IFCI likely to induct strategic investor

The IFCI stock has been buzzing on the back of reports of the likely induction of a strategic investor and speculation over the value of its investment book, reports CNBC-TV18.

FCI stock is up 200% in 2 months. Analysts observe that it is driven by speculation on value of investment book. IFCI has a negative net worth of around Rs 3,200 cr.

Government is proposing to induct a strategic investor. It could be a foreign or a local bank.

A change in strategy is under way after failed merger attempts.

The book value of IFCI’s quoted investments is Rs 697 cr as of March 2006. The market value of quoted investments is estimated at Rs 2,800-3,500 cr. The book value of unquoted investments is Rs 2,311.36 cr.

IFCI has holdings in SHCIL, DFHI, NSE, OTCEI & LIC Housing Finance. It is to sell its 21% holding in ICRA through IPO.

IFCI’s incremental lending is at Rs 1000 cr and its only to blue chips. Its net NPA is down to Rs 66 cr (0.9%). IFCI is to improve balance sheet then look at further lending.

IFCI’s cost of funds is at 6% and its rise in NIMs is by 50 bps (around 3%).

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Source : moneycontrol