IDFC sells shares worth Rs 2,654 cr

Infrastructure Development Finance Corporation (IDFC) has raised Rs 2,654 crore by a qualified institutional placement (QIP), attracting demand for twice the shares on offer, according to an advisor to the sale.

The offer document, which was filed with the National Stock Exchange on June 28, said the Mumbai-based corporation will use the proceeds to disburse more loans and boost its capital adequacy. IDFC sold about 157 million shares at an average price of Rs 168.25 a share.

IDFC, which was given the status of an infrastructure non-bank finance company by the Reserve Bank of India, has to maintain a minimum capital adequacy of 15 per cent and lend three-fourths of its assets to infrastructure. India plans to spend about $500 billion (over Rs 23 lakh crore) in the five years ending 2012 to build roads, ports and other infrastructure projects.

Overseas investors – mainly from the US – along with domestic insurance companies, mutual funds and other investors bid for the shares. The sale attracted almost 50 investors in all, said the official, who declined to be identified. The sale, which opened after close of Monday's trade on the Indian stock markets, closed Tuesday morning.

The sale will dilute IDFC’s equity by about 12 per cent. The lender to infrastructure projects was owned 44 per cent by foreign institutional investors and 20 per cent by the government as of Dec 31, according to its web site.

IDFC lends to power generation and distribution, oil and gas, and transportation sectors, among others. Morgan Stanley India, CLSA India, Credit Suisse Securities and IDFC Capital Ltd helped IDFC raise funds in the share sale. Its shares rose 1.3 per cent to Rs 172.10 on the Bombay Stock Exchange.