Govt to appoint consultant for exploring IFCI stake sale

The government has shortlisted three consultants--Boston Consultancy Group, Ernst & Young and Mckinsey--for advising it on stake sale in IFCI among other issues.

The move comes two years after an abortive attempt to induct a strategic partner in IFCI after the company did not agree with the demand of the highest bidder--Sterlite-Morgan Stanley JV--for management control.

The government will soon appoint one of these three as a consultant for advising on stake sale in the financial institution, future course for the institution, growth drivers and the company's role in changed market environment, official sources said.

The consultant would take six months to submit its report, sources said.

Currently, the government does not have any direct ownership in the country’s oldest financial institution. State-owned insurance firms and financial institutions, such as LIC, IDBI Bank and Punjab National Bank, own around 28.5 in IFCI.

The main hurdle in the way of the stake sale is the lack of clarity on the optionally convertible debentures worth Rs 523 crore issued by the government.