IFCI plans to sell stakes in four associate firms
State-owned IFCI plans to sell stakes in four associates units, including Tourism Finance Corporation of India, as part of strategy to focus on its core business of term lending.
"We don't have problem with associates...we have submitted divestment plan to the government. Once we get approval, we will go ahead with the sale in a gradual manner," IFCI Deputy Managing Director Sanjeev Kaushik said.
The Industrial Finance Corporation of India (IFCI) board has already approved divesting the entire 45.5 per cent stake in associate firm Hardicon as per its plan to exit from non-core business activities.
Other four associates of the country's oldest financial institution are Tourism Finance Corporation of India (TFCI), Himachal Consultancy Organisation (HIMCON), North India Technical Consultancy Organisation (NITCON) and KITCO (formerly Kerala Industrial and Technical Consultancy Organisation).
Hardicon is a non-listed associate company of the IFCI. It is owned by financial institutions like IFCI, SIDBI, SBI and several other public sector banks and state-level entities.
The company was set up in 1985 to facilitate overall industrial development of the country by addressing technical consultancy needs of industry and corporates and promoting entrepreneurship.
Mounting bad loans pushed the IFCI into a Rs 45.17 crore loss for the third quarter ended December 2016 as against profit of Rs 154 crore in the same period a year ago.
Gross NPAs of the company increased more than three-fold to 25.8 per cent because of downgrading of certain standard accounts in current nine-month period and reduction in the loan portfolio due to prepayments and low credit offtake.
In absolute terms, there was addition Rs 2,970 crore to the gross NPA head during the quarter.