Govt to hike IFCI stake to 51%, infuse Rs 60 crore

Tags: Companies
Government plans to hike its stake in IFCI Ltd to 51% by infusing Rs 60 crore in the country's oldest financial institution.

Even though the government had a majority shareholding in the term lender, at present the stake is nearly 48% on account of inclusion of preference share capital.

Finance Ministry would seek Cabinet approval to hike its stake in the IFCI to 51% by pumping in Rs 60 crore, and make it a "government company", sources said.

To increase its stake, government is looking to acquire preference shares from existing stakeholders of IFCI, they added.

In this regard, the Department of Financial Services has floated a draft Cabinet note to Corporate Affairs and Law Ministries, among others. Approval would be sought from the Cabinet Committee on Economic Affairs (CCEA).

At the end of March 2014, government held 47.93% stake in IFCI.

Under provisions of the new Companies Act, many of whose provisions came into force from April 1, IFCI is not a government company.

As per Section 2 (45) of the Act, a government company means any company in which not less than 51 peer cent of the paid-up share capital is held by the central government or state government or governments, among others.

After getting Cabinet approval in August 2012, the government had increased its stake in IFCI to 55.53% by converting Rs 400 crore worth convertible debentures and Rs 523 crore worth optionally convertible debentures into equity.

However, IFCI's total paid-up capital of about Rs 1,925 crore comprised Rs 1,662 crore as equity capital and nearly Rs 264 crore as preference share capital.

Sources said that after inclusion of the preference share capital, government's shareholding is around 47.93%.

IFCI or the Industrial Finance Corporation of India was set up in July 1948. In 1993, the entity was changed from a statutory corporation to a company under the Companies Act, 1956.

Later the name was changed to IFCI Ltd from October 1999.

EDITORIAL OF THE DAY

  • By banning the sale of BS-III vehicles, SC has ruled in favour of public health

    Automobiles, commercial vehicles and two-wheeler manufacturers have no alternative but to comply with the Supreme Court directive of not selling BS-II

FC NEWSLETTER

Stay informed on our latest news!

TODAY'S COLUMNS

Sandeep Bamzai

Cut & Thrust: SRK’s ALPHABET SOUP

On Saturday, the Enforcement Directorate sent a show cause notice ...

Ananda Majumdar

Power of risk in politics

A counter na-rrative appears to be emerging in the ongoing ...

Zehra Naqvi

Success lies in learning to embrace failure

Among the thronging multitudes that offer you lessons on success, ...