IFC to take 20% stake in Tata-sponsored NBFC

International Finance Corporation (IFC) is set to take a 20 per cent stake in FinCo, a non-banking finance company sponsored by Tata Capital Limited.

IFC, along with other private investors, has proposed to participate in the project through equity investment.

The initial capitalisation of FinCo may be up to $20 million. The proposed IFC investment is an equity investment for acquiring up to 20 per cent stake in FinCo.

The project involves setting up a new non-banking finance company FinCo, focused on providing financing and advisory activities mainly to small and medium enterprises (SMEs) in India that are engaged in businesses that have a positive environmental impact and fight climate change.

FinCo will offer debt financing and advisory services in areas such as cleaner production, energy efficiency, renewable energy, sustainable water and sanitation and waste management, environmental clean-up, carbon finance, emissions reduction and effluent disposal.

The key sponsor for the company is Tata Capital Limited, subject to the approval of its board. Tata Capital is a subsidiary of Tata Sons Limited and caters to retail, corporate and institutional customers directly, or indirectly through its subsidiaries through consumer finance and advisory services, corporate finance.