Mumbai: Tourism Finance Corp. of India (TFCI) plans to set up an equity fund of Rs400 crore by the middle of this year that will cater exclusively to tourism projects in smaller towns and rural areas.
“The equity fund will be the first in the tourism industry and also our first,” TFCI chairperson Archana Capoor said.
TFCI would be the anchor promoter. The company hopes to have a co-promoter and two or three other entities as sponsors of the fund.
“We are in the process of fine-tuning details. We hope to launch the fund sometime after June,” Capoor said.
Initially, only domestic institutions would be roped in as sponsors, she said, adding that informal discussions were on with some of them. TFCI is also open to tying up with the corporate sector at a later stage, she added.
The fund would aim at encouraging tourism projects in the smaller centres of the country by investing in the equity of such projects.
“Our aim is to encourage entrepreneurial skills in the smaller towns, which have a huge tourism potential. Any project by talented entrepreneurs, having a commercial value and which can be replicated elsewhere easily, will have our support.”
Though Capoor declined to comment on the issue, it is understood that TFCI would strive to support projects typically in the size of Rs40-60 crore.
TFCI also has considerable expertise in consultancy and advisory services and proposes to strongly focus on this business in the future.
“We can help our customers in restructuring their businesses should they need to do so, given our expertise,” Capoor said.
Apart from an enhanced focus on consultancy and advisory services, TFCI also plans to increase its financing to star hotels in the budget category, which it considers as a high-growth segment.
TFCI’s disbursals in fiscal 2007 stood at around Rs90 crore while this fiscal (2008), it expects the figure to climb to around Rs150 crore.
The company had sanctioned loans of Rs150 crore in fiscal 2007. “This fiscal, we hope to touch the Rs300 crore mark,” Capoor said, adding, “We should post at least 30% jump in our PAT (profit after tax) this fiscal as against our fical 2007 PAT of Rs14.3 crore.”
“Our aim is to double our balance sheet size, which at present stands at around Rs600 crore, over the next three years,” Capoor said.