Industrial Finance Corporation of India (IFCI) has decided to hike its authorised capital by Rs 1,500 crore to Rs 3,000 crore by issuing rights and preference shares issue. IFCI has decided to raise the capital at par by issuing 150 crore equity shares and 150 crore of preference shares.
According to the annual report for 1998-99, the IFCI plans to issue preference shares aggregating Rs 1,000 crore. The annual report says that IFCI board would consider to offer 100 crore preference shares of the face value of Rs 10 each to bondholders, employees, banks, insurance companies, financial institutions mutual funds and so on.
The planned authorised capital of Rs 3,000 crore would include 150 crore equity shares at Rs 10 and preference share of 150 crore shares at Rs 10 each. The present authorised capital share is Rs 1,500 crore which includes 100 crore equity and 50 crore cumulative redeemable preference share of Rs 10 each.
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In case of the rights issue, IFCI has received clearance from the Securities and Exchange Board of India to raise rights issue one is to one share of Rs 357 crore at Rs 10 per share. The issue is likely to enter the capital market in this fiscal, said P V Narasimhan, chairman and managing director of IFCI. This would beef up the capital adequacy ratio 9.1 per cent from 8.37 per cent in march 1998-99.
Meanwhile, IFCI is planning to entering raise deposits from the retail market and provide working capital to the turn of Rs 1,000 crore in this fiscal. "The institution would position itself as a universal bank whereby we would borrow from the retail market and lend to the corporate," said Narasimhan.