Infrastructure needs a lot more sponsors
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Those affected were not chicken feed as the withdrawal of GVK and GMR from at least one each of their road projects show. Since equity rarely comes to such projects, the pressure on the sponsor company to provide cash impacts their other sectors too. An interest rate cut helps, but given that costs had risen by upto 300 basis points for many of these in the past three years, a 25 basis point reduction just keeps the projects alive.
In such a scenario how many of such projects can an IDFC take over in a country with a $1 trillion infrastructure deficit, including crematoriums not built?
Subhomoy is a Deputy Editor based in New Delhi.