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Our Bureau

Looking at the investment as long-term one: Executive Director

Mumbai , Nov. 13

Infrastructure Development Finance Co Ltd (IDFC) on Monday announced the purchase of 8.71 per cent equity in Asset Reconstruction Co Ltd (Arcil) for a consideration of Rs 57.46 crore.

Arcil, India's first asset restructuring company, is sponsored by SBI, ICICI Bank, IDBI and PNB. IDFC has subscribed to the un-subscribed portion of the rights issue offer by Arcil, which closed last month. The infrastructure finance company will be paying Rs 30 per share.

Mr Vikram Limaye, IDFC's Executive Director, told Business Line that the company was looking at the investment in Arcil as a long-term one that would go beyond the equity purchase. "Firstly, the decision was from the financial perspective. With Arcil involved in re-structuring NPAs across all segments, we felt that investing in the company made financial sense for IDFC," he said.

In the long-term, IDFC and Arcil could work together to restructure assets in the infrastructure space, which is the core competency of IDFC, as also undertake post-restructuring operations.

Mr Limaye said IDFC was looking at increasing its fee-based income, which at present accounted for 14 per cent of its total operating income. Fee-based income includes revenues from debt syndication, asset management, equity placement and guarantee commissions.

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