Industry players complain that most sources of funding like private equity, capital market, bond issue, bank credit for infrastructure companies have dried up because of high risk perception in the sector.
According to Suneet Maheshwari, MD & CEO, L&T Infrastructure Finance, private equity has been scarce and the capital market does not favour infrastructure companies as they are not a good story, so all sources of equity have withered. Banks are also being selective in lending, Maheshwari remarked.
The recent tax-free bond issue of port trusts failed to evoke strong response from investors. For example, the Ennore Port, Dredging Corporation of India and the Jawaharlal Nehru Port Trust (JNPT) could not raise even half the targeted amount through bond issue.
Only 40 percent of the targeted Rs 53,500 crore through tax-free bonds in 2012-13 to build infrastructure could be raised by industry players.
Some of the companies like Jawaharlal Nehru Port Trust, Ennore Port and Housing and Urban Development have raised less than 5 percent of the issue size they intended to raise.
Most issuers have offered a pre-tax return of only about 9.5-10 percent on these bonds this year in the second tranche, against 11.5-12 percent last year.