Mumbai, June 11 -- Reserve Bank of India's (RBI) new hedging window that lowers the cost of dollar borrowings for the rest of the calendar year is set to spur a fresh wave of overseas fundraising by state-owned lenders. This signals a likely revival in a funding route that sharply declined last year. At least five large institutions-Housing and Urban Development Corp. (Hudco), National Bank for Financing Infrastructure and Development (NaBFID), Power Finance Corp. (PFC), Rural Electrification Corp. (REC) and Indian Railway Finance Corp. (IRFC)-are planning to raise over $5 billion through external commercial borrowings (ECBs), five officials aware of the plans said, as the scheme announced last week could make overseas funding cheaper than domestic debt for these infrastructure financiers. Hudco is among the first movers, as it plans to raise about $1 billion through ECBs by end June, a company official said. "We will be raising it very shortly. The company plans to raise a $1 billion-equivalent loan immediately and another $1 billion before the RBI window closes," the company official said. "We have more or less already tied it up, and by the end of this month, we should be able to draw it." Discussions are at an advanced stage with three foreign banks, the official added. Hudco expects the overseas loan to be substantially cheaper than domestic borrowings-"at least 60-70 basis points (bps) lower than domestic bonds," the official said. NaBFID is also planning sizable overseas fundraising. "Yes; we will definitely do it. Maybe $2-3 billion before the RBI window closes," a senior official said. While the lender expects overseas borrowings to rise from its original plans, the same is unlikely to account for more than half of its total funding. On Monday, PFC floated a request for proposal inviting bids from banks for foreign currency term loans through the ECB route. REC is also preparing to tap the route, although it is awaiting clarity on RBI's subsidy that banks will pass on to borrowers. "There is already work underway. We are ready to raise today itself, but banks need a few days to finalize processes," an REC official said, adding that RBI's move could significantly increase foreign borrowings if pricing becomes attractive. "If foreign borrowing costs 8%, I won't raise a single rupee. If it comes around 6.3-6.5%, I can raise as much as possible," the official said, adding that REC already has over $1.5 billion worth loan lines available with existing banking relationships. IRFC, a regular issuer offshore, is also evaluating the facility. "We haven't had any internal discussions yet, but it is a possibility," a company official said. Emails sent on Wednesday to Hudco, NaBFID, REC, PFC and IRFC on the matter remained unanswered. On 5 June, RBI announced it will provide a concessional forex swap facility for ECBs raised by public sector undertakings until 31 December 2026 for a maximum tenor of five years. In this, RBI will effectively bear the full cost of hedging the dollar exposure, allowing borrowers to access overseas funds at much lower overall cost. This has also been expanded to Indian banks....