IFC looks at small town investment opportunities

Responding to the promise demonstrated by industries in India's smaller cities, International Finance Corporation (IFC)- the private finance arm of the World Bank - has planned to look at small and medium scale units in these cities across industry sectors.

Iyad Malas, director for South Asia, IFC, said on Tuesday that the smaller Indian players in the auto components segment have performed well and are making significant investments to become globally competitive.

"India has the potential to become the global hub for high quality low-cost auto components thanks to these units with high technical competence and IFC will support such units," Malas said.

Malas was addressing mediapersons to announce about IFC's $7.7 million investment in auto components manufacturer RSB Group.

He said IFC will also look for opportunities in the areas of biotechnology and pharmaceuticals, infrastructure and fruit processing among others.

It recently invested in a Coimbatore-based light engineering unit in the Rs 100 crore annual turnover bracket, Malas informed, adding that the investment can come as equity or as term loan.

Malas said that investments would generally not exceed 20 per cent in equity or 25 per cent of the total cost of a project, as the case might be.

According to him, IFC's investments in India during 2005-06 (July-June) were $400 million. "We expect to increase our investments but I can't give you any number as we are open to new opportunity," Malas clarified.

IFC will also be actively look at investments in the wind energy sector and channelising monetary benefits of carbon credits for Indian investors, he added.