An established NBFC
Providing financial support
for the diversified growth of
industries across the
South-East Asian Crisis
Loans started becoming
NPA, Profitability became
negative due to crisis
NBFC status by RBI
Non-deposit taking NBFC,
Zero NPA by 2008 and
Conversion into Company
IFCI was restructured and incorporated as
company from Statutory Corporation & got
listed in Stock Exchange
IFCI Ltd. Journey
Started Treasury Operations &
entered new segments like
Govt. of India became major
First development Financial Institution
Restructuring of IFCI
NPA at it’s Peak,
Resolution passed for Foreign
holding upto 74%
• Issued IPO
• Started investing in greenfield
• South-East Asian Financial Crisis
• Loans turning NPA
• Govt. of India bailed out for
• Merger with PNB ruled out by
• IDBI not keen on taking over
IFCI Ltd. Downfall
IFCI Ltd (IFCI) was set up as a Statutory Corporation in 1948 for providing medium and long term finance to industry.
In 1993 it was reconstituted as a company. IFCI is also registered with the Reserve Bank of India (RBI) as a Systemically Important Non-
Deposit taking Non-Banking Finance Company.
• Agro-based Industry (Textiles , Sugar)
• Service Industry (Hotels , Hospitals)
• Iron & Steel Industry
• Chemical & Cement
Sectors by IFCI
IFCI Ltd. Operations
IFCI Ltd. Restructuring
•Incorporated Assets Care Enterprise to deal with NPAs
•Internally 3 assets reconstruction groups were formed :
•NPL Group 1 : > 1 Mn $
•NPL Group 2 : < 1 Mn $
•NPL Group 3 : Deals with sales of Assets
•Attract New Capital and Owners
•Support from IDBI & SBI in form of Plain debt only
• Implementation of Technology
• Reduction in Manpower ( VRS plan introduced )
• Focusing on SME sector lending
• Assets Improvement & Re-organization ( Diversify into non-project finance activities such Advisory Services , Investment
Banking factoring business & real estate
• Incorporation of KPA ( Performance based incentives )
• Training for employees – Business school set up
•IFCI repaid entire amount it had borrowed in Foreign Currency from Asian Development Bank
•IFCI also repaid the deposits from the public
IFCI went for restructuring , following McKinsey & Co. recommendation during 2004-06.
IFCI Ltd. Performance
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Net Profit YOY (Amt. in Crs.) IFCI started incurring losses and it was feared that it
might slip into bankruptcy in 2004. However, the
decision of the board of directors to restructure IFCI
and the able leadership of the then CEO turned IFCI
around and put it back on the path to growth.
The story did not end there; the path ahead for IFCI
was full of difficulties and challenges as IFCI had to
endeavor to get a good credit rating so as to access
low-cost funds necessary for its survival.
Inspite of recurring losses and due to proper
restructure planning and execution during 2004-
2006 and 2 years of gap in operation IFCI Ltd. came
back strongly & became profitable 2007 onward.
Data source : Moneycontrol.com
IFCI Ltd. Journey
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