Comments
IFCI, a government company, has written to the Finance Ministry seeking the promised ₹200-crore capital infusion, a top official said.
“Now that we have cleaned up our balance sheet, we are growth-ready and this ₹200-crore equity capital support will enable us to expand and grow our balance sheet,” E Sankara Rao, MD & CEO, IFCI, told BusinessLine .
It may be recalled that the government had made a provision of ₹200 crore as capital infusion in IFCI in the interim Budget. Currently, the Centre holds 56.42 per cent stake in IFCI.
Besides the government’s proposed capital infusion, IFCI is also pinning hopes on approval from the Centre for offloading stake in certain non-core assets, including in some of its subsidiaries.
Rao said that IFCI expects to mop up ₹500-1,000 crore from divestment of its holding in certain non-core investments/subsidiaries.
It is also betting on strong recoveries from cases referred to the NCLT.
“With our debt-to-equity ratio at 3.8, we can easily mobilise another ₹4,000 crore debt if the government pumps in the promised ₹200 crore equity and we are allowed to raise money from sale of shareholding in non-core companies,” he said.
Rao said that IFCI’s plan to sell its stake in the NSE, the country’s largest bourse, is back on the table now that SEBI has passed the orders in the co-location scam, which had cast a cloud on the valuation of the NSE.
“We will look to offload our NSE stake this year at the appropriate market conditions. The path is quite clear,” Sankara Rao said. IFCI currently holds about 3 per cent stake in the NSE.
Improved fundamentals
Rao said the fundamentals of IFCI have improved in the last two years.
The credit rating of fresh sanctions has improved to A- and A+ in 2017-18 and 2018-19, respectively, from BBB+ in 2016-17, while enhancing the portfolio yield to 11.79 per cent.
In 2018-19 alone, IFCI had recovered as much as ₹1,000 crore from insolvency-related cases. IFCI had exposure to seven out of 12 cases initially referred by the RBI to the NCLT under the Insolvency and Bankruptcy Code (IBC).
Of the seven cases with exposure of ₹2,386 crore, IFCI recovered ₹376.40 crore in two cases.
In addition, IFCI had, during 2018-19, recovered another ₹585 crore through the NCLT route.
Rao also highlighted that IFCI has registered an improvement in disbursement-to-sanction ratio to 61 per cent and 81 per cent in 2017-18 and 2018-19, respectively, from 38 per cent in 2016-17, which reflects the operational efficiency and clarity on business strategy.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.