State-owned India Infrastructure Finance Company (IIFCL) has registered a 350 per cent rise in net profit for the nine-month period ended December 2008 at Rs 51.25 crore from Rs 11.38 crore last year. During the period, operating profit touched Rs 123.17 crore as against Rs 23.24 crore in the same period last year.
The company made provisions for standard assets at Rs 14.36 crore in the period. IIFCL’s net worth rose from Rs 329.39 crore at the end of March 2008 to Rs 1,110 crore at the end of December 2008.
IIFCL has now entered the market to raise Rs 2,631 crore through private placement of tax-free bonds. The issue, which opens on February 18 and closes on March 6, is also open for small investors as the minimum size of the application is Rs 10 lakh. The coupon rate is 6.85 per cent.
The company had raised Rs 7,369 crore in January at the same rate. With this issue, IIFCL will complete the first tranche of Rs 10,000 crore, given in the first government stimulus package announced in December 2008.
The fund will be used to refinance up to 60 per cent of loans given by banks to the infrastructure companies. Banks and financial institutions will avail this fund at 7.1 per cent and will lend at 10-11 per cent with a margin of around 3 per cent.
The company, within 33 months of commencing operations, has sanctioned financial assistance of Rs 18,720 crore to 88 infrastructure projects, involving a total cost of Rs 1,47,092 crore. During the period, it has made disbursements of Rs 2,315.72 crore compared to Rs 764.52 crore during the same period last year. The cumulative disbursements stood at Rs 4,140 crore.
In addition to the tax-free bonds, IIFCL will raise resources from multilateral and bilateral agencies. The World Bank has agreed to consider a loan of $1.2 billion to the company. The Asian Development Bank (ADB) has sanctioned a loan of $500 million and given availment of $155 million. ADB is also considering sanctioning an additional $500 million. Germany’s KfW is sanctioning promotional loan of ¤180 million to the company, while Japan Bank of International Cooperation (JBIC) has given an ‘in-principle’ sanction of $120 million.