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IFCI is now a PSU as Govt ups its stake to 51.04%

IFCI is now a PSU as Govt  ups its stake to 51.04%
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IFCI Ltd has now become a state- owned firm with the government increasing its stake in the infrastructure financing firm to 51.04 per cent. Government has acquired IFCI’s 6,00,00,000 Preference shares of Rs 10 each from certain scheduled commercial banks and has consequently
increased its holding from 47.93 per cent to 51.04 per cent of the paid-up share capital.

“As a result of...increase in shareholding of the Government of India, IFCI has become a ‘Government Company’ as per the provisions of Section 2(45) of the Companies Act, 2013, with effect from April 7, 2015,” the company said in a BSE filing.

The Industrial Finance Corporation of India was set up by government on July 1, 1948 as the first Development Financial Institution in the country. IFCI was provided access to low-cost funds through the central bank’s Statutory Liquidity Ratio or SLR which in turn enabled it to provide loans and advances to corporate borrowers at concessional rates.

By the early 1990s, it was recognised that there was need for greater flexibility to respond to the changing financial system. It was also felt that IFCI should directly access the capital markets for its
funds needs.

It is with this objective that the constitution of IFCI was changed in 1993 from a statutory corporation to a company under the Indian Companies Act, 1956. Subsequently, the name of the company was also changed to “IFCI Limited” with effect from October 1999.

Meanwhile, the Finance Ministry on Monday said, “The Government Company IFCI is now better equipped to participate in the country’s growth movement by lending to diversified industries and, thus, contribute its share towards making the ‘Make In India’ programme a success.”

The primary business of IFCI is to provide medium to long term financial assistance to the manufacturing, services and infrastructure sectors.

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