The Company was Incorporated on 1st July,1948 at New Delhi. The Corporation provides medium and long-term credits to industrial concerns in India. Any public limited company or co-operative society incorporated and registered in India which is engaged, or proposes to engage itself, in the manufacture, preservation or processing of goods, or in the shipping, mining or hotel industry or in the generation or of distribution of electricity or any other form of power, is eligible for financial assistance.

Turn Around

The Company’s operational income, in the year 2006-07 rose significantly by 21% to Rs.1,990 crore from Rs.1,646 crore in the previous year, while the total income rose by 22% to Rs.2,047 crore in 2006-07 from Rs.1,683 crore in the previous year. The cost of
borrowings of the Company was reduced to Rs.731 crore in 2006-07 from Rs.762 crore in the previous year. Higher operational income and reduced cost of borrowings resulted in a profit before tax of Rs.1,238 crore in 2006-07 compared to a loss of Rs.266 crore in the previous year. Profit after tax (after accounting for extra-ordinary items and transfer from restructuring reserve etc.) was Rs.898 crore in 2006-07 against a loss of Rs.74 crore in the previous year.

The present business strategy of IFCI envisages (a) retaining and enhancing its core competence in long term lending to industrial and infrastructure sectors and (b) expanding fee-based businesses to capitalize on emerging opportunities in Corporate Advisory Services.

In the Stock Market:

The stock has been a punters delight. Continuous flow of information on the company managed to keep the stock in limelight A year ago, the IFCI stock was quoting at Rs 10.75. The news of 26 per cent stake sale to a strategic partner and conversion of a part of the institutional debt into equity had put the stock on a different trajectory altogether. It hit a 52-week high of Rs 121.20 on December 17, 2007.

“For IFCI, the story is really over now, and broadly you could have support at around Rs 32-33, it really needs to get back above Rs 50 before it has any kind of a sustainable up move but most of the financials are going to get a pasting because financials seem to be leading this decline, so its unlikely that it will be the financial group leading out of this decline, so these stocks need to form the basis before they can move higher”.

Future:

The IFCI deal is off. The IFCI board has decided to call off the exercise to rope in a strategic partner through the private placement of 26 per cent equity stake. The lone bidder that had qualified — the consortium of Sterlite Industries and Morgan Stanley – had asked for virtual control of the institution’s management with three nominees and two independent directors. In addition, Sterlite also wanted a covenant under which the appointment of the chief executive officer needs its affirmative consent.

On December 12, the government has written to the IFCI that it would not exercise its conversion option in respect of these debentures aggregating at Rs 923 crore at the moment. The government has also committed Rs 1,300 crore. However, it held back the assistance due to the fact the institution was raising funds through a strategic sale of 26 per cent stake. As per the letter, the government had stated that it would assist the company in case such a need arises.

IFCI would request the government to release the assistance now that the process has been called off. Sources in the IFCI said it was in an advance stage of discussion with IFC (Washington) to raise around $200 million through private placement of fresh shares. In case the institution manages to mobilise funds from both these resources, it would have more than Rs 2,000 crore in liquid cash, which can be leverage to start disbursement, sources said.The company has got grant of Rs 433.4 crore for FY09.

With the kind of bad sentiment and negative news flo