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L.N. Revathy

Exposure to Indian cos may rise to $800 m

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Coimbatore Feb. 19 International Finance Corporation, the private sector arm of the World Bank, has strengthened both its presence and exposure in India. IFC decided to decentralise its operations during 2002-03 to be closer to clients. This resulted in the extension of its set-up to Chennai to service the southern parts of the country. It has since strengthened its team too.

Mr Prasad Gopalan, Head, IFC - Chennai, told Business Line that the Corporation's business volumes swelled from $215 million/year in early 2000 to $450 million last year. "We are targeting $800 million this year and are confident of achieving it. Our fiscal ends in June," he added.

IFC's portfolio, comprising 20 per cent investment in equity and the rest in long-term debt, has touched $1.5 billion. "We are keen to develop sustainable business solutions and help units adopt better management practices. Our emphasis is on supporting projects in the manufacturing, infrastructure development and rural sector, particularly in the agri-business space," Mr Gopalan said.

Projects

"Our global exposure in the poultry and meat sector is $220 million. We know their requirements and can look at these companies in a different way," he said, and added that IFC was studying some projects in the cream and dairy products side and the edible oil sector as well.

"Sugar companies in this region and some engineering units have evinced interest in establishing a relationship with us."

While stating that agri-business played a vital role in economic development and the corporation was committed to help reduce poverty levels and improve people's lives in the rural sector, he said "the inherent problem in the South is regulations and size of the units. There are lots of middlemen and the value gets eroded there."

Focus on pvt cos

To a query, he said: "We prefer to deal with private companies and see them grow. Listed companies have access to finance, but there are a number of small and potential units that need support to grow. Our presence induces discipline."

Does this mean that IFC would keep away from investing in listed companies? Pat came the reply "we do and are open to supporting the listed ones too, because the needs are huge and growing. We, however, do not focus on short-term support. About 20 to 40 per cent of our investments in India are with listed companies."

He noted that the markets were growing in emerging economies compared to the developed ones.

Mr Gopalan said IFC's support could not be compared with bank or other financial institutional support because it was designed for a longer tenure.

The corporation is also looking at projects that have social implication. "We are looking at HIV AIDS programme and are committed to giving a grant for rural technology."

More Stories on : Financial Institutions | Rural Development | Agriculture

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