India's infrastructure lender National Bank for Financing Infrastructure and Development (NaBFID) has approved its first partial credit enhancement for Think Gas Ludhiana's planned ₹620 crore ($65 million) bond sale this month. According to reports from Reuters, this marks the first use of NaBFID's partial credit enhancement facility, a government-backed programme designed to help infrastructure projects raise more long-term funding through the bond market. The transaction will be the first bond issue to use the programme since its launch in September 2025, representing a significant milestone in India's infrastructure financing landscape.
The notes are now rated AA+ (CE) by CARE Ratings and India Ratings after the credit enhancement, representing a four-notch upgrade from their standalone rating of A. As reported by Reuters, the facility covers part of any principal or interest shortfall, improving the bond's credit profile and making it more attractive to investors such as insurers and pension funds. CARE Ratings confirmed that the PCE provides an unconditional and irrevocable non-fund-based limit sizing 43% of the proposed NCD amount, covering both principal and interest payments. According to CARE Ratings, the proposed NCDs are supported by NaBFID's unconditional and irrevocable non-fund-based partial credit enhancement covering 43 per cent of the proposed issue amount.
NaBFID Managing Director Rajkiran Rai confirmed to Reuters that the company has sanctioned the first case for credit enhancement, enabling the company to proceed with a bond sale featuring an enhanced rating. According to Reuters, Rai stated that once this model proves successful, they will encourage other A-rated companies to pursue bond issuances as the ultimate aim is to generate funds for long-term infrastructure projects through bonds. The bank will remain involved in the initial phase until cash flow stabilises, as reported by Reuters. Rai did not disclose further details of the proposed issuance, but emphasized the institution's intention to encourage other A-rated companies to access the bond market using the facility.
NaBFID had launched this partial credit enhancement facility in September 2025, but will proceed with the first deal after a gap of nearly 10 months. As reported by Reuters, the sources declined to be identified as they were not authorised to speak to the media, while Think Gas Ludhiana did not respond to Reuters' request for comment. This development represents a significant milestone in India's infrastructure financing landscape, demonstrating the practical application of government-backed credit enhancement mechanisms and the successful implementation of the programme designed to cover part of any principal or interest shortfall, improving a bond's credit profile and increasing its appeal to long-term investors such as insurance companies and pension funds.
