The race to get new banking licence is hotting up as the deadline for applying licence nears with the developmental financial institution IFCI Ltd deciding to enter the fray to get banking licence.
The decision to apply for banking licence electrified the trading in the counter, where 1.22 crore shares were traded in about 90 minutes on the NSE this morning.
The stock was up by 10.36 per cent or Rs 2.30 at Rs 24.50. The news of banking foray by IFCI has brought a dramatic twist to the stock price within a day after it had hit a 52-week low of Rs 21.25 only on Thursday.
IFCI Ltd’s board of directors had on June 27 given its nod to present an application to the Reserve Bank of India (RBI) for getting a banking licence.
While many private sector entities including those in the NBFC space, have indicated their interest to apply for banking licence, what differentiates IFCI and the Postal Department which has already applied for it, from others are that they carry the Government of India tag.
IFCI, during the course of last year had converted its convertible debentures that the Government held into shares resulting in the paid-up capital of the company more than doubling from Rs 737.84 crore to Rs 1,660.84 crore (as on December 31, 2012). At the end of last fiscal, the equity was Rs 1,662.04 crore.
Promoter, public shareholding
Consequently, the shareholding of the promoter (GoI) in the company was at 55.53 per cent as at the end of March 31, 2013 and public shareholding was 44.47 per cent.
IFCI had stated, in a note attached to the 2012-13 fiscal results, that it has become “deemed government company’’ according to the provisions of the Companies Act.
During last year, IFCI’s total income on a standalone basis was Rs 2,705.85 crore and the net profit was Rs 450.87 crore. The EPS was Rs 4.14.
The postal department had yesterday submitted an application to the RBI for banking licence. This makes at least two Government-owned or deemed to be owned institutions entering the fray to get new banking licence.