Beginning this fiscal, the cash-strapped IFCI Ltd will reduce its dependence on project finance from 94 per cent of its exposure. In this regard, the institution intends to have a judicious mix of long- and short-term products.
"As a first step, the ratio of long- to short-term products in the budget sanctions for 2001-02 has been kept at 50:50 basis," chairman P V Narasimham told shareholders at the annual general meeting here today.
He said that in line with the expert committee's recommendations, the institution would also change its debt portfolio and increase the proportion of liquid securities and securitised and rated debt.
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IFCI also intends to enter new areas of non fund-based business and also create a new portfolio which would concentrate on mid-sized corporates.
Narasimham also said that over the next two years, IFCI would address two most pressing problems of reducing asset-liability mismatch and completion of the committed projects where assistance was sanctioned in the mid nineties.
The IFCI chairman also said that the stakeholders have agreed to the infusion of Rs 600 crore, in addition to the Rs 400 crore to be brought in by the government, by way of 20-year fully convertible debentures which would help the institution to shore up its capital adequacy ratio to 10.4 per cent.
On non-performing assets, Narasimham said that it rose marginally in percentage terms a reduction in outstanding assets to Rs 18,750 crore at the end of March this year, compared to Rs 198,40 crore a year ago.
At the end of 2000-01, NPAs amounted to Rs 3,937 crore against Rs 4,102 crore at the end of 1999-2000. In percentage terms, NPAs increased from 20.68 per cent at the end of March 2000 to 20.99 per cent at the end of March this year.