The India Infrastructure Finance Company Ltd (IIFCL) is planning to have a subsidiary in Singapore to raise resources from the Asian market. The state-run lending institution currently has an overseas subsidiary in the UK for catering to the European market.
“We would like to go on Asian side because Europe is being covered by the UK subsidiary. We will seek the approval of the government for a second subsidiary in Singapore,” said IIFCL Chairman SK Goel. He said some of the project developers are stationed in Asia and the proposed subsidiary can service them.
The creation of UK subsidiary was also announced by Finance Minister P Chidamabaram in his earlier stint while presenting Budget 2007-08. He had also persuaded the Reserve Bank of India (RBI) to give a line of credit to IIFCL (UK). The subsidiary borrows a part of foreign exchange reserves from the RBI and lends to Indian infrastructure companies for import of capital equipment and machinery.
Goel said the cost of setting up Singapore subsidiary would not be much as just two or three people would be enough to run it. He said the company would just have to meet the capital requirement norms prescribed by the regulator and could be set up in no time.
“We have discussed the issue at the appropriate level. A formal proposal will be made soon,” he said.
The IIFCL Chairman said the UK subsidiary was doing well but there was a need to tap the Asian market too. Around 90 proposals for loan request of around $10 billion were received up to March 2012 by IIFCL (UK), of which 38 proposals with a loan of $4 billion had been approved.
IIFCL (UK) was incorporated at London in February 2008 under the UK Companies Act, 1985 to lend to Indian companies implementing infrastructure projects in India, or to co-finance their External Commercial Borrowings for such projects, solely for the capital expenditure outside India. The authorised capital of company is $500 and the current paid up capital is $50 million.
