 "Plan to bring down net NPAs to 3% in next three years: IFCI CEO")
Government-owned lender Industrial Finance Corporation of India (IFCI) Limited on Monday said that it has submitted an action plan to banking regulator Reserve Bank of India (RBI) to gradually reduce its net non performing assets (NPAs). The company plans to bring down its net NPAs to 3 per cent in the next three years.
IFCI’s net NPAs grew from 1.92 per cent in FY’ 2012 to 11.39 per cent in FY’ 2014. In value terms, net NPAs stood at Rs 1,700 crore in the last financial year. Malay Mukherjee, Chief Executive Officer (CEO) and Managing Director (MD), IFCI Ltd, said, “We have submitted an action plant to RBI to gradually reduce our NPAs. We hope to bring it down to 3 per cent in the next three years.”
Mukherjee added, “Selling of NPAs is in the process. We have transferred some of the NPAs to asset reconstruction companies (ARCs) and close to Rs 200 crore has come out of that process.” He said this on the sidelines of a conference organised here. IFCI Limited has received an overwhelming response to the opening of public issue non-convertible debentures (NCDs) to raise up to Rs 2,000 crore, Mukherjee said, adding that it has raised Rs 190 crore in just two days.
The NCDs were opened to public issue on October 20 and would be available for subscription till November 21. It will be offered for three different tenures of five years, seven years and ten years with varying coupon rates ranging from 9.4 per cent to 9.10 per cent.
Mukherjee said, “The proceeds of the money raised will be used towards fresh loans. Of this, 75 per cent will be used for lending or repayment of loans while 25 per cent will be utilised for general corporate purposes.” He added that the main lending thrust would be long-term funding for the manufacturing sector.
SBI Capital Markets, AK Capital Services, Edelweiss Financial Services and RR Investors Capital Services are the lead managers to the issue.
Net profit of IFCI, registered as Systematically Important Non-Deposit taking Non-Banking Finance Company (NBFC-ND-SI) with the RBI, stood at 17.22 per cent in FY’14.
IFCI’s net NPAs grew from 1.92 per cent in FY’ 2012 to 11.39 per cent in FY’ 2014. In value terms, net NPAs stood at Rs 1,700 crore in the last financial year. Malay Mukherjee, Chief Executive Officer (CEO) and Managing Director (MD), IFCI Ltd, said, “We have submitted an action plant to RBI to gradually reduce our NPAs. We hope to bring it down to 3 per cent in the next three years.”
Mukherjee added, “Selling of NPAs is in the process. We have transferred some of the NPAs to asset reconstruction companies (ARCs) and close to Rs 200 crore has come out of that process.” He said this on the sidelines of a conference organised here. IFCI Limited has received an overwhelming response to the opening of public issue non-convertible debentures (NCDs) to raise up to Rs 2,000 crore, Mukherjee said, adding that it has raised Rs 190 crore in just two days.
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“The initial response to the opening of public issue NCDs to raise up to Rs 2,000 crore has been overwhelming. We have raised Rs 190 crore within two days and are mainly reaching out to retail investors,” said Mukherjee.
The NCDs were opened to public issue on October 20 and would be available for subscription till November 21. It will be offered for three different tenures of five years, seven years and ten years with varying coupon rates ranging from 9.4 per cent to 9.10 per cent.
Mukherjee said, “The proceeds of the money raised will be used towards fresh loans. Of this, 75 per cent will be used for lending or repayment of loans while 25 per cent will be utilised for general corporate purposes.” He added that the main lending thrust would be long-term funding for the manufacturing sector.
SBI Capital Markets, AK Capital Services, Edelweiss Financial Services and RR Investors Capital Services are the lead managers to the issue.
Net profit of IFCI, registered as Systematically Important Non-Deposit taking Non-Banking Finance Company (NBFC-ND-SI) with the RBI, stood at 17.22 per cent in FY’14.