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IFCI’s board of directors has given the nod to sell the company’s entire 26.09 per cent stake in Tourism Finance Corporation of India Ltd (TFCI), the only government-promoted financial institution for funding tourism projects.
Exit non-core assetsThe decision to sell the entire 26.09 per cent stake in TFCI is part of IFCI’s plan to exit its non-core assets, Sanjeev Kaushik, Chief Executive Officer, IFCI, told BusinessLine .
“I am looking to sell this entire stake at the earliest. There are two routes available before us — block deal window or through bilateral auction. I am tempted to go with the block deal window as it is more transparent. We are yet to firm up the route,” Kaushik said.
IFCI’s board had in April this year mandated valuation of the stake from an external agency. With that exercise now complete, IFCI board gave its green signal for entire stake sale, he said.
In recent years, IFCI has been on a value unlocking spree, looking to divest stakes in several of its subsidiaries, associate and portfolio companies, such as the National Stock Exchange.
IFCI has been progressively diluting its shareholding in TFCI. As of end March 2017, IFCI had 29.36 per cent stake in TFCI.
The other main shareholders as of end March 2017 include Bank of India (4.70 per cent), Life Insurance Corporation (6.71 per cent), United India Insurance (1.48 per cent) and Oriental Insurance (1.07 per cent).
Net loss widensMeanwhile, IFCI, a government company, has for the quarter ended March 31, 2017, reported a net loss of ₹318 crore. It had reported a net loss of ₹101 crore in the same quarter last fiscal.
For the entire 2016-17, IFCI has reported a net loss of ₹459 crore as compared to a net profit of ₹338 crore in the previous fiscal.
Kaushik said several factors, including drop in business, pre-payments, reversal of interest income due to non-performing assets (NPAs) led to the lacklustre financial performance in 2016-17.
He also said that recoveries (from NPAs) had improved in the fourth quarter with as much as ₹1,000 crore being collected in those three months.
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