With the government sanctioning 148 proposals for SEZ across India last month, this sector is emerging as a potential gold mine for banks.
Plan to disburse over Rs 4,000 cr for these projects.
MUMBAI: With the government sanctioning 148 proposals for special economic zones (SEZ) across India last month, this sector is emerging as a potential gold mine for banks.
Standing in queue to lend to SEZs is a clutch of Indian banks and funding institutions. Negotiations are currently underway to shape a consortium between IDBI Bank, State Bank of India, UTI Bank, HDFC Bank and ICICI Bank.
Even as the government's SEZ proposals cover 40,000 hectares of land with a fund inflow of over Rs 100,000 crore, the banks' focus primarily is on the country's largest proposed SEZ. Together they plan to lend around Rs 4,000 crore to the 35,000 acre Navi Mumbai-Maha Mumbai project promoted by Reliance Industries. The cumulative cost of the proposal is said to be around $1.1 billion.
In fact, IDBI Bank is understood to be at the forefront of this initiative, according to industry experts. Three years ago, IDBI had sanctioned, but not disbursed, almost Rs 2,000 crore for the Navi Mumbai project, which was then being promoted by Nikhil Gandhi's Sea King Infrastructure Ltd. Reliance Industries has since bought out Gandhi. In fact, infrastructure lending is the new flavour in bank lending. Already a host of banks including UTI and IDBI are said to be flying high on airport modernisation and privatisation projects. Then there are huge funding requirements of roads and ports.
Once again, it is being done through a consortium which includes three more banks. They are understood to have agreed in principle to lend to the south-based GVK group which has bagged the Rs 5,000 crore contract for the modernisation of the Mumbai airport, along with a South African consortium, including ACSA and the Bidvest group.
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