44447-012 technical assistance consultant's report · technical assistance consultant’s...

Technical Assistance Consultant’s Report

This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents. (For project preparatory technical assistance: All the views expressed herein may not be incorporated into the proposed project’s design.

Project Number: 44447 June 2014

India: Preparing the Bond Guarantee Fund for India (Financed by the Japan Fund for Poverty Reduction)

Prepared by CRISIL Risk and Infrastructure Solutions Limited

Mumbai, India

For Department of Financial Services, Ministry of Finance

Asian Development Bank

TA-8279 IND: Preparing the Bond Guarantee Fund for India

– 1 Consulting Firm (44447-012)

Inception Report

June 2014

CRISIL Risk and Infrastructure Solutions Limited

[iii]

Abbreviations

ADB Asian Development Bank

ASEAN Association of Southeast Asian Nations

BGFI Bond Guarantee Fund for India

CEO Chief Executive Officer

CFO Chief Finance Officer

CGIF Credit Guarantee and Investment Facility

CRIS CRISIL Risk and Infrastructure Solutions Limited/CRISIL Infrastructure Advisory

CRO Chief Risk Officer

DEA Department of Economic Affairs, Ministry of Finance

DFID Department for International Development – UK

DFS Department of Financial Services, Ministry of Finance

DGIS Directorate General for International Cooperation – Netherlands

ECB External commercial borrowing

EIB European Investment Bank

ESMS Environment (and social) safeguards management system

GDP Gross Domestic Product

GFCF Gross Fixed Capital Formation

IDF Infrastructure Debt Fund

IIFCL India Infrastructure Finance Company Ltd.

IIGF Indonesia Infrastructure Guarantee Fund

INR Indian Rupees

IRDA Insurance Regulatory and Development Authority – India

LIC Life Insurance Corporation of India

MDB Multilateral Development Bank

[iv]

MOF Ministry of Finance

NBFC Non-banking finance company

PCG Partial Credit Guarantee

PFRDA Pension Fund Regulatory and Development Authority – India

RBI Reserve Bank of India

SAARC South Asian Association for Regional Cooperation

SEBI Securities Exchange Board of India

SECO State Secretariat for Economic Affairs – Switzerland

SIDA Swedish International Development Cooperation Agency

TA Technical Assistance

USD United States Dollar


[v] TA-8279 IND: Preparing the Bond Guarantee Fund for India

– Inception Report

1. Executive Summary

Investments are the need of the hour…alternative sources of finance required

The Draft Twelfth Five-Year Plan (2012-17) document has set a GDP growth target of around 8% over the period. Investments, which are crucial to achieve growth, are forecasted to reach around 34.2% of the GDP during the period with infrastructure investments alone expected to amount to USD 1 trillion. A major portion of these investments is expected to be carried out by the private sector. It is thus important to understand the potential sources of finance for these investments.

Banks have been the dominant source of finance in the country, with domestic credit forming more than 74% of the GDP. However, in recent years, the banking sector has been facing stress, forming the need for alternative sources of finance. While the corporate bond market has seen a growth over the last 10 years, increasing from around INR 40,000 crores worth of issuances in FY04 to around INR 351,000 crores in FY13 – the market suffers from concentration issues with regards to the kind of issuers and rating of issuances. 90% of the issuances had a rating of AA- and above, signifying an almost non-existent market for low rating issues.

Several initiatives have been taken to encourage bond market expansion…

Three such initiatives include the partial credit guarantee by India Infrastructure Finance Company Limited (IIFCL) and Asian Development Bank (ADB), Infrastructure Debt Fund (IDF), and the recent announcement by the Reserve Bank of India (RBI) to allow banks to provide credit enhancement.

The Bond Guarantee Fund for India (BGFI) seeks to catalyze the bond market further…

CRISIL Infrastructure Advisory (CRIS) has been appointed by ADB to design such a fund which is envisaged to provide credit enhancement to bond issuances in the infrastructure and non-infrastructure sector through a wide range of credit enhancement mechanisms. The structure of the study is as follows.

It will begin with a market assessment exercise, i.e., demand and analysis for bond issuances by investment-rated infrastructure and non-infrastructure companies in India. The objective of this analysis will be to assess the business case for BGFI. The exercise will also include interactions with a wide variety of stakeholders to gain their perspectives and inputs.

If a business case is established, a detailed business model will be prepared to assess the financial viability of this mechanism.

If found financially viable, broad institutional frameworks and structures – legal, regulatory, governance and process frameworks – will then be developed.

The final component of the study will comprise conducting road shows in India and seminars in India and abroad.

A kick-off meeting was held with ADB and the Steering Committee on June 2, 2014. Based on the inputs received during the meeting, the work program has been revised.

This document serves as the inception report which includes the following:

Introduction and background to the study including an overview of the objectives, approach and methodology.

Progress till date including a preliminary analysis of the bond market and a broad stakeholders‘ interaction plan.

Revised work programme.

The Steering Committee has given an in-principle approval to the overall approach and has requested CRIS to proceed to the market assessment.

[vi]

Contents

1. Executive Summary ........................................................................................................................ v

2. Introduction ..................................................................................................................................... 1

2.1 Background to the study ......................................................................................................... 1

2.2 Objectives of the study ............................................................................................................ 2

2.3 Approach and methodology .................................................................................................... 3

2.4 Structure of report ................................................................................................................... 5

3. Progress till date ............................................................................................................................. 6

3.1 Kick-off meeting....................................................................................................................... 6

3.2 Meeting with SEBI ................................................................................................................... 7

3.3 Preliminary analysis of the bond market in India .................................................................... 7

3.3.1 Infrastructure sector ................................................................................................... 7

3.3.2 Bond market ............................................................................................................... 8

3.4 Stakeholder interaction plan .................................................................................................... 8

3.5 Revised work programme ....................................................................................................... 9

4. Revised work programme ............................................................................................................. 10

4.1 Deliverables schedule ........................................................................................................... 10

4.2 Work Plan .............................................................................................................................. 10

5. Annexure 1 – Scope of work ......................................................................................................... 13

6. Annexure 2 – Detailed approach and methodology ..................................................................... 15

6.1 Module P – Project Management .......................................................................................... 15

6.2 Module 1 – Market assessment and situation analysis ........................................................ 16

6.3 Module 2 – Study facilities similar to BGFI ........................................................................... 17

6.4 Module 3 – Develop a detailed business plan ...................................................................... 18

6.5 Module 4 – Review and develop legal framework ................................................................ 20

6.6 Module 5 – Review and develop corporate governance framework ..................................... 20

6.7 Module 6 – Review and develop environmental (and social) safeguard management system

(ESMS) .......................................................................................................................................... 21

6.8 Module 7 – Conduct road-shows and seminars .................................................................... 21

7. Annexure 3 – Draft Stakeholder Interaction Plan ......................................................................... 23

[vii]

List of Tables

Table 1: Private bond market capitalization (as percentage of GDP) ..................................................... 1

Table 2: Key issues to be addressed during the engagement................................................................ 4

Table 3: Deliverables schedule ............................................................................................................. 10

Table 4: Module P: Project Management .............................................................................................. 15

Table 5: Module 1-Market assessment and situation analysis ............................................................. 16

Table 6: Module 2-Study facilities similar to BGFI ................................................................................ 17

Table 7: International facilities similar to BGFI...................................................................................... 18

Table 8: Module 3-Develop a detailed business plan ........................................................................... 18

Table 9: Module 4-Review and develop legal framework ..................................................................... 20

Table 10: Module 5-Review and develop corporate governance framework ....................................... 20

Table 11: Module 6-Review and develop ESMS .................................................................................. 21

Table 12: Module 7-Conduct of road-shows and seminars .................................................................. 21

Table 13: Draft stakeholder interaction plan ......................................................................................... 23

[viii]

List of Figures

Figure 1: Approach and methodology ..................................................................................................... 3

Figure 2: Work Plan .............................................................................................................................. 11

Figure 3: Assignment organization structure ........................................................................................ 16


[1] TA-8279 IND: Preparing the Bond Guarantee Fund for India


2. Introduction

India has requested the Asian Development Bank (ADB) to examine the modalities, scope and potential for the establishment of Bond Guarantee Fund for India (BGFI) that supports the development of the local currency bond market to meet India‘s infrastructure and non-infrastructure financing requirements.

CRISIL Infrastructure Advisory (CRIS) has been appointed for the purpose of designing such a fund. The assignment is being undertaken under a Technical Assistance grant from the Asian Development Bank.

This document – Inception Report – provides a summary of the background, objectives of the study, progress till date and the revised work plan.

2.1 Background to the study

The Draft Twelfth Five-Year Plan (2012-17) document in India has set a target of achieving an average GDP growth of 8%

1 over the plan period. This target might now seem ambitious, considering

the less than planned growth in the previous two years – 4.5% in FY132 (vis-à-vis 5.8% in the Plan

document) and 4.7% in FY14 (vis-à-vis 6.6% in the same document). However, with the appointment of a new government which is widely touted to be progressive, the economy is expected to regain lost ground and move upwards – GDP growth is forecasted at 6% for FY15

3. To sustain this growth and

enable the economy to go higher, the ability to raise the ratio of investment (ratio of gross fixed capital formation (GFCF) to GDP) is widely regarded as critical. This investment ratio for the Eleventh Five-Year Plan is estimated to be around 33.7% and is forecasted to average around 34.2% for the Twelfth Five-Year Plan – investments in infrastructure sector alone are assumed to amount to over USD 1 trillion (or 8% of the GDP) over the five years. A significant portion of these investments is expected to be borne by the private sector and it would be important to understand the sources of financing for these investments.

India has traditionally been a bank-funded economy with domestic credit forming more than 74% of its GDP

4. An increasing need for alternative sources of finance has been felt, especially in the light of the

high requirement of long-term funds to finance future investments and the stress faced by the banking system. The bond market, a suitable alternative, and which is the prevalent form of financing in a number of developing and developed countries (as shown in the following table), however, has long been dormant in India – it forms less than 5% of the GDP.

Table 1: Private bond market capitalization (as percentage of GDP)

Country Private bond market capitalization (%age of GDP)

United States 91.86%

Republic of Korea 59.25%

Japan 37.19%

China 23.08%

Brazil 21.68%

1 Draft Twelfth Five Year Plan: Planning Commission

2 Refers to the financial year from April 1, 2012 to March 31, 2013

3 CRISIL Research

4 World Bank (2011)




Country Private bond market capitalization (%age of GDP)

Thailand 12.73%

South Africa 18.77%

United Kingdom 12.32%

India 4.89%

The Indian bond market is predominantly restricted to instruments rated in the AA category or above, which had a share of about 90% (in value terms) in 2012-13

5 - signifying the limited market access for

issuers with credit ratings below AA. This reflects the low investor appetite for lower-rated bonds and high level of risk aversion in the Indian bond market. Therefore, low-rated entities are not able to source their funds from the bond market, signifying a gap.

Several initiatives have been taken to encourage bond market expansion…

One of them is the Partial Credit Guarantee (PCG) Scheme of India Infrastructure Finance Company Ltd. (IIFCL) and Asian Development Bank (ADB), and the other is the Infrastructure Debt Fund (IDF). While in the former mechanism, credit enhancement is provided through the provision of an explicit partial guarantee by a higher-rated third party (in this case IIFCL which is rated AAA), in the latter, credit enhancement is achieved through a tripartite agreement between different stakeholders.

The proposed BGFI fund is meant to be sector-agnostic and aims to provide credit enhancement to projects/entities through a wide range of structured instruments.

2.2 Objectives of the study

The study aims to assess if there is a business case for BGFI and, if so, to develop a detailed business plan for the entity. The key components and activities will include:

Demand analysis – This will include a comprehensive analysis of the demand for bond issuances by investment-rated infrastructure and non-infrastructure companies in India. This will also include an analysis of entities similar to BGFI, globally and the existing/planned competition in India.

Business planning – This will comprise finalizing the structure, assessing the feasibility and developing the detailed business model – product portfolio, revenue, expenses, liabilities and assets.

Developing institutional structures and frameworks – Post developing the business model, the broad legal, regulatory, governance and process frameworks shall be developed.

Knowledge dissemination – The final leg of this engagement will include organization of road shows in India and regional integration seminars (abroad and in India). The objective of the road shows will be to serve as a capital-raising and marketing platform for BGFI while the seminars will be targeted at ASEAN+3 and SAARC countries to enable them to benefit from the Indian experience.

The detailed scope of work is given in Annexure 1.

5 Prime Database




2.3 Approach and methodology

All key activities in the scope of work have been segregated into the following modules. The execution of the modules is not envisaged, entirely, to be in a sequential manner. The detailed timeline for all the activities is given in the work plan later in this report.

Figure 1: Approach and methodology

Module P – Project management

This module focuses on overall project management under the responsibility of the team leader for each of the seven afore-mentioned modules.

Module 1 – Market assessment and situation analysis

The objective of this module shall be to conduct a demand analysis of bond issuances of infrastructure/non-infrastructure companies of India and establish a business case in terms of the market that BGFI can address. This assessment shall also take into account existing competition, i.e., other credit enhancement mechanisms in the country. A preliminary overview of the legal and regulatory issues shall also be given.

Interactions with a diverse set of stakeholders shall also be held to gauge their views and perspectives on this concept.

Module 2 – Study facilities similar to BGFI

Under this module, a study of various guarantee instruments as well as similar initiatives operating world-wide shall be undertaken.

Module 3 – Develop a detailed business plan

Through this module, the structure of the BGFI shall be finalized and a detailed financial model shall be developed to ascertain the financial viability of the mechanisms.

Module 4 – Review and develop legal framework

As part of this module, recommendations and inputs towards improvement of existing legal and prudential regulations as well as incorporation of the entity shall be made.

Module 5 – Review and develop corporate governance frameworks

Under this module, broad composition, functions and roles of key departments and personnel shall be developed. Also, broad process frameworks shall be designed.




Module 6 – Review and develop ESMS

The objective shall be to develop an environmental (and social) safeguard management system, to be incorporated in the processes of BGFI.

Module 7 – Conduct road shows and seminars

At the end of the engagement, road shows and seminars shall be conducted – the former in India targeting stakeholders within while the latter shall be held in India/abroad targeting members of SAARC/ASEAN+3.

The detailed approach and methodology is given in Annexure 2.

As part of the overall approach, CRIS is cognizant of the key issues that would need to be addressed. These are tabled below.

Table 2: Key issues to be addressed during the engagement

No. Issues

1

Who will own the entity?

Organizations that can provide strong financial and technical support

Support by Government may be essential in the form of capital, one-time debt, subordinate debt, assistance in development of regulatory framework, etc.

2

Who will regulate the entity?

RBI (in case the entity is set up as a non-banking finance company) or IRDA (in case the entity is set up as an insurance company) or MOF (in case the entity is set up under a special act of Parliament like IIFCL). Additionally, SEBI, since this entity would deal in capital market transactions.

Finalization of regulator/regulations would determine associated prudential norms – capital adequacy, disclosure, accounting, exposure, etc.

3

How to ensure a high rating (say AAA) for the entity?

Ownership by entities that provide strong financial and technical support

Sufficient capitalization to cater to a wider asset base

Diversified exposure portfolio – To start with, the entity might cater to a lower diversity composed of ‗relatively stronger‘ or ‗better performing‘ assets/sectors.

4

What will be its product portfolio and the associated structuring/pricing mechanisms?

Prima facie, the entity would cover credit risk. Suitability and feasibility of various guarantee structures (partial, full, first-loss, tranches etc.) would need to be assessed.

Pricing of guarantee instruments would need to be assessed vis-à-vis savings in borrowing costs for issuer.

Bond type and duration – Issuers would not want to be locked in during high-interest rate cycles (fixed rate v/s floating rate; short duration v/s long duration). Also, institutional investors may not be interested in short-duration bonds and might charge a premium for interest rate risk.

5

What are the institutional and process frameworks that need to be in place?

Exposure portfolio and focus areas/thresholds: o Sector coverage o Rating threshold – It would be prudent to start with a minimum investment

grade category (BBB). Lower ratings would require a significantly higher guarantee cover.

Corporate governance – broad organization structure – manpower and departments, qualifications/designations of personnel and their roles and




No. Issues

responsibilities

Business and credit process frameworks – business development, credit appraisal/assessment of claims, underwriting, monitoring and recourse/enforcement

Environmental (and social) safeguards system in adherence with ADB/IIFCL principles

6

How does one promote the marketability and acceptability of the product?

Extensive investor education, capacity-building and marketing initiatives need to be conducted for investors – both institutional and retail and other stakeholders. Regulator education will also be critical as some of the largest corpuses of funds are held by institutions whose investment guidelines are restricted by guidelines given by their respective regulators.

2.4 Structure of report

The inception report is the first deliverable under this study. The purpose of this report is to provide a brief summary of the initial discussions with the stakeholders (including the Steering Committee), and the revised work plan and activities. This report is structured as follows:

Chapter 1 – Introduction (this chapter)

Chapter 2 – Progress till date

Chapter 3 – Revised work programme




3. Progress till date

3.1 Kick-off meeting

A kick-off meeting was held on June 2, 2014 in the offices of the Department of Financial Services (DFS), Ministry of Finance. The attendees at the meeting included:

Mr. Don Lambert, Asian Development Bank

Members of the Steering Committee:

o Mr. Ateesh Singh, DFS

o Mr. I P Singh, Department of Economic Affairs (DEA)

o Mr. Sanjiv Dayal, Reserve Bank of India (RBI)

o Mr. Srinivasa Rao, Insurance Regulatory and Development Authority (IRDA)

o Mrs. Sumeet Kaur Kapoor, Pension Fund Regulatory and Development Authority (PFRDA)

The representative from Securities and Exchange Board of India (SEBI), which is also part of the Steering Committee, was absent.

Representatives from CRIS and associates:

o Mr. Raman Uberoi, CRIS

o Mr. Sameer Bhatia, CRIS

o Mr. Amit Vora, CRIS

o Mr. Mridul Muralidharan, CRIS

o Mr. Jatin Aneja, Amarchand & Mangaldas & Suresh A Shroff & Co.

o Ms. Prashansa Poddar, Amarchand & Mangaldas & Suresh A Shroff & Co.

The meeting commenced with DFS welcoming everyone and ADB presenting the background to the study. Thereafter, CRIS presented the detailed work programme – approach and methodology, work plan and deliverables‘ schedule.

The Steering Committee raised the following points and discussions ensued:

It was agreed that a market assessment shall be undertaken to establish whether a market exists for BGFI, especially in the light of other credit enhancement mechanisms already in place. It was suggested that this analysis shall be submitted much before the interim report. CRIS has agreed to submit the same along with the minutes of the dissemination seminars.

The Steering Committee suggested that issues pertaining to retail bond investors could also be studied. CRIS mentioned that the primary focus of this study is on institutional investors and not on retail investors.

It was opined that the Government might not be able to capitalize such a fund to a large extent. Therefore, other options of capital infusion would need to be explored. The Government could possibly however provide a one-time low cost debt/subordinate debt.

Discussions on why the PCG mechanism has not taken off were held. This was attributed to the high interest rate cycle during the launch of the mechanism.

With the revised plan of including a market assessment presentation, the Steering Committee gave an in-principle approval to the approach and modules, conveyed that the first meeting had accepted the inception of the mandate, and directed CRIS to proceed with the initial modules.




3.2 Meeting with SEBI

On June 13, 2014, a meeting was held with the representative from SEBI (which is also part of the afore-mentioned Steering Committee for this engagement), Mrs. Barnali Mukherjee – General Manager and her team at the offices of SEBI.

CRIS presented the detailed work programme – including salient points from the first Steering Committee meeting on 2

nd June 2014.

The SEBI team was in broad agreement with the objectives and potential of the proposed facility, and also agreed on the proposed approach outlined by CRIS. They also reiterated the need for an interim presentation on market assessment for the proposed facility. This aspect has been incorporated in our revised work plan.

3.3 Preliminary analysis of the bond market in India

The market analysis will be taken up in Module 1. Based on preliminary desk-top research, the following salient points can be highlighted.

3.3.1 Infrastructure sector

The infrastructure sector in India will be the key driver for the bond market, as this sector alone is likely to see investments of around INR 55 lakh crores over the Twelfth Five-Year Plan period.

The private sector is expected to contribute around 50% of the investments in the infrastructure sector.

Banks, which provide more than 50% of the debt required by the infrastructure sector today, are facing increasing stress on their loan book, especially for long-term lending. Many of these institutions have breached/are close to breaching their internally set sector exposure limits (typically 15% of the overall exposure).

The Draft Twelfth Five-Year Plan estimates the demand-supply gap for funding the infrastructure sector (in the period 2012-17) to be around INR 5 lakh crores.

Existing credit enhancement mechanisms such as PCG, IDF and the recent announcement by RBI to allow banks to provide credit enhancement need to be analysed further, in terms of their potential, likely growth and ability to address the above huge funding gap.

o Partial Credit Guarantee (PCG)

The PCG scheme is essentially a re-financing scheme wherein operational infrastructure projects shall issue bonds to re-finance part of their existing loans.

Under the scheme, IIFCL as the AAA rate guarantor would provide a PCG (with a potential back-stop arrangement from ADB) to infrastructure bond issues such that the rating of the issue is enhanced to AA. The PCG was conceptualized in 2011 and the scheme launched in 2012. However, the scheme has not seen much traction since. While a pilot transaction was formalized through a guarantee agreement (in 2013) with GMR Jadcherla Expressway, the latter decided against going for the bond issuance due to the prevailing high interest rate cycle.

o Infrastructure Debt Fund (IDF)

IDFs essentially act as vehicles for refinancing existing debt of infrastructure companies, thereby creating headroom for banks to lend to fresh infrastructure projects. The IDF can be set up either as a trust, i.e., as a mutual fund or as a company, i.e., as an NBFC. The latter has seen some traction in the market.

IDF-NBFC

These IDFs commenced operations about a year back, and targets to take over loans for projects created through the PPP route. The project or the concessionaire will issue bonds to raise funds from the IDF. The take-over or refinancing would be




governed by the tripartite agreement between the IDF, the concessionaire and the project authority, for ensuring a compulsory buyout with termination payment in the event of a default in repayment by the concessionaire. The tripartite agreement binds all the parties collectively and aids credit enhancement. Model tripartite agreements for the road sector as well as the port sector have been finalized and approved by the Government of India.

Two IDF-NBFCs are operational:

India Infradebt Ltd. formed by ICICI Bank, Bank of Baroda, Citicorp Finance (India) Ltd. and LIC. The entity has undertaken its first sanction to Himalayan Expressway Limited.

L&T Infradebt Fund formed by L&T Infra Finance and other companies in the L&T group

o Banks to provide credit enhancement

On May 20, 2014, RBI had issued a draft circular allowing banks to provide partial credit enhancements to bonds issued for funding infrastructure projects by companies/SPVs. RBI has invited comments by banks till June 30, 2014 on this circular.

3.3.2 Bond market

A quick snapshot of the corporate bond market is presented below6:

FY13 marked the tenth year in the development of India‘s corporate bond market. The period has seen an array of policy measures and associated positive responses by participants.

Amount issued through corporate bonds reached INR 351,000 crores – a seven-time increase over the amount issued in FY04. As many as 267 issuers accessed the debt market in FY13 compared to 140 issuers in FY04.

Corporate bond issuances are largely through private placements, with public placements accounting for 5% of the total issuances.

Banking and financial sector institutions (BFSI) dominate the market accounting for about 75% of the annual average issuances in the last 10 years. The private corporate sector accounted for 17% of the total number of issuances. Within BFSI, NBFCs and housing finance companies accounted for INR 105,662 of issuances in FY13.

Top 10 issuers (mostly financial institutions), by value, account for close to 50% of the total number of issuances. Power Finance Corporation (PFC) was the biggest issuer in the last 10 years raising over INR 117,000 crores cumulatively, followed by Housing Development Finance Corp. (HDFC) which raised INR 115,000 crores and Rural Electrification Corp. (REC) which raised INR 103,000 crores.

As mentioned previously, India‘s corporate bond market sees a concentration of AA- and above issuers. This category rose from 66% in FY04 to 90% in FY13. As can be construed, the market for low-rating paper is almost absent.

3.4 Stakeholder interaction plan

Interactions with stakeholders are paramount to garner their views and secure their buy-in into the concept. One-on-one interactions are planned with various stakeholders – Government entities, regulators, prospective bond issuers (infrastructure developers and corporate entities), investors and investment banks – towards the end of June 2014 and the whole of July 2014. A draft interaction plan

6 The CRISIL yearbook on Indian debt market, 2013




in terms of entities/personnel to be met has been developed and is presented in Annexure 3. The same plan has been shared and agreed upon with ADB. In addition to one-on-one interactions undertaken by CRIS, joint interactions along with ADB are planned towards the second half of July in Delhi (July 22-23, 2014) and Mumbai (July 24-25, 2014) with select stakeholders.

3.5 Revised work programme

Based on the inputs received during the kick-off meeting, the work programme has been revised. The same is presented in the next chapter.




4. Revised work programme

4.1 Deliverables schedule

Table 3: Deliverables schedule

S.No. Deliverables/Milestone Estimated date of submission

1 Inception Report (this document) June 23, 2014

2 Market assessment report – (including proceedings of dissemination seminars)

July 31, 2014

3 Interim report October 27, 2014

4 Draft final report December 22, 2014

5 Final report January 5, 2015

6 Proceedings of road shows February 2, 2015

7 Proceedings of regional integration seminars March 2, 2015

Presentation to the Steering Committee shall be made after the submission of the market assessment report, interim report and draft final report.

Based on the inputs received by the Steering Committee, the coverage of Deliverable 2 and 3 have been modified. The ―Market assessment report‖ targeted for submission on July 31, 2014 shall include

Supply-demand analysis including analysis of existing competition

Summary of meetings/interactions with stakeholders

Review of existing legal and prudential regulations pertaining to guarantee operations

Post submission of the Market assessment report, a presentation on the same to the Steering Committee shall be conducted. Once the Steering Committee gives the go-ahead, CRIS will then proceed to the subsequent modules of the study.

4.2 Work Plan

Revised work plan is presented in the next three pages




Figure 2: Work Plan

Activity

Module P: Project Management

1 Mobilize team and participate in kick-off meeting

2 Data Collection

3 Develop stakeholders’ interaction plan - Prepare questionnaire, Contact and fix meetings

4 Prepare inception report

ADB/Steering Committee decision making period

5 Finalize inception report

6 Prepare and submit market assessment report (including proceedings of dissemination seminars)

7 Prepare and submit interim report


8 Finalize interim report

9 Prepare and submit draft report


10 Prepare and submit final report

11 Prepare report on road shows

12 Prepare report on regional integration seminars

13 Progress review meeting with ADB (Telephonic) - Weekly/Fortnightly

14 Internal Value Comm meetings - Fortnightly

Module 1 - Market assessment and situation analysis

1 Review existing demand studies and undertake fresh demand study if required

2 Situation analysis of bond market

3 Present an overview of possible competition to this facil ity

4 Establish relevance of a Bond Guarantee Fund

5 Review existing legal and prudential regulations framework for guarantee operations in India

6 Engage with stakeholders to understand their perspectives on this mechanism and inputs towards

structuring the same

Module 2 - Study facilities similar to BGFI

1 Understand and analyse the prevailing guarantee instruments in the country

2 Review of operations of similar initiatives worldwide

Module 3 - Develop a detailed business plan

1 Analyse various legal entity structuring options

2 Undertake preliminary pricing analysis determining the commercial viability of the mechanism

3 Develop detailed business model

4 Identify sources of equity capital, facil itate meetings and discussion on capital subscriptions

,explore use of promissory notes and callable capital

5 Review treatment of BGFI guarantee under Basel III

Module 4 - Review and develop legal framework

1 Provide recommendations and improvement to existing legal and prudential regulations framework

for BGFI

2 Develop memorandum and articles of association (articles of agreement as referred to in TOR)

3 Provide an overview of tasks required to for incorporation/registration of BGFI entity

4 Conduct disseminations on the afore-mentioned tasks on incorporation

No Months

Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar




Activity

Module 5 - Review and develop corporate governance framework

1 Review corporate governance best practices

2 Prepare a broad organization structure – manpower and departments

3 Prepare a broad overview of roles and competencies/terms of reference for senior management

positions

4 Prepare composition of key committees

Module 6 - Review and develop ESMS

1 Review IIFCL’s/ADB's ESMS

2 Develop an appropriate ESMS for BGFI

3 Provide training to prospective BGFI staff on implementing ESMS

Module 7 - Conduct of road-shows and seminars

1 Assist in arranging and participating in roadshows

2 Plan and prepare at least two seminars

Components for Inception Report

Revised Work Programme

Preliminary analysis of bond market in India

Stakeholder interaction plan

1 Submission of Inception Report

Components for Market-Assessment report

Report on Module 1

2 Submission of Market-Assessment Report

Components for Interim Report

Report on Module 2

Report on Module 3

3 Submission of Interim Report

Components for Draft Report

Report on Module 4

Report on Module 5

Report on Module 6

4 Submission of Draft Report

5 Submission of Final Report

No Months

Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

COMPLETION OF REPORTS




5. Annexure 1 – Scope of work

The proposed study will seek to accomplish the following activities which have been grouped under each of the international and national consultants as given below

A. INTERNATIONAL CONSULTANTS

1. Financial sector specialists

a. work with the Department of Economic Affairs (DEA), Department of Financial Services (DFS), and other selected agencies to familiarize the responsible officials concerning the development of the bond guarantee agency with the BGFI concept, and with the officers responsible for the design of the partial credit guarantee (PCG) scheme for the India Infrastructure Finance Company Limited (IIFCL);

b. review existing demand studies prepared by CRISIL and others for the IIFCL PCG scheme and undertake a demand study of investment-rated infrastructure and non–infrastructure corporations in India for credit enhancements—segregated across infrastructure and non-infrastructure related activities—of their potential bond issuances so as to gain access to the local bond markets with a focus on existing and potential infrastructure financing and other longer-term capital expenditure;

c. as part of the above review (b), engage with all stakeholders including infrastructure financiers and project companies to establish the incentives for all stakeholders for using and providing the credit enhancement product;

d. undertake a preliminary pricing analysis determining the commercial viability of the credit enhancement mechanism;

e. develop the business model for a bond guarantee fund for India (BGFI) based on the outcome of the demand study and distinguish between infrastructure and other activities, (a) taking into account, among other factors the legal framework for guarantee operations in India, pricing structure, leverage ratio, and risk-based analysis; default rates of Indian corporate issuers; and factors driving demand from institutional investors; and (b) ensuring full consultations with the Securities and Exchange Board of India (SEBI) and Reserve Bank of India (RBI), which will have regulatory oversight of BGFI operations;

f. review and develop the prudential regulations framework in line with RBI and SEBI requirements including level of capitalization, liquidity requirements, and others;

g. assist DEA and DFS with meetings with potential sponsoring institutions—such as the IIFCL—to reach agreement on BGFI capital subscriptions and their financings; IIFCL is participating with ADB on a bond enhancement scheme, and their participation would be dependent on an assessment of their institutional capacity;

h. assist in arranging and participating in the road shows for BGFI in the major capital market cities of India to garner initial interest in BGFI‘s guarantee services while further promoting the use of the bond market in infrastructure financing;

i. if required, work with DEA and DFS and the corporate governance specialist to prepare the terms of reference for BGFI senior management positions;

j. review the environmental safeguard management system (ESMS) adopted by IIFCL—which is compatible with ADB requirements—and transpose it to BGFI for full adoption

k. study and assess existing competition to BGFI and plans by other multilateral development banks (MDBs) and/or international financial institutions to establish similar facilities (e.g., Guarantco);

l. determine the availability of risk-transfer counterparties (i.e., reinsurance from traditional insurers, banks, MDBs, and development finance institutions);




m. identify other sources of equity capital, including from MDBs, development finance institutions, and the private sector;

n. explore the potential use of promissory notes and callable capital;

o. if required, develop an approach to strengthen the ability of guarantors to enforce their rights following payment of a demand under a guarantee;

p. review the appropriate treatment of a BGFI guarantee under Basel III and by international banking supervisors; and

q. plan and prepare at least two seminars between (a) Association of Southeast Asian Nations, the People‘s Republic of China, Japan, and the Republic of Korea working group and selective members of South Asian Association for Regional Cooperation (SAARC) on bond market initiatives; and (b) the Ministry of Finance, Securities and Exchange Commission, bond dealers and traders of SAARC countries on how to develop action plans to disseminate knowledge gained from the India initiatives.

2. Corporate governance specialist – The corporate governance specialist will work with DEA to present the draft for discussion with government ministries and related government agencies such as SEBI and RBI to finalize the terms of reference for the relevant parties based on the outcome of the discussions.

3. Accountant - The accountant will review and finalize the financial projections of BGFI, its financial statements, and related documents for submission to credit rating agencies.

4. Legal expert

a. develop in coordination with legal specialists the articles of agreement for BGFI to reflect the potential participation of financial institutions and ADB in capitalizing BGFI and in conformity with best international practice, and

b. assist DEA in facilitating the discussion among participating financial institutions and ADB on the agreed capitalization plans.

B. NATIONAL CONSULTANTS

5. Legal specialist – Under the guidance of the international legal expert, and as required under the first phase recommendations, the legal specialist will

a. analyze various local legal entity-structuring options, given the mandates from DEA and RBI, and from a point of view of shareholder liability, taxation, prudential norms, and licensing requirements;

b. facilitate preliminary discussions to enable all stakeholders to appreciate steps required to develop incorporation of articles of agreement; and

c. provide an overview of tasks required to meet actual incorporation and/or registration and filing requirements.

6. Safeguard specialists (1 social and 1 environmental) – The safeguard specialists will support the international consultant in undertaking the following tasks:

a. review IIFCL's ESMS, incorporate the lessons learned by IIFCL and Credit Guarantee and Investment Facility in implementing their respective ESMS, and revise or enhance the ESMS to fit BGFI's operations;

b. discuss with the implementing agency staff, and suggest how the ESMS could be mainstreamed into BGFI's due diligence and credit and risk management and monitoring procedure; and

c. assess the capacity needs of BGFI in implementing the ESMS; based on this, design and/or conduct a training program in implementing the ESMS for prospective BGFI staff.




6. Annexure 2 – Detailed approach and methodology

6.1 Module P – Project Management

Objective: This module focuses on overall project management under the responsibility of the Team Leader for each of the seven modules.

Table 4: Module P: Project Management

Activities

Mobilize team

Develop information/data collection plan

Develop and implement stakeholders‘ interaction plan

Work with Steering Committee and other stakeholders to familiarize them on the development of BGFI

Prepare inception report

Prepare market assessment report (which includes proceedings of dissemination seminars)

Prepare interim report

Prepare draft report

Prepare final report

Prepare proceedings of road shows

Prepare proceedings of regional integration seminars

Mapping with Scope of Work (SOW)

Output Staff

A.1 a)

Inception Report, Market Assessment Report, Interim report, Draft report, Final report, Proceedings of road shows, Proceedings of regional integration seminars, Regular interactions on progress of project

Lead – Team Leader

Support – All other experts

Details and governing principles of key activities

Interacting with a wide range of stakeholders will be instrumental to the success of this engagement. A draft interaction plan is given in Annexure 3.

Regular interactions will be held with the client over the course of the engagement o Weekly/fortnightly calls will be scheduled with ADB to discuss on the progress of the

engagement o Presentations to the steering committee will be made post submission of Market

Assessment Report, Interim Report and Draft Report

Quality enhancement reviews – Our in-house Quality Enhancement team (comprising senior management) shall review the progress of the assignment at fortnightly intervals. Feedback and inputs received will be duly incorporated in the deliverables. This will ensure delivery of quality outputs throughout the assignment.

CRIS will work towards implementing the program within the time schedule. It is pertinent to mention that adherence to the schedule would require close coordination with all the key stakeholders and decision makers. Towards this end, presented below is the assignment organization structure. Responsibilities/activities assigned to the key experts are presented across modules. In order to aid smooth delivery of the engagement, a dedicated Project




Manager from CRIS, will be deployed, who will assist the Team Leader over the course of the engagement and act as an interface with the various experts. Moreover, at regular intervals, we shall engage with established leaders of CRISIL‘s businesses – Ratings, Research, Advisory and Risk Solutions – who between them have more than 100 years of diversified experience, to gain their perspectives and enhance the quality and value of the outputs.

Figure 3: Assignment organization structure

6.2 Module 1 – Market assessment and situation analysis

Table 5: Module 1-Market assessment and situation analysis

Activities

Review existing demand studies and undertake fresh demand study if required

Situation analysis of bond market

Present an overview of possible competition to this facility

Establish relevance of a Bond Guarantee Fund

Review existing legal and prudential regulations framework for guarantee operations in India

Engage with stakeholders to understand their perspectives on this mechanism and inputs towards structuring the same

Mapping with SOW Output Staff

A.1. b), c) Report on demand studies and situation analysis as inputs to market assessment report


Support – Domestic Legal Specialist





Forecast investments and sources of finance and estimate future bond issuances in value terms o Estimates formed by the various sector Ministries, Planning Commission as well as

industry research reports including our own CRISIL Research reports and market assessment report developed during the PCG study shall be taken into consideration during this exercise

o The sources of finance to be looked at would be Banks, non-banking finance companies (NBFCs), external commercial borrowings (ECBs), Insurance Companies, Pension/Provident Funds, Multilateral/Bilateral bodies amongst others

o The issues pertaining to these sources of finance – especially from the perspective of whether they would be enough to address future investment requirements – would be looked at. For instance, we are aware that banks are facing increasing stress on their loan book and it is understood that their current level of growth might not be sustainable going forward, especially for long-term lending

o The objective of the afore-mentioned analysis will be to establish the importance of bond market and arrive at a potential scale/size of the market as well as the need for credit enhancement

o Competition such as PCG, IDF, recent announcement by RBI to allow banks to provide credit enhancement and other planned initiatives, shall be analysed and reviewed whether these are enough to catalyze the infrastructure bond market

o For non-infra sectors, a detailed forecast of investments and sources of finance might not be possible owing to lack of data. In such a scenario we shall establish a rationale and finalize the key sectors that could potentially access the bond market through a credit enhancement mechanism

o A key input towards the above analysis will be to peruse the outstanding ratings data, especially for those entities which have a long-term credit rating below AA category (the potential beneficiaries of BGFI)

Highlight the issues facing the bond market (corporate as well as retail) today o Issuers with low credit ratings not being able to access the bond market o Low risk appetite or investors o Regulatory hurdles with respect to investment guidelines. o Preliminary overview of regulatory hurdles to setting up of BGFI

The objective of this module shall be to establish the relevance of BGFI and assess whether a sizeable market for such a fund exists.

6.3 Module 2 – Study facilities similar to BGFI

Table 6: Module 2-Study facilities similar to BGFI

Activities

Understand and analyse the prevailing guarantee instruments in the country

Review of operations of similar initiatives worldwide


A.1. k) Report on similar facilities as inputs to interim report


Support – International Finance Sector Specialist 2


Analyse the pros and cons of various guarantee instruments, as these could be potential instruments offered by BGFI




There are several initiatives operating world-wide similar to the BGFI. It would be important to understand their operations, best practices and the challenges that they have faced/are facing; learnings from which could be incorporated into BGFI. We will use our extensive global connect including through our parent Standard and Poor‘s to understand these issues better. Some of the facilities that will be studied are given in the table below

Table 7: International facilities similar to BGFI

Entity Description

Indonesia Infrastructure Guarantee Fund (IIGF) Fully government owned entity (Ministry of Finance). Provides risk guarantees for infrastructure projects in Indonesia. CRISIL was involved in developing the guarantee scheme, business and financial models, project appraisal and standard operating procedures manual

Danajamin Nasional Berhad, Malaysia Fully government owned entity [Minister of Finance Incorporated (50%) and Credit Guarantee Corporation Malaysia Berhad (50%)] and AAA rated in the domestic scale provides full guarantees to Malaysian companies to access domestic capital markets.

Credit Guarantee and Investment Facility (CGIF) Owned by ASEAN+3 countries and ADB (Capital = USD 700 million), provides various types of credit guarantees to entities in the ASEAN+3 region to access domestic capital markets.

GuarantCo Sponsored by donors – DFID, SECO, DGIS, SIDA, World Bank, Irish Aid, AusAID, ADA and KfW. Provides risk mitigation instruments (credit guarantees as well as risk guarantees) for local debt issuance – loans and bonds for projects in Africa, Asia, Latin America Central America and Caribbean.

Fondo Nacional de Infraestructura or National Infrastructure Fund, Mexico Administered by Mexico‘s state owned development bank (Banobras), it is an infrastructure fund developed to support private sector investments in the sector including providing guarantees.

European Investment Bank (EIB) Project Bond initiative Under the Project Bond Initiative, the EIB provides eligible infrastructure projects (transport, energy and telecom in Europe) with credit enhancement in the form of a subordinated instrument to support senior project bonds issued by a project company (Senior Bonds) – this would lead to credit enhancement of the Senior Bonds.

Monoline insurers

Monoline insurers, primarily in the United States, provide guarantees to bonds in the form of credit wraps. While they began with providing wraps for municipal bond issues, they branched on to providing wraps for mortgage backed securities and collaterized debt obligations.

6.4 Module 3 – Develop a detailed business plan

Table 8: Module 3-Develop a detailed business plan

Activities




Activities

Undertake preliminary pricing analysis determining the commercial viability of the mechanism

Develop detailed business model

Identify sources of equity capital, facilitate meetings and discussion on capital subscriptions, explore use of promissory notes and callable capital

Review treatment of BGFI guarantee under Basel III


A.1. a), d), e), f) , g), l), m), n), p);

A.3;

A.4 b);

B.6 a)

Report as inputs to interim/draft report

Lead –Team Leader

Support – International Finance Sector Specialist 2, International Accountant, International Legal Expert, Domestic Legal Specialist


Finalize and incorporate inputs received from various stakeholders in structuring this mechanism

Analyze and finalize structuring options in line with pertinent regulatory requirements – level of capitalization, Liquidity requirements, Taxation perspective, Treatment under Basel III

o Prima-facie BGFI could adopt more than one structure to conduct its operations. The objective of this module would be to select the best possible structure, weighing in parameters such as

Regulatory concerns and mandates from DEA, RBI and others Capitalization and shareholder liability, Risk management, Flexibility in operations and International best practices amongst others

o While evaluating the options for structuring, key considerations from a taxation perspective shall also be kept in mind

Tax efficient and regulatory compliant strategies to manage tax exposures Evaluating an appropriate investment structure with tax and regulatory

efficiency Obtaining regulatory approvals for inbound and outbound investments and

repatriation of funds

Finalize the scheme o Design various guarantee mechanisms, if more than one structure is found to be

warranted for the Indian market o Eligibility criteria for issuers, other guarantee parameters such as target rating,

quantum of cover, pricing, security amongst others

Develop a detailed business plan o Design various indicative bond portfolio scenarios, o Structure bond issues and bond repayments, o Quantify risk-transfer / backstopping arrangements o Analysis of default, recovery and guarantee outflows,

While domestic credit rating agencies publish only three-year default data (and no recovery data), global credit rating agencies publish ten-year default data as well as recovery data indicating the maturity of the markets globally. This data would be important to calculate the default and recovery for various sectors/bonds; which would in turn be linked to guarantee outflows.

o Calculate income in terms of guarantee fee, processing fee and treasury incomes o Calculate operating costs o Develop financial statements and ratios o Conduct scenario and sensitivity analysis using Monte Carlo simulation




6.5 Module 4 – Review and develop legal framework

Table 9: Module 4-Review and develop legal framework

Activities

Provide recommendations towards improvement of existing legal and prudential regulations framework for BGFI

Develop memorandum and articles of association (articles of agreement as referred to in TOR)

Provide an overview of tasks required for incorporation/registration of BGFI entity

Facilitate discussions amongst all stakeholders to familiarize them on the afore-mentioned tasks on incorporation

Mapping with SOW

Output Staff

A.4;

B.6

Report as inputs to draft report

Lead – International Legal Expert, Domestic Legal Specialist

Support – Team Leader

6.6 Module 5 – Review and develop corporate governance framework

Table 10: Module 5-Review and develop corporate governance framework

Activities

Review corporate governance best practices

Prepare a detailed organization structure – manpower and departments

Prepare a detailed overview of roles and competencies/terms of reference for senior management positions

Prepare composition of key committees

Review and finalize templates of documents including those required for submission to credit rating agencies


A.1. i), o);

A.2;


Lead – Corporate Governance Specialist, Accountant

Support – Team Leader, International Finance Sector Specialist 2


Develop composition, function and roles of the key departments and personnel. The following table gives an indicative list of such departments and personnel. It has to be noted that since BGFI would be a new entity, several roles and functionalities could be merged to present a lean and efficient entity at the start. The segregation and complexities of the roles and functions could be linked to the size and scale of operations

Vertical Department Horizontal Department

Board and Committees

Key Personnel

Business Development Administration Board of Directors CEO




and Strategy

Appraisal and Underwriting

Claims Assessment

Monitoring

Enforcement and Recourse

Legal

Treasury

Risk

Human Resources

IT

Audit and Risk Committee

Remuneration Committee

Nomination Committee

CFO

CRO

Other Senior Management

At the time of funds-raising/issuing bonds, BGFI would typically undergo a credit rating process. In this context, the accountant would present an overview and create templates of documents to be submitted to credit rating agencies which would include the following - objectives and importance of BGFI for the promoters (BGFI), capital structure and funding mechanism, guarantee mechanism (waterfall), prudential norms, back-stopping arrangements, enforcement and recourse strategy, business plan projections etc.

6.7 Module 6 – Review and develop environmental (and social) safeguard management system (ESMS)

Table 11: Module 6-Review and develop ESMS

Activities

Review IIFCL‘s ESMS (or Environmental and Social Safeguards Framework – ESSF) and ADB‘s ESMS

Develop an appropriate ESMS for BGFI

Provide training to prospective BGFI staff on implementing ESMS


A.1. j);

B.7;


Lead – Environmental Safeguard Specialist, Social Safeguard Specialist

Support – Team Leader


Develop the ESMS keeping in mind the main objectives of such a framework. o Avoid and minimize adverse environmental and social risks due to projects o Ensure that adverse environmental and social risks are well-mitigated to achieve

applicable standards and objectives o Comply with applicable laws and regulations and other safeguards requirements o Provide guidance to staff in appraisal, underwriting, claim assessment, subsequent

monitoring, reporting and undertaking corrective actions o Develop and exercise mechanisms for effective supervision during implementation

6.8 Module 7 – Conduct road-shows and seminars

Table 12: Module 7-Conduct of road-shows and seminars

Activities

Assist in arranging and participating in road shows

Plan and prepare at least two seminars





Activities

A.1. h) q);

Report as inputs to respective proceedings of road-shows and seminars

Lead –Team Leader

Support – International Finance Sector Specialist 2, International Legal Expert, Domestic Legal Specialist

Details and governing principles of key activities:

Two seminars shall be held towards the end of the engagement: (a) ASEAN+3 working group and selective members of SAARC on bond market harmonization initiatives tentatively in Bangkok and (b) the Ministry of Finance, Securities and Exchange Commissions, bond dealers and traders of SAARC countries tentatively in Mumbai on how to develop action plans to harmonize with India initiatives.

Road shows, for both domestic and global audience, will also be held in major cities in India – Mumbai, Delhi, Bangalore, Kolkata (an indicative list) to garner initial interest in BGFI‘s share ownership, guarantee services and investment in BGFI guaranteed instruments.




7. Annexure 3 – Draft Stakeholder Interaction Plan

Table 13: Draft stakeholder interaction plan

S.No. Category Name of firm/organization

Designation

1 Government Department of Economic Affairs

Joint Secretary - Capital Markets


Additional Secretary


Joint Secretary – Infrastructure


Director – Infrastructure Finance

5 Government Department of Financial Services

Joint Secretary – Industrial Finance

6 Government Department of Financial Services

Joint Secretary – Insurance and Pension Reforms, Banking Operations

7 Regulator IRDA Member (F&I)

8 Regulator IRDA Joint Director - Investment

9 Regulator IRDA OSD - Investment Analysis

10 Regulator RBI DGM - Secretary's Department

11 Regulator RBI Principal CGM-Financial Markets

12 Regulator SEBI Executive Director

13 Regulator SEBI General Manager

14 Regulator PFRDA CEO & Trustee - NPS Trust

15 Regulator PFRDA General Manager

16 Regulator EPFO F.A & C.A.O

17 Investor LIC Managing Director

18 Investor LIC ED (Investment Operations)

19 Investor LIC Chief of Investment - Debt

20 Investor ICICI Prudential Life Executive Vice President & Chief





Designation

Insurance Company Investment Officer

21 Investor ICICI Lombard General Insurance Company

Head - Investments

22 Investor HDFC Standard Life Chief Investment Officer

23 Investor Bajaj Allianz Life Insurance

Chief Investment Officer

24 Investor IFFCO Tokio General Insurance

Chief Investment Officer

25 Investor Birla Sun Life Chief Investment Officer

26 Investor SBI Life Insurance Corporation of India

Head-Investments

27 Investor HSBC AMC Portfolio manager – EPFO

28 Investor i-SEC Primary

Dealership Portfolio manager – EPFO

29 Investor Reliance AMC Portfolio manager – EPFO

30 Investor SBI Mutual Fund Portfolio manager – EPFO

31 Investment bank HDFC Bank Group Head - Investment Banking,

Capital and Commodity Markets

32 Investment bank Citibank Head of Global Banking

33 Investment bank Citibank Director - Capital Markets

34 Bond Issuers Adani Group Group CFO

35 Bond Issuers GVK Power and

Infrastructure Director and CFO

36 Bond Issuers DLF CFO

37 Bond Issuers IL&FS Transportation

Networks CFO

38 Bond Issuers L&T EVP (Finance)

39 Bond Issuers Reliance Infra CFO

40 Bond Issuers Raymond CFO

41 Bond Issuers Tata Teleservices CFO





Designation

42 Bond Issuers Mahindra Group CFO

43 Bond Issuers Punj Lloyd Director-Finance

45 Bond Issuers Lanco Infratech MD and Head-Finance

46 Bond Issuers NCC Infra CFO

47 Bond Issuers IVRCL ED (Finance) and Group CFO

48 Banks ICICI Bank President - Wholesale Lending

49 Banks ICICI Bank Head-Debt Capital Markets

50 Banks Kotak Mahindra Bank President - Group Treasury and

Capital Markets

51 Banks Kotak Mahindra Bank VP - Debt Capital Markets

52 Banks SBI MD, Group Executive-Corporate

Banking

53 Banks Bank of Baroda Executive Director

54 Banks Axis Bank President-Corporate Banking

55 Banks IDBI ED - Corporate Banking

56 Others India Infradebt Ltd. CEO and MD

57 Others L&T Infradebt Fund CEO and MD

58 Others IIFCL Chairman and MD

59 Others IIFCL CGM

[26]

Disclaimer

CRISIL Risk and Infrastructure Solutions Limited (CRIS) has taken due care and caution in preparation of this Report for Asian Development Bank. This Report is based on the information / documents provided by ADB and/or information available publicly and/or obtained by CRIS from sources, which it considers reliable. CRIS does not guarantee the accuracy, adequacy or completeness of the information / documents / Report and is not responsible for any errors or omissions, or for the results obtained from the use of the same. The Report and results stated therein are subject to change. CRIS especially states that it has no financial liability whatsoever to ADB / users of this Report. This Report is strictly confidential and should not be reproduced or redistributed or communicated directly or indirectly in any form or published or copied in whole or in part, especially outside India, for any purpose.

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Phone : 91-22-3342 3000

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About CRISIL Infrastructure Advisory

CRISIL Infrastructure Advisory is a division of CRISIL Risk and Infrastructure Solutions Limited, a 100% subsidiary of CRISIL Limited – India‘s leading Ratings, Research, Risk and Policy Advisory Company.

CRISIL Infrastructure Advisory is India‘s premier advisor focusing on policy issues, as well as commercial and contractual issues in the areas of transport, energy and urban infrastructure. We also provide support to international firms planning investments in India. Over a period of time, CRISIL Infrastructure Advisory has built a unique position for itself in these domains and is considered the preferred consultant by governments, multilateral agencies and private-sector clients. We have extended our operations beyond India and are present in other emerging markets in Africa, Middle East and South Asia.

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