India would have its own maritime financier for Sagarmala Development

In order to finance marine projects both domestically and abroad, India’s Ministry of Port, Shipping, and Waterways (MoPSW) is on track to finish repositioning one of its biggest infrastructure development agencies into a non-banking financial firm.

As a Type-II NBFC (Non-Deposits-Investment and Credit Company), the Sagarmala Development Company Ltd. (SDCL) has applied for a Certificate of Registration (CoR) from the Reserve Bank of India. According to Union Minister for Ports, Shipping, and Waterways Sarbananda Sonowal, the certificate of registration is probably going to be issued this month.

Following accreditation, SDCL will provide funding for “all suitable projects in the maritime sector,” which includes shipping and lease financing. Type-II NBFCs are generally defined as those that have a client interface or plan to have one in the future, receive public funds, or plan to accept them in the future. This classification sets them apart from type I NBFCs, which lack a client interface and do not accept public financing.

Because of their access to public money and interactions with customers, Type-I NBFCs are not as closely scrutinized by the RBI as Type-II NBFCs. The application was submitted by the SDCL on December 20, 2024. Every question occasionally posed by the RBI is swiftly addressed by SDCL. In accordance with RBI’s master guidelines, SDCL is drafting the necessary policies to function as an NBFC. It is anticipated that the NBFC-Certificate of Registration (CoR) will be received by June 2025, he stated.

Following its NBFC registration, SDCL would raise various long-term and short-term funds from various financial institutions. The organization intends to lease finance shipping and offer debt and financing to all appropriate marine enterprises. SDCL “will be responsible for the financial aspects of projects” as part of the Bharat Global Ports Consortium, which will search for port-led development projects abroad. According to the Minister, “its role includes formulating financial strategies and offering advice on project financing and execution.”

At present, SDCL focusses on improving infrastructure at existing ports that include capacity augmentation and improving efficiencies. It is also working on development of new ports and allied connectivity infrastructure. In projects, the equity contribution from SDCL in any project SPV will be decided based on the project DPR and financial due diligence. Equity contribution will generally not exceed 49 per cent.

The current SDCL Board of Directors include TK Ramachandran, Shipping Secretary as Chairman; Dilip Kumar Gupta as Managing Director; AC Nayak, Director Finance; R Lakshmanan, Joint Secretary of the Ministry, as one of the directors; and Venkatesapathy S, who will be part of the Board.