India’s National Bank for Financing Infrastructure and Development (NaBFID) is set to establish its first equity-focused fund, aiming to raise $500 million to enhance support for infrastructure projects. The move, reported by Bloomberg Markets, signals a strategic shift for the state-owned lender to diversify its financing tools beyond traditional debt instruments. The fund will be based at GIFT City, India’s international financial hub, with discussions underway with the International Financial Services Centres Authority (IFSCA) to finalize regulatory approvals.

India’s infrastructure demand is projected to require $4.5 trillion by 2030, per Niti Aayog, creating urgency for expanded financing mechanisms. NaBFID has already seen its total assets grow 44% year-over-year to 1.04 trillion rupees ($11.4 billion) as of December 2025, reflecting its rapid scaling. However, the lender faces challenges in domestic debt markets, where falling interest rates have compressed margins, prompting reliance on derivatives and foreign currency borrowing.

Last month, NaBFID secured $125 million in foreign currency loans from HSBC Holdings Plc, its first such transaction, highlighting its push to reduce dependency on domestic funding. The equity fund, structured in tranches over six to nine months, aims to attract global investors by offering equity stakes in infrastructure projects, a departure from its conventional bond and loan model. IFSCA and NaBFID have not yet commented on the initiative’s specifics.

This development underscores NaBFID’s ambition to modernize India’s infrastructure financing ecosystem, aligning with the country’s economic growth trajectory. By combining debt and equity instruments, the lender seeks to mobilize broader capital while addressing the sector’s long-term funding gaps. The fund’s success could set a precedent for public-private collaboration in India’s infrastructure expansion.