IFCI turns a corner with advisory biz; posts first profit in 7 years

Government-owned non-bank IFCI Ltd has finally turned the corner in the 2023-24 financial year, reporting a profit after seven consecutive years of losses following its expansion into government and private corporate advisory services.

The company swung to a profit of ₹128 crore for FY24 from a loss of ₹288 crore in the year before. Standalone revenue improved 19% to ₹896 crore.

It had previously reported a profit in FY16, of ₹379 crore.

IFCI was set up as India’s first development financial institution but was later turned into a non-banking financial company. It owns prime real estate and holds stakes in several companies, including StockHolding Corporation of India.

The company curtailed its lending operations in recent years after being saddled with bad loans. It has since expanded its advisory services. 

In government advisory, IFCI has been appointed as the project management agency for various production-linked incentive (PLI) schemes launched by the Union government. It is also the verifying and monitoring agency for various capital subsidy schemes, including the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme.

Also read: FAME slows down, auto PLI in fast lane

Under corporate advisory, IFCI offers financial, ESG (environmental, social, and governance), and project advisory services. It is also the nodal agency for monitoring loans of the Sugar Development Fund.

In April, the government infused ₹500 crore into IFCI by subscribing to its equity shares on a preferential basis. Following the capital infusion, the Union government holds a 71.72% stake in the company. The rest is owned by public investors. 

The government had previously infused ₹100 crore into the company in September 2022.

The IFCI stock has nearly tripled in the past one year, and ended Tuesday’s trading at ₹45.45 apiece on NSE. The company has a market capitalisation of ₹11,340 crore.