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 one subsidiary abroad, in Britain, for catering to the European market.
“We would like to go on the Asian side (too). We will seek approval of the government for a second subsidiary, in Singapore,” said Chairman S K Goel. It could, he said, service project developers stationed in Asia.
The creation of the UK subsidiary had been announced by Finance Minister
P Chidambaram 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 the foreign exchange reserves from RBI and lends to Indian infrastructure companies for import of capital equipment and machinery.
Goel said the cost of setting up a Singapore subsidiary would not be much, as just two or three people would be enough to run it. The company will have to meet the capital requirement norms prescribed by the regulator. “We have discussed the issue at the appropriate level. A formal plan will be made soon,” he said.
The IIFCL chief said the UK subsidiary was doing well, but there was a need to tap the Asian market, too. Around 90 proposals for a loan request of around $10 billion were received up to March 2012 by IIFCL (UK), of which 38, with a loan total of $4 billion, had been approved.
IIFCL (UK) was incorporated in London in February 2008, to lend to Indian firms implementing infra projects in India or to co-finance their external commercial borrowing for such projects, solely for capital expenditure outside India. The paid-up capital is the equivalent of $50 million.
