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• L&T Infra to grow its average ticket size to Rs 200 crore. The infrastructure lender is bearish on coal thermal and roads sectors. The company looking aggressively at raising funds through external commercial borrowings routes and foreign currency loans, says Suneet Maheshwari, chief executive, L&T Infrastructure Finance Co. Excerpts:
• What is your average loan ticket size? Any plans to increase it?
• Our average ticket size is about Rs.165 crore.We are looking to grow it to Rs.200 crore. As our net worth grows, our ticket sizes would also grow.
• Which sectors are you bullish at?
• Roads and renewables(Solar and Hydel power). Our exposure to renewable is about 18-19% and about 40% of that to solar projects. Roads – simply because several roads are being planned to come through the PPP framework for either new alignments or mostly expansions of existing roads. NHAI is actively awarding these projects and so are some state governments too. Power demand will continue to grow – and till such time as fuel issues get sorted out for Thermal plants, renewable seems a good way to build exposure to the sector
• After the rising interest costs, structural issues in the sector, banks have suddenly begun to exercise caution in lending to the sector. Do you as an IFC see an opportunity there?
• A few years back banks were pricing their loans aggressively, almost 50 basis points to 1% lower than the rates NBFCs were offering. We believe that spreads were not reflective of the inherent risks in some of the projects. Now we expect some rationalization of pricing & spreads. Given that the size of our balance sheet is still small that has worked in our favour – as market offers enough space for the numbers we wish to achieve
• In face of the problem of aggressive pricing in thermal power – we converted that into an opportunity – diversifying into renewables...
• What sectors so you see the stress coming from? When do you see the situation to improve?
• There is a stress in the coal thermal and roads sector. In coal thermal it is fuel water availability primarily. Also several new players without inadequate exposure to infra or power projects got into this space. Given the multiplicity of issue the ability of many sponsors to mitigate & manage the web of complex processes and project management adding to these risks. I think, therefore, that coal thermal issues will take greater government support & intervention to sort out. However, in roads sector it is purely input price increase and high interest rates that are contributing to stress. I believe, relatively, this sector is less complex than power – and stress here would resolve itself more quickly.
• Issues in the road infrastructure side-What needs to be done is moderation in the pace of projects – we just need to have a regular & a predictable flow of PPP projects. That would reduce hyper competition and ensure more reasonable bids
• What kind of credit growth are you looking at?
• Last year our credit grew by 60%. This year we might see some slow down in credit, but not too bad.
• Any plans to list L&T Infra as a subsidiary?
• We have no plans of listing ourselves as a subsidiary at this point.

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