The government has decided to go ahead with the appointment of a consultant to suggest ways to revamp IFCI despite opposition from the institutional lender, a source familiar with the development said today.
“The government has given loan to the company and also stands guarantor to certain loans extended by IFCI. So, why can’t it appoint a consultant to advise on company’s future growth plan,” the source said. IFCI had written to the government opposing the plan to appoint a consultant, saying it was the company board’s prerogative to decide on such issues.
The government was now in the process of inviting technical and financial bids from the shortlisted consultants, the source said. The government had invited bids for appointing a consultant in February for undertaking IFCI’s revamp.
Shortlisted consultants include McKinsey, Boston Consulting Group, and Bain & Co. The consultant will also advise government on its optionally convertible debenture holding of Rs 523 crore in IFCI. If these are converted into equity, the government will have a direct equity holding in IFCI.
Currently, the government holds 13.2 per cent in IFCI through a clutch of state-owned insurance companies.
At 1304 IST, shares of IFCI traded at Rs 58.35 on the National Stock Exchange, down 2.3 per cent from its previous close.