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Mr Atul Kumar Rai

Our Bureau

New Delhi, July 14 IFCI’s top management on Monday said that the idea of inducting a strategic investor in the company had not been abandoned. It was, however, made clear that any such process could begin only after the issue on ‘convertibile debentures’ was sorted out.

The earlier process, initiated in October 2006, for inducting a strategic investor, cannot be revived from where it was left as both the market as well as the company’s condition had substantially changed ever , an official said.

“We are very much open to it (inducting a strategic investor). There were certain issues why it did not happen last time and we believe that as and when we have the requisite preconditions in place, this process should still be examined and considered as necessary path for the company to accelerate its growth”, Mr Atul Kumar Rai, Chief Executive and Managing Director, told a press conference here.

He highlighted that no strategic investor would enter the picture knowing that a part of the convertible debentures in IFCI balance sheet could get converted at par, giving a majority stake to the owners of the debentures.

Mr Rai also said that he was yet to get any response from the Government on the debenture issue, indicating that any process for inducting a strategic investor may not commence in the near-term.

On capital raising plans, Mr Rai said that the company had no immediate plans to go in for any equity capital. He, however, indicated that the company may go in for private placement of debt in early 2009 or by the end of the current fiscal. “Our capital adequacy is now 19 per cent as against the regulatory requirement of 10 per cent”, Mr Rai said.

IFCI has reported net profit of Rs 151.07 crore on a total income of Rs 313.42 crore for the quarter ended June 30, 2008. This is the sixth quarter in the running the company was showing net profit. In the June quarter last year, it

reported a net profit of Rs 246.86 crore on total income of Rs 485.57 crore.

Mr Rai said the performance numbers for the two quarters were not “strictly comparable” as the June 2007 results had income tax refund of Rs 135 crore. Moreover, the latest quarter does not have grant component of about Rs 40 crore that IFCI was receiving from the Government up to December 2007.

“But for these two entries—income tax refund of Rs 135 crore and grant amount of Rs 40 crore, our June 2008 profits would have been higher by 50 per cent over the same quarter in the previous year. This is not apparent on the face of the accounts”, Mr Rai said.

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