| The successful bidder will first buy 26 per cent and then another 20 per cent from the minority shareholders through an open offer. Nearly a dozen institutions now hold 34.8 per cent stake in IFCI. This includes Life Insurance Corporation of India's 8.4 per cent shareholding and Industrial Development Bank of India's 5.01 per cent. |
| General Electric Capital Corporation, Cargill Financial Services Corporation, the Blackstone Group and Kotak Mahindra Bank are among the 10 bidders. Kotak Mahindra Bank has put in a solo bid, but sources close to the sale said the bank might go for induction of partner later. Industry sources said Sterlite's attempt to buy stake in IFCI was meant at getting into the world of finance. "Sterlite has Rs 15,000 crore-plus treasury operations. |
| The IFCI board will meet on September 20 to discuss the recommendations of advisor Ernst and Young for short-listing eligible investors. The names will be announced on September 25. Before calling for bids in mid-October, the company will have a pre-bid conference with the selected investors. The selection of strategic investor is likely to be over by January-end, 2008. |
| At the current market capitalisation of around Rs 5,000 crore, 26 per cent stake may bring in Rs 1,300 crore capital to the company. Currently, there is an asset-liability mismatch of Rs 3,000 crore in the balance sheet of IFCI, which it will try to make up to some extent by the stake sale. |
| "We are looking for at strategic fit. Price is thereafter," said Atul Kumar Rai, Chief Executive Officer of IFCI. |
| IFCI, which came out of red in 2006-07, will be developing a new business model to revive business. It will no longer be a pure long-term lender. Besides diversifying business, IFCI may take equity stake in projects it finances, IFCI's large exposure to project finance, real estate assets and a thriving market for non-performing assets in the country had attracted many domestic as well as foreign institutions. In The Queue |
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