable Housing Finance, Small Business Loans,Vehicle Finance and Agriculture Finance sectors through financial structuring, own investments and dedicated investor relations. It has thus far enabled over INR 19,000 crore of financing for them. Current exposure is spread across 30 states and 480 districts. Over 75 leading investors have so far benefited from the specialised structures created by IFMR Capital, including international and domestic banks, asset management companies, non-banking finance institutions, private wealth businesses, insurance companies, impact funds and development finance institutions.
The continuing support of its investors has been instrumental in its emergence as a pioneer in this industry.
IFMR Capital has also developed a fund management platform that allows it to manage domestic funds, as well as advise international funds. It raised India’s first local impact investment fund – providing senior and subordinated debt to Indian microfinance institutions. IFMR Capital could raise participation from domestic insurance and bank investors for the first fund, and will seek to scale up this platform in the present financial year. Recently, the Union Cabinet permitted foreign investors to invest into India-domiciled funds and detailed regulations / tax guidelines are expected shortly.