IFC considers buying up to 10% in IFCI

IFC considers buying up to 10% in IFCI

New Delhi: World Bank unit International Finance Corporation (IFC) may consider buying as much as 10% of IFCI Ltd, India’s oldest project financier, which is seeking a new investor. “We are in talks with IFCI," Paolo Martelli, IFC’s regional director for South Asia, said on Thursday.

IFCI, the third best performing stock on the Bombay Stock Exchange’s (BSE’s) 500 Index this year, plans to sell a 26% stake to a strategic investor to improve its financial performance and exit non-performing assets, or those that needed to be liquidated. The lender is also in talks with multilateral institutions.

The board on 1 December agreed to allow Indian state-owned banks to convert bonds issued by IFCI into equity, the firm said in a statement on Tuesday. State-owned insurers that have lent money to IFCI will convert a part of their bonds to retain their stake following the fresh share sale.

Blackstone Group Lp., manager of the world’s biggest buyout fund, and billionaire Wilbur Ross are among eight investors bidding for a stake in India’s first auction of a lender. A group led by New York-based buyout firm J.C. Flowers & Co. will also compete with Infrastructure Development Finance Co. for the stake in IFCI.

A group comprising Sterlite Industries India Ltd and Morgan Stanley and a team consisting of Cargill Financial Services Corp. and Texas Pacific Group Flowers along with the groups led by Ross and Flowers, have carried out due diligence, IFCI said.

IFCI has risen more than eightfold this year on BSE. The shares fell Rs1.15 to Rs105.80 on Thursday.