Gujarat will buy out the 50 per cent stake of beleaguered Infrastructure Leasing & Financial Services (IL&FS) in Gujarat International Finance Tec-City, or GIFT City, to ensure there are no delays to the project, said Chief Minister Vijay Rupani on Monday.
“We have taken an in-principle decision to buy out the IL&FS stake in GIFT City as we think this project has a very good future. Already, some of the world’s biggest banks and India’s top financial institutions have opened their offices there. We are encouraging every finance company to set up base there,” he said.
Spread over 359 hectares near state capital Gandhinagar, the completed project will have 62 million square feet of commercial, residential, and social real estate. This was supposed to be a competition to Mumbai, the country’s financial capital.
With IL&FS, which had management rights in GIFT City, defaulting on interest payment of its Rs 910-billion debt in September, the Rs 700-billion project has been jeopardised.
The state government’s step is an attempt at damage control. Rupani was in Mumbai on Monday to promote the Vibrant Gujarat investment summit.
Vijay RupaniThis will be held in Gandhinagar from January 18 to 22.
He said once GIFT City will be fully operational, it will change the dynamics of the region. “Many stockbrokers and information technology companies are enquiring with us to set up shop. With a single window facility, GIFT City has a good future and we want to support it,” he said.
Sources in the state government said once the government acquires the stake from IL&FS, it will look for a strategic investor who can take the project forward.
The project was the brainchild of Prime Minister Narendra Modi to develop Gujarat as a global financial centre. The development of the project took off when Modi was the chief minister.
After a new board took charge of IL&FS in October this year, the three nominees of IL&FS on the board of Gift City — Hari Sankaran, K Ramchand and Arun Saha —were removed.
At present, IL&FS is represented by Malini Shankar. The new IL&FS board has already identified assets for sale and has appointed bankers to value the assets and invite bidders.
(With inputs from Rajesh Bhayani)