First Leasing Company of India (FLCI), the first company incorporated for leasing business in the country, has said it has sold CARE shares during the last fiscal for Rs 54 crore. The company had invested around Rs 25 lakh in CARE.
The company has achieved a cash profit of Rs 105.47 crore during the year ended March 31, 2011 as compared to Rs 77.65 crore last year, an increase of 35.82 per cent. The profit after tax rose 103 per cent.
Senior company executive said the unprecedented profit was a result of the successful sale of CARE shares for Rs 54 crore, which First Leasing bought around 18 years ago for Rs 25 lakh. This represents non-recurring income, he said on the sidelines of the company AGM.
The company stated in its annual report that it had completed the sale although market speculation suggested CARE shares prices could climb higher. In doing so, FLCI saved itself Rs 13 crore from the fall in the share value over the following three months, it stated.
The 37-year-old NBFC ruled out speculations that promoters are likely to dilute their shares in the company. FLCI managing director Farouk M Irani said, “We don't comment on speculative rumours”.
At present, promoters are holding 27.28 per cent in the company, of which A C Muthiah holds 164,223 shares (0.72 per cent of the total paid up capital), according to company's 2010-11 annual report.
Asked whether the company would look at applying for banking licence, Irani said, “We are basically corporate finance organisation and we have developed that skill and continue to focus on this only. Banks are more towards financial inclusion system.”
The company's product range includes lease (short-term and long-term), operating leases, sale and leaseback, hire purchase, consumer credit, inter corporate deposit and fixed deposits. The company also provides services like syndication, securitization and debt placement.
