IDFC in race for IFCI's 26% stake

Infrastructure Development Finance Company (IDFC), an investor in public works, is interested in IFCI, competing with the Blackstone Group and General Electric Capital Corporation for a stake in the state-run project financier.

"We are busy doing the due diligence,'' IDFC Chief Executive Officer Rajiv Lall said in Mumbai today. "We have yet to decide,'' he added.

The winner of the 26 per cent IFCI stake will gain access to a market where lending grew 28 per cent last year, and where the central bank limits foreign banks' ownership of local private rivals to 5 per cent. IFCI, bailed out by the government in 2003 because of bad debts, in July announced plans to sell stake to a local or overseas investor to bolster its capital

Other bidders including a group led by billionaire Wilbur Ross and comprising the Goldman Sachs Group, Standard Chartered and HDFC, were vying with Cargill Financial Services Corporation, Natixis and Newbridge Asia for the stake, IFCI said last month.

IFCI, the best-performing stock on the BSE 500 Index this year, will finance some of the $475 billion of roads, ports and power stations the government wants built by 2012. The potential returns spurred Blackstone, Citigroup and the 3i Group to start infrastructure funds this year.

IDFC is partnering Blackstone and Citigroup for a $5 billion infrastructure fund in India.