IFCI to invite bids for stake sale by mid-Aug

IFCI, the country's oldest financial institution, will invite expression of interest (EoI) from strategic investors in the middle of this month to sell 26 per cent stake in the company.

The board, which met on Saturday, approved the draft report submitted by consultant Ernst & Young, on induction of a strategic investor to revive the business of the financial institution.

"Expression of interest will be invited in the middle of this month and the process will culminate in 4-6 months," an IFCI source said.

Based on the EoIs, the company would shortlist investors and issue request for proposal by October. The strategic investor induction process is likely to be completed by January 2008. IFCI, which was in red since 2000, recorded a net profit of Rs 898 crore in 2006-07.

The company has also began lending money in a small way in 2006-07. It lent Rs 1,000 crore to top corporates in 2006-07 and expects to disburse Rs 2,500 crore in the current financial year.

IFCI may go for a partner that brings in money as well as new product strategy to position it as a viable business proposition in the long-term.

It has made provisions for entire non-performing assets (NPAs) and net NPAs stood at zero as of March 2007. The company's accumulated losses stood at Rs 4,600 crore till March 31, 2006.

Shareholding in IFCI is widely dispersed. LIC holds 8.4 per cent while IDBI holds 5.01 per cent stake in IFCI.