Ifci Allots Rs 100 Cr For Preference Shares

The enabling provision in the amended memorandum of association authorised the board of directors to issue the preference shares to a variety of individuals and organisations including FIIs and overseas corporate bodies.

The AGM lasted barely half an hour, during which a section of shareholders expressed strong objections over the IFCI decision against giving away gifts.

IFCI chairman KD Agarwal read through his speech announcing a 25 per cent dividend and put nine resolutions to vote through the disturbances. The resolutions were passed even as a section of the shareholders moved out .

The explanatory statement in the company's annual report which was distributed at the AGM says that issue of preference shares have to be included in the resource raising plan keeping in view the objective of enlarging the capital base, capital adequacy, tax benefits etc. without enlarging the equity base or diluting EPS or net worth per share.

 

At present, only Rs 350 crore out of the authorised capital of Rs 1,000 crore has been fully subscribed. Since preference shares are usually sold at par, IFCI can expect to raise only about Rs 100 crore by unloading the entire quota set aside for the purpose.

The main reason for this could be the reluctance of existing share holders to permit the issue of rights shares since they result in diluting the value of their holdings.

The AGM also authorised the board of directors of IFCI to issue preference shares to existing shareholders, bondholders, employees, banks, insurance companies, FIs mutual funds, companies and other bodies corporate, non-resident Indians, overseas corporate bodies, foreign institutional investors and other persons orttom.inc"-->