IFCI aims to reduce its net NPA ratio by 200 bps by March 2015

In last one month, IFCI has sold NPAs worth Rs 200 cr to asset reconstruction companies

Government-owned Industrial Finance Corporation of India (IFCI) is aiming to reduce its net NPA ratio by 200 basis points by the end of this financial year, its deputy managing director Achal Kumar Gupta said on Monday.

“We are focusing on improving our asset quality. We have stepped up our loan recovery efforts and are also selling NPAs to asset reconstruction companies (ARCs). Our net NPA ratio is currently around 10 per cent. We are hoping to reduce it by further 200 basis points by the March, 2015,” Gupta told reporters at a conference in Kolkata.

In the last one month, IFCI has sold NPAs worth Rs 200 crore to ARCs.

Gupta said the company is currently evaluating opportunities to sell more NPAs but declined to provide further details. He added that with IFCI now joining the Corporate Debt Restructuring (CDR) cell, the pressure on its credit quality is expected to ease further.     

The company has also trimmed its stake in Tourism Finance Corporation of India as part of its objective to pare non-strategic investments.

“We have sold 2.5 per cent stake in the Tourism Finance Corporation at Rs 44-45 per share. Following this transaction, we now have 40 per cent stake in the company,” Sudhir Garg, executive director, IFCI, said.

IFCI is also planning to sell its entire stake in its capital market subsidiary IFCI Financial Services. It, however, has postponed its plan to divest its 2.5 percent stake in National Stock Exchange (NSE).

“The bids received were lower than our expectation and hence, we decided not to sell our 2.5 per cent stake in NSE. We will sell the shares only if we get the right price,” Garg said.

IFCI is currently in the process of raising up to Rs 2,000 crore through public issue of secured, redeemable, and non-convertible debentures. The proposed fund raising is part of the company’s overall borrowing plan of Rs 10,000 crore during 2014-15.