The transition from being a non-banking finance company, specialising in infrastructure finance, to a universal bank will entail a lot of hard work, said Rajiv B Lall, Executive Chairman, IDFC, after the RBI granted “in-principle” approval to his company to set up a new bank.

IDFC was born out of the need for a specialised financial intermediary for infrastructure.

Incorporated in 1997 in Chennai, the company was set up on the recommendations of the Expert Group on Commercialisation of Infrastructure Projects.

While infrastructure finance is its bread and butter, IDFC, among others, also has presence in merchant banking, broking, private equity and asset management (mutual fund).

In an interaction with Business Line last month, Sunil Kakar, Group Chief Financial Officer, IDFC, said, “I can tell you banking or no-banking, we will start diversifying our asset base.”

Explaining the rationale behind the move to diversify, Kakar said the company, which is classified as an infrastructure finance company by the RBI, is looking to reduce its concentration risk involved in lending primarily to the infrastructure segment.

As on December-end 2013, IDFC had a loan book of ₹54,552 crore and borrowings of ₹51,630 crore.

It reported 18 per cent increase in profit after tax at ₹1,545 crore in the third quarter.

Among the shareholders that have more than 5 per cent stake in IDFC are the Government of India (17.24 per cent); Sipadan Investment (Mauritius) Ltd (9.97 per cent); and First State Asia Pacific Leaders Fund (5.50 per cent). IDFC got listed on the BSE and the NSE in 2005.

Shares of IDFC closed at ₹127.85 apiece on the BSE on Wednesday, up 3.86 per cent over the previous day’s close.

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