IFCI to generate Rs 2,000 crore from stake sales in NSE, CCI

IFCI, a government-owned Non Banking Financial Company aims to generate Rs 2,000 crore via stake sales in National Stock Exchange (NSE) and Clearing Corporation of India (CCI), depending on the market conditions. In January 2018, IFCI sold 0.20 per cent stake in NSE for Rs 92.51 crore, while it currently holds about 3 per cent stake in the NSE. 

"IFCI is aiming to garner Rs 1,500-Rs 2,000 crore from the strategic sales of its stakes in CCI and NSE provided market conditions are equally conducive. After SEBI has passed the order on the NSE`s co-location scam, the road is clear for the stake sale provided market conditions are also good", E. Sankara Rao, MD & CEO, IFCI has said according to IANS report. 

1. The MD said if the stake sale happens in the current fiscal, it can leverage three times of that (Rs 6,000 crore approximately) to raise funds from the market. While its stock is trading at Rs 8.20 on NSE. 

2. "Once we get these done, we can leverage by 3 times which is Rs 6000 crore . We may not raise that much funds (Rs 6,000 crore) from the market but we will have the option to do it, that`s more important", he said. 

3. IFCI is also looking for permission to divest part of its stake in its subsidiary -- Stock Holding Corporation of India. StockHolding has been profit making and dividend paying company right from its inception. As on date, IFCI holds 52.86% equity shareholding in StockHolding, making it a subsidiary Company of IFCI. 

4. Rao said to divest stake in the subsidiary, IFCI has to obtain government permission first. The NBFC is also seeking Rs 200 crore capital infusion from the government. 

5. Rao is optimistic that if the strategic sales take place and the government gives permission for part of stake sale in Stockholding and the capital infusion comes about, then the company can get into profit mode

6. Rao is optimistic that the NBFC will be able to lower its Gross and Net NPAs in 2019-20. 

7. Gross NPA is Rs 8,400 core for 2018-19 and net NPA is Rs 4000 crore, and the NBFC has done 61 per cent provisioning for the NPAs. In 2018-19 the FI-cum-NBFC recovered Rs 2600 crores, he said. 

8. Total book (loan and investment ) size is Rs 17,000 crore and balancesheet is Rs 21,000 crore, he added. 

9. The IFCI had exposure to seven out of 12 cases initially referred by the RBI to the NCLT under the Insolvency and Bankruptcy Code (IBC).