Industrial Finance Corporation of India (IFCI) plans to raise another Rs 4,000 crore by way of debt by the end of 1998-99 to meet its financing requirements for the year. IFCI would begin raising the funds from after October.
For that purpose, the financial institution is filing an umbrella prospectus with the Securities and Exchange Board of India (Sebi) for raising the funds. In an exclusive interview with Business Standard, P V Narasimham, the newly appointed IFCI chairman said about eight or nine instruments would be listed in the prospectus, of which the
institution would choose about three or four to raise the money with.
"The details would be drawn up much closer to the time of issue", Narasimham said. Both a public issue of bonds and private placements are being considered as options to raise the money.
IFCI, he said, had already raised close to Rs 2,000 crore this fiscal, including money in foreign exchange.
The institution has a target of disbursements of about Rs 7,500 crore, up from last year's disbursements of Rs 5,700 crore.
This would include guarantees. After accounting for debt repayment and internal generations, the institution would require Rs 6,000 crore for the full year. The timing of the fund raising exercise, he said, would be decided after the first half results of IFCI are made public.
"The coupon rates are rather volatile now. We will assess the situation and may even hold back for some time if necessary before entering the market again", he said. Narasimham said next fiscal onwards, the institution would provide audited quarterly results as well.
IFCI's forex requirement for the year has been pegged at under Rs 1000 crore, of which Rs 600-700 crore is in cash.
"This is because there is a perceptible shift in demand from foreign currency to the rupee", the IFCI chairman pointed out.
Narasimham was in Calcutta on a day-long trip to meet IFCI clients and also met members of the Confederation of Indian Industry (Eastern Region) during his stay. Commenting on the restructuring of IFCI to stay tuned to the times, Narasimham said the Arthur Andersen report on the institution was already being implemented in terms of laying down the systems for credit delivery, monitoring and policies.
"The financial system itself is changing, and so are the norms. While at times there is a preference for high equity and low debt, the reverse becomes true when the equity markets are in a slump. This dynamism has to be recognised," Narasimham said.
