Money & Banking

IIFCL’s UK arm on comeback mode, asked to focus on nationally important projects: MD Jaishankar

K.R. Srivats | | Updated on: May 28, 2022
PR Jaishankar, MD, IIFCL

PR Jaishankar, MD, IIFCL

IIFCL recently infused £25 million as capital into its UK arm

India Infrastructure Finance Company Ltd (IIFCL) has asked its London arm IIFC (UK) to focus on nationally important large projects rather than spending energies on financing smaller ones in the country, PR Jaishankar, Managing Director has said.

IIFC (UK)— which faced trouble few years back and ran into negative net worth and accumulated losses of £115 million— is on a comeback mode with the entity registering profits in the last two years, Jaishankar told BusinessLine.

Even banks — which had shied away from supporting IIFC (UK) — have restarted lending to the company, he added. “We have started institutional refinancing out of our UK arm. There are two developed lines— one from RBI ($5 billion window) and the other our own internal accrual line. IIFC (UK) is now getting direct exposure to projects in India in addition to capital equipment import line”, he said.

Loses reduced

It maybe recalled that State-owned IIFCL had in 2008 set up a London subsidiary to provide foreign currency loans to Indian infrastructure project developers, who could avail themselves of loans to import capital equipments. Jaishankar said that IIFC(UK) has now been able to substantially reduce its earlier accumulated losses and that IIFCL had recently infused capital of £25 million into the London arm, taking its overall capital to £100 million. “Our London arm had lot of NPAs. About $400 millionwere supposed to be recovered. That was the plan over 6-7 years. We completed 25 per cent of it last year. This year we hope to finish another 25 per cent and finish it as soon as possible”, he added.

IIFC (UK) has so far sanctioned $3.5 billion for projects with outlays of $20 billion. The amount of disbursement is about $2.5 billion, Jaishankar added. Meanwhile, Jaishankar also ruled out any fresh capital raising by IIFCL in the current fiscal and noted that most of the business growth would be funded out of internal accruals of the government company.

Published on May 28, 2022
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