NEW DELHI: State-run non-banking financial company IFCI Limited is scripting a multi-pronged strategy to turn back to profitability. The move will help the loss-making company seek additional capital support from the government, which holds a 56.42 per cent stake in it, to meet regulatory norms and for growth capital, amid mounting losses and high bad loans.
For IFCI, the priorities are offloading stake in non-core assets, focusing on recovery through bankruptcy process and de-risking balance sheet by being selective in its financing of projects, said E Sankara Rao, MD & CEO. “We are cleaning up the books and stepping up our recovery efforts, in order to raise additional capital that will help us to expand and grow our balance sheet.
This fiscal, we expect to raise about Rs 2,000-2,500 crore from divestment of our holdings in certain non-core assets, including some of our subsidiaries,” said Rao. IFCI has six subsidiaries, besides real estate holdings and stakes in the National Stock Exchange of India and the Clearing Corporation of India.
The 70-year-old lender is also betting on strong recoveries from cases referred to NCLT. “We have recovered Rs 1,207.51 crore from NPAs in 2018-19, of which the recoveries through NCLT stood at Rs 447.98 crore, from others at Rs 527.47 crore, and miscellaneous recoveries at Rs 232.06 crore,” Rao noted.
Overall, IFCI has recovered Rs 2,552.45 crore from its 10 large NPAs and unquoted investments in FY19, and has resolution of about Rs 8,000 crore worth of NPAs in the pipeline. “Of this, the recovery via NCLT route could be Rs 1,000 crore,” he added.
As on March 2019, IFCI’s gross NPA stood at Rs 8,610 crore against Rs 8,672 crore a year ago, while its net NPA was Rs 4,069 crore as against Rs 5,127 crore. Going ahead, Rao said, the focus will be to maintain positive net interest income, report operational profits and maintain capital adequacy. “IFCI is consciously enhancing proportion of short-term and medium-term loans with focus on sunrise sectors with good credit ratings and double-digit growth prospects and focusing on financing brownfield projects while quitting power projects,” he added.
The lender has sought Rs 1,100 crore capital support from the government. It has received capital infusion of Rs 100 crore earlier and hopes to get the provision of Rs 200 crore as equity capital infusion before the end of this fiscal as promised in the interim Budget. With a clear roadmap, Rao said he could see a glimmer of light at the end of the tunnel and IFCI will break even in the next few years.