More Stories

Informist, Wednesday, May 21, 2025

 

--Govt source: Plan to sell 10% stake in IIFCL via IPO, seeking Cabinet Ok

--Govt source: May raise INR 35 bln-INR 40 bln via 10% stake sale in IIFCL

--Govt source:IIFCL may issue fresh shrs in IPO, raise INR 35 bln-INR 40 bln

--Govt source: IIFCL initial public offering likely by Oct-Nov

 

By Priyasmita Dutta and Sagar Sen

 

NEW DELHI – The finance ministry has moved a Cabinet note seeking approval for the initial public offering of India Infrastructure Finance Co. Ltd., a senior government official aware of the development said. Through the public offer, the government aims to divest up to 10% stake in IIFCL while the company may also issue fresh shares, the official told Informist.

 

"In total, the IPO may be worth INR 70 billion-INR 80 billion, out of which the government may get INR 35 billion-INR 40 billion for (selling) their stake in the company," the official said. The board of the state-owned infrastructure financier had approved the proposal for the company to go public in January. IIFCL, which is wholly-owned by the government, was set up in 2006 to provide long-term financial assistance to infrastructure projects.

 

The authorised and paid up capital of the company was INR 100 billion and INR 99.999 billion, respectively, as of Mar. 31. The face value of a share of the infrastructure financier is INR 10. The main mandate of the company is to finance both green-field and brown-field projects, through direct lending, takeout finance, refinance, and credit enhancement, across all infrastructure sectors. The wholly-owned public sector undertaking had a debt-to-equity ratio of 3.88 at the end of 2024-25 (Apr-Mar).

 

According to the official, the Cabinet may take around two months to clear the note as the current political situation after strike on terror targets in Pakistan may push non-critical issues to the backburner. After the Cabinet clears the proposal, IIFCL will press the accelerator on its listing plans, the government official said. "Once Cabinet approval is in place, the onus is on the company and its management to get the listing done successfully," the official said.

 

After the Cabinet nod, the company will appoint merchant bankers for the IPO. Then the IPO structure will be finalised and the due diligence ensuring compliance with regulations governing IPOs will be completed, the official said. "The merchant banker will be selected soon for filing draft red herring prospectus before the Securities and Exchange Board of India," the official said.

 

The company is hoping the entire process will be completed by September end, so that the IPO can be launched by Oct-Nov, the official added. IIFCL did not respond to an email asking for confirmation as well as further details.

 

IIFCL had reported a net profit of INR 21.65 billion for FY25, up 39% on year, driven by disbursements which rose 27% on year to INR 285 billion. Its net worth was INR 163.95 billion at the end of FY25, up from INR 142.66 billion a year ago. On Monday, Department of Financial Services Secretary M. Nagaraju chaired a review meeting with IIFCL, where he advised the company to diversify its portfolio further. 

 

The company's net non-performing asset ratio was 0.35% at the end of March, down from 0.46% last year. The gross NPA ratio was 1.11% at the end of FY25, down from 1.61% a year ago. Its total loan book at the end of FY25 was INR 681.25 billion, with net non-performing assets of INR 2.38 billion.

 

In the last six years, the government has listed seven public sector companies on bourses, leading to disinvestment receipts of INR 253 billion. Out of this, the government raised INR 205 billion from the 3.5% stake sale in Life Insurance Corp. of India at the time of listing in FY23. In the infrastructure sector, the government had listed Indian Renewable Energy Development Agency Ltd. in FY24, raising around INR 8.6 billion from a 10% stake sale. Prior to that, in FY21, the government had listed Indian Railway Finance Corp. and raised INR 15.41 billion by selling 4.55% stake.

 

IREDA shares were listed on stock exchanges at INR 50 and at 1141 IST, shares traded at INR 172.20 on the National Stock Exchange, up 1.6% from the previous close. IRFC's shares were listed at INR 24.9 and at 1145 IST, they traded at INR 137.96, almost flat from the previous close.

 

In the current fiscal, the government aims to raise INR 470 billion from divestment of its stake in PSUs and from asset monetisation. So far, it has received INR 36.73 billion by offloading stakes in Mazagon Dock Shipbuilders Ltd.  End

 

Edited by Akul Nishant Akhoury

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.