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A

Project Report

On

IFCI
(Industrial Financial Corporation of India)
Session (2007-09)

Submitted To:
Submitted By:

Mrs. Bhoomika Desai Mst. Sunny


Shinde
Faculty: Banking & Insurance. FYB/I Roll No.
A50

SIES (NERUL) COLLEGE OF ARTS,SCIENCE &


COMMERCE

Sri Chandrasekarandra Saraswathy Vidyapuram


Plot 1-C,Sector V,Nerul,Navu Mumbai-400706
CONTENTS

• About IFCI
• Liberalization Conversation into
Company
• IFCI is Economic Contribution
• Corporate Strategy
• Board of Directors
• Product & Services
• IT Services
• Strength and Experience
• Corporate Advisory
• Project Advisory & Finance
• IFCI Venture Capital Funds Ltd.
ABOUT IFCI

At the time of independence in 1947, India’s capital


market was relatively under-developed. Although there
was significant demand for new capital, there was a
dearth of providers. Merchant bankers and underwriting
firms were almost non-existent. And commercial banks
were not equipped to provide long-term industrial finance
in
any significant manner.

It is against this backdrop that the government


established The Industrial Finance Corporation of India
(IFCI) on July 1, 1948, as the first Development Financial
Institution in the country to cater to the long-term finance
needs of the industrial sector. The newlyestablished DFI
was provided access to low-cost funds through the
central bank’s Statutory Liquidity Ratio or SLR which in
turn enabled it to provide loans and advances to
corporate borrowers at concessional rates.
LIBERALISATION - CONVERSION
INTO COMPANY IN 1993

This arrangement continued until the early 1990s when it


was recognized that there was need for greater flexibility
to respond to the changing financial system. It was also
felt that IFCI should directly access the capital markets
for its funds needs. It is with this objective that the
constitution of IFCI was changed in 1993 from a statutory
corporation to a company under the Indian Companies
Act, 1956. Subsequently, the name of the company was
also changed to "IFCI Limited" with effect from October
1999.

FOCUS
IFCI has fulfilled its original mandate as a DFI by providing
long-term financial support to all segments of Indian
Industry. It has also been chiefly instrumental in
translating the Government’s development priorities into
reality. Until the establishment of ICICI in 1956 and IDBI
in 1964, IFCI remained solely responsible for
implementation of the

government’s industrial policy initiatives. Its contribution


to the modernization of Indian industry, export
promotion, import substitution, entrepreneurship
development, pollution control, energy conservation and
generation of both direct and indirect employment is
noteworthy. Some sectors that have directly benefited
from IFCI’s disbursals include:

• Consumer goods industry (textiles, paper, sugar);


• Service industries (hotels, hospitals);
• Basic industries (iron & steel, fertilizers, basic
chemicals,cement);
• Capital & intermediate goods industries (electronics,
synthetic fibers, synthetic plastics, miscellaneous
chemicals); and
• Infrastructure (power generation, telecom services).
IFCI's ECONOMIC CONTRIBUTION

IFCI’s economic contribution can be measured from the


following:

• Cumulatively, IFCI has sanctioned financial


assistance of Rs 462 billion to 5707 concerns and
disbursed Rs 444 billion since inception.

• In the process, IFCI has catalyzed investments worth


Rs 2,526 billion in the industrial and infrastructure
sectors.

• By way of illustration, IFCI’s assistance has been


helped create production capacities of :

· 6.5 million spindles in the textile industry


· 7.2 million tons per annum (tpa) of sugar production
· 1.7 million tpa of paper and paper products
· 18.5 million tons tpa of fertilizers
· 59.3 million tpa of cement
· 30.2 million tpa of iron and steel
· 32.8 million tpa of petroleum refining
· 14,953 MW of electricity
· 22,106 hotel rooms
· 5,544 hospital beds
· 8 port projects, 66 telecom projects and 1 bridge
project.

• The direct employment generated as a result of its


financial assistance is estimated at almost 1 million
persons.

• IFCI has played a pivotal role in the regional


dispersal
of industry, 47% of IFCI’s assistance has gone to
2,172
units located in backward areas, helping to catalyse
investments worth over Rs1,206 billion.

• IFCI’s contribution to the Government exchequer by


way of taxes paid is estimated at Rs9 billion.

• IFCI has promoted Technical Consultancy


Organizations (TCOs), primarily in less developed
states to provide necessary services to the
promoters of small- and medium-sized industries in
collaboration with other banks and institutions.

• IFCI has also provided assistance to self-employed


youth and women entrepreneurs under its
Benevolent Reserve Fund (BRF) and the Interest
Differential Fund (IDF).

• IFCI has founded and developed prominent


institutions like:

• Management Development Institute (MDI) for


management training and development ICRA for
credit assessment rating

• Tourism Finance Corporation of India (TFCI) for


promotion of the hotel and tourism industry

• LIC Housing Finance Ltd.


• GIC Grih Vitta Ltd., and
• Bio-tech Consortium Ltd. (BCL).

• IFCI has also set up Chairs in reputed educational/


management institutions and universities. A major
contribution of IFCI has been in the early assistance
provided by it to some of today’s leading Indian
entrepreneurs who may not have been able to start
their enterprises or expand without the initial support
from IFCI.

CORPORATE STRATEGY
IFCI has been able to achieve a financial turnaround
with the consistent support and cooperation of all its
stakeholders and is now endeavouring to re-position
itself .

As a part of its organizational strategy, IFCI plans to


induct strategic investor(s) who may provide
besides funds support, business know-how,
marketing techniques, technology, clientele, brand
name etc. to achieve scale and scope economies
and provide expansion of the capital and resources
base. In the interim period, IFCI plans to enhance
organizational value through better realization of its
Non-performing Assets (NPAs) and unlocking of
value of its investment port-folio including unquoted
investments as well as real estate assets.
The present business strategy of IFCI envisages (a)
retaining and enhancing its core competence in long
term lending to industrial and infrastructure sectors
and (b) expanding fee-based businesses to
capitalize opportunities in Corporate Advisory Services.

BOARD OF DIRECTORS

• Shri Atul Kumar Rai, , Chief Executive Officer &

Managing Director is B.A. (Hons.) Economics from

University of Delhi and hold postgraduate

qualification in Economics from Jawahar Lal Nehru

University. Shri Rai has rich experience of over 20

years and had held various posts in the Government

of India, including as Director in DDA, Banking

Division in Ministry of Finance. He is presently also

on the Board of Directors of Tourism Finance

Corporation of India Ltd., GIC Housing Finance Ltd.,

IFCI Financial Services Ltd., IFCI Venture Capital Fund


Ltd., Assets Care Enterprise Ltd., IIBI and Haldia

Petrochemicals Ltd

• Smt Sukriti Likhi nominee Govt. of India

• Shri R.C. Razdan, Chief General Manager in

IDBI Bank Ltd., is Post Graduate in Marketing

Management. He has rich experience of over 30

years in Commercial and Development Banking in

various capacities. He is IDBI nominee on the Board

of Bhandari Exports Ltd.

• Shri S. Ravi is a practicing Chartered

Accountant and founder member of Ravi Rajan &

Co. He is on the Board of Corporation Bank, IDBI

Capital Market Services Limited, Batiliboi Limited,

Mahindra Ugine Steel Co. Ltd., Spectrum Power

Generation Ltd. Gujarat Pipavav Port Ltd., LIC


Housing Finance Ltd, IDBI Home finance Limited,

Kudremukh Iron Ore Company Ltd., Hindustan

Aeronautics Ltd., Management Development Institute

(MDI), UTI Trustee Company Pvt. Ltd.

PRODUCTS AND SERVICES

AREAS OF OPERATIONS

The lending policies of IFCI have evolved over the last five
decades of operations. These policies have sought to
achieve the primary objective of providing medium and
long-term financial assistance to mainly manufacturing
concerns and to fulfill the overall goals of industrial and
economic development in India. The principal activities of
IFCI include:
· Project finance
· Financial services
· Non-project specific assistance
· Corporate Advisory Services

i. Project finance involves providing credit and other


facilities to green-field industrial projects (including
infrastructure projects) as well as to brown-field
projects,
viz., expansion, diversification and modernization of
existing industrial concerns through various types of
assistance that are tailored to the borrowers’ needs.

ii. Financial services covers a wide range of activities


wherein assistance is provided to existing concerns
through various schemes for the acquisition of assets,
as
part of their expansion, diversification and
modernization programs. These schemes are also
extended to equipment which could be directly got
fabricated by the actual user, or procured from
domestic
suppliers, or imported. Tailor-made schemes to suit the
individual borrower's requirements have been
designed
to provide quick funds after a need-based appraisal.
The
interest rate and rentals (in case of equipment leasing)
are competitive and determined on the basis of the risk
perception about individual concerns.

iii. Non-project specific assistance is provided mainly in


the
form of corporate / short-term loans, working capital,
bills discounting, etc to meet expenditure, which is not
specifically related to any particular project.

IT SERVICES
IFCI has been evolving over the years to meet the needs
of its customers and has been taking the help of
technology to move forward. With this aim IFCI set up its
full-fledged IT department in the year 1985. The core
team of professionals in the department has helped IFCI
adapt to various technologies and enabled IFCI to become
one of the top 100 IT Users in the country (MIS Dec. 99).
With this vast in-house experience, IFCI has now started
providing total IT solutions to various Business
Houses/Financial Institutions and also its Subsidiaries &
Associates.

MISSION
To be among the leading IT solution providers in the
country. To share the expertise gained in operation and
continue to develop new competencies in emerging
technologies so as to come up with mutually beneficial
solution to customers.

GOAL
• To provide innovative and cost effective solutions to
clients with a blend of traditional and latest
technologies maximising value at the least cost..
• To provide maximum service at least cost and
shorter turnaround times.
• To develop long term relationship with our clients
OUR TEAM
IFCI's strength has always been its People and the
convergence of their minds. They are highly skilled
developers comprising Software Technologists, Finance &
Domain Specialists, selected with great care and located
over 12 offices of the Company all over the country. They
are dedicated Software Specialists, fully equipped to
provide total support to the customers.

STRENGTHS AND EXPERTISE


Over the years IFCI's IT Group has gained considerable
knowledge and expertise in the following areas in IT
domain as well as in the financial domain being part of
the premier financial Institution · Complete IT solutions
using state-of-the-art technologies for multifaceted
business environments.
• Complete IT strategy planning for large
geographically
dispersed organisations.
• Web-enabling of applications for
users/customers/citizens direct access to the
information.
• Application Systems suitable for
financial/manufacturing sector using latest
technologies.
• Planning of Computing Environment, Sizing of
Hardware
• Evaluation and Selection of Database Engines
• Creation of LAN of computers.
• WIDE Area Networking of Computer Systems (WAN),
Virtual Private Networking (VPN) Structured Cabling
Systems.
• Operations Management, LAN, WAN & ORACLE
Database (DBA) Administration.
• Knowledge Management Migration from client server
computing to server based computing through
• CITRIX Metaframe Software - Installation &
Administration
• Setting up of Corporate email facility, post-office
protocols - Installation & Administration.
• Web Designing, Administering Servers & Installation.

CORPORATE ADVISORY
With its traditional core competence in project finance,
and coupled with its expanding expertise in investment
banking and corporate finance & advisory services, IFCI
aims to be a provider of total financial solutions for any
aspiring or existing business entity. With its traditional
core competence in project
finance, and coupled with its expanding expertise in
investment banking and corporate finance & advisory
services, IFCI aims to be a provider of total financial
solutions for any aspiring or existing business entity.

PROJECT ADVISORY & FINANCE


At a time when India is throwing up investment avenues
in newer sectors and projects, there is a critical need to
provide specialized advisory services to the Indian
Corporate Sector in their efforts towards Industrial
Advancement.As a catalyst of Industrial growth, IFCI
provides the following project Advisory Services:

• Investment appraisal of Navratna (most valued


public
Sector companies) Companies

• Project Conceptualization and related services,


including Guidance in relation to Selection of
Projects, Preparation of feasibility studies, DPR,
Capital Structuring, Techno economic Feasibility,
Financial Engineering, Project Management Design
etc.

• Credit Syndication including preparation of


Information Memorandum, Syndication of
domestic/foreign loans, post sanction Follow-up,
assistance in Legal Documentation etc

INFRASTRUCTURE ADVISORY

Assets available for Sale


Where Sale Notices have been issued
(i) by Official Liquidator
(ii) by Recovery Officer
(iii) Under Securitisation Act 2002
(iv) by other Institutions

Where
(i) Recovery Certificates have been issued By DRTs

(ii) Liquidation Proceeding is Pending

This section has two parts. Part A gives the names of


Companies where Sale Notices have been issued by the
Official Liquidators attached to the High Courts and / or
by the Recovery Officers attached to Debt Recovery
Tribunals (DRTs) and / or under Securitisation Act 2002.
Part B gives the names of cases where execution
proceedings before Recovery Officers of DRTs are
pending and/or cases where liquidation proceedings
before Official Liquidators attached to High Courts are on.
To peruse the notices published in respect of cases of
Part-A and to get the details of Company Profile in
respect of cases of Part– B, interested buyers may click
the name of the 'Company' listed below.

IFCI VENTURE CAPITAL FUNDS


LTD.
(IVCF)
IFCI Venture Capital Funds Ltd. (IVCF) was originally set
up by IFCI as a Society by the name of Risk Capital
Foundation (RCF) in 1975 to provide institutional support
to first generation professionals and technocrats setting
up their own ventures in the medium scale sector, under
the Risk Capital Scheme. In 1988, RCF was converted
into a company, Risk Capital and Technology Finance
Corporation Ltd. (RCTC), when it also introduced the
Technology Finance and Development Scheme for
financing development and commercialisation of
indigenous technology. To reflect the shift in the
company’s activities, the name of RCTC was changed to
IFCI Venture Capital Funds Ltd. (IVCF) in February 2000.
Over the years, IVCF has provided financial assistance to
new ventures, supported commercialisation of new
technologies.