IFCI plans to sell stake in factoring subsidiary this fiscal

IFCI Factors had to shelve its IPO plan in 2011 due to bad market conditions

State-run IFCI expects to complete part-selling of its stake in IFCI Factors Ltd, its factoring business subsidiary, by the end of this fiscal.

"We plan to sell a part of our stake in factoring business. We have started the process of due diligence. Hopefully, it should be complete by March 2015," IFCI Managing Director Malay Mukherjee told PTI.

The company plans to sell 25-26% stake so that the majority stake remains with IFCI, he said, adding the strategic sale would help IFCI unlock its investment.

Currently, the company holds 100% stake in IFCI Factors Ltd.

Factoring business is a type of financial service wherein a firm sells its accounts receivable to a factoring company, which then pay discounted value to seller against receivable receipts.

Earlier in 2011, IFCI Factors had filed draft prospectus with Securities and Exchange Board of India (Sebi) for an initial public offer for raising Rs 750-1,000 crore from public. It, however, shelved the plan later due to bad market conditions.

Besides, IFCI has also decided to partially sell its stake in NSE. The infrastructure lender at present holds 5.44 per cent stake in the premier bourse.

The board has given in-principle approval for sale of 2.5% stake in NSE, he said.

The country's oldest financial institution initially held 12.44% stake in the Mumbai-based NSE, but sold 7% to Goldman Sachs Group Inc, NYSE Group Inc, General Atlantic LLC and Softbank Asian Infrastructure Fund in 2007.

In December 2012, the financial institution had become a state-owned entity with government getting 55.53% stake by conversion of optionally convertible bonds.

IFCI recently acquired additional 18.98% stake in Stock Holding Corporation of India (SHCIL) from IDBI Bank for an undisclosed amount.

Following acquisition, IFCI became majority owner with 52.86% in SHIL.