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IFCI Ltd..pptx

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IFCI Ltd..pptx

  1. 1. IFCI Ltd. Journey PGCSM 2022-23 IFCI Ltd. Downfall – Survival – Turn Around
  2. 2. IFCI Ltd. Agenda PGCSM 2022-23 IFCI Journey IFCI Operations & Downfall Restructuring Financial Performance Conclusion
  3. 3. 1948 1993 1997 2004- 2006 2022 An established NBFC Providing financial support for the diversified growth of industries across the spectrum South-East Asian Crisis Loans started becoming NPA, Profitability became negative due to crisis Establishment NBFC status by RBI Systematically Important Non-deposit taking NBFC, Zero NPA by 2008 and became Profitable Conversion into Company IFCI was restructured and incorporated as company from Statutory Corporation & got listed in Stock Exchange IFCI Ltd. Journey 2011- 2013 Expansion Started Treasury Operations & entered new segments like Security market, Govt. of India became major shareholder First development Financial Institution 2007 Restructuring of IFCI NPA at it’s Peak, Resolution passed for Foreign holding upto 74% PGCSM 2022-23
  4. 4. 1993 • Issued IPO • Started investing in greenfield projects 1997 • South-East Asian Financial Crisis • Loans turning NPA 1998-2004 • Govt. of India bailed out for Liquidation • Merger with PNB ruled out by Shareholders • IDBI not keen on taking over IFCI IFCI Ltd. Downfall PGCSM 2022-23 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 • Fertilizers • Chemical & Cement Directly Benefited Sectors by IFCI IFCI Ltd. Operations
  5. 5. IFCI Ltd. Restructuring PGCSM 2022-23 Financial 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 Recapitalization •Attract New Capital and Owners •Support from IDBI & SBI in form of Plain debt only Organisational Restructuring • 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 Repayment of Loans •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.
  6. 6. IFCI Ltd. Performance PGCSM 2022-23 370.5 23.5 59.37 -265.93 -884.7 -259.7 -3229.78 -443.4 -74.1 898.02 1020.57 657.15 670.94 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
  7. 7. IFCI Ltd. Journey PGCSM 2022-23 Thank you Presented By Anish Raj Shreya Shrivastava Suman Karmakar

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