IFCI Expands: Major Capital Infusion and Strategic Consolidation

IFCI's board approved a Rs 500 crore capital infusion via a preferential issue of shares to the Indian government. This move is expected to increase the government's stake from 71.72%. The capital was sanctioned through the supplementary demand for grants. A strategic consolidation within IFCI Group has also been greenlit.

IFCI announced on Wednesday that its board has approved a major step forward in the company's financial structure: a Rs 500 crore capital infusion. This will be executed through the preferential issuance of shares to the Government of India, boosting governmental ownership beyond the current 71.72%.

According to a regulatory filing, the board has sanctioned the issuance of 8,07,23,280 shares. This pivotal move, however, awaits ratification at an extraordinary general meeting scheduled for February 28. The groundwork for this infusion was laid during the Lok Sabha session in December, through the approval of the first supplementary demand for grants for the fiscal year 2024-25.

The Industrial Finance Corporation of India, established in 1948 as the country's very first development financial institution, is also exploring substantial restructuring. Recent directives from the finance ministry have initiated a 'Consolidation of IFCI Group', aiming to merge various subsidiaries under IFCI, potentially streamlining operations and strengthening its market position.

(With inputs from agencies.)