IDFC to raise Rs2,000-cr from institutions to bring foreign holding below 50%

Infrastructure Development Finance Company (IDFC) on Wednesday announced plans to raise Rs2,000 crore by issue of equity shares through a qualified institutional placement (QIP) or a further public offer (FPO), in order to comply with RBI guidelines of keeping foreign shareholding in banks below 50 per cent.

IDFC, which is one of the two to bodies receive a bank licence in the Reserve Bank of India's latest licensing round early this year, is currently 53.69 per cent foreign owned against the 49 per cent prescribed for banks in the RBI guidelines.

IDFC and Bandhan Financial Services Pvt Ltd emerged successful out of about 25 contenders for new bank licences issued by the Reserve Bank of India (RBI) in April (See: RBI grants 'in-principle' nod for bank licences to IDFC, Bandhan). As per the existing regulations, the bank has to be floated by a domestic entity and should not have foreign stake of 50 per cent or

''As on March 31, 2014, the aggregate foreign shareholding in IDFC was approximately 53.69 per cent. To achieve reduction of the foreign shareholding below 50 per cent, the company proposes to offer, issue and allot, in one or more tranches, securities, through one or more domestic offering(s), including through further public offering (FPO) and / or qualified institutional placement (QIP), to qualified institutional buyers (QIBs) and / or other Indian persons for an amount not exceeding Rs2,000 crore,'' IDFC said in its filing with the Bombay Stock Exchange.

IDFC Ltd plans to start banking operations by October next year, reports quoted its chairman Rajiv Lall as saying last week.

IDFC recorded a 51-per cent drop in net profit at Rs257.94 crore in the quarter ended 31 March compared to Rs525.70 crore in the same quarter in 2012-13, while total income rose marginally to Rs2,219.57 crore from Rs2,218.41 crore. For the full 2013-14 fiscal, IDFC reported a 1.82 per cent drop in net profit to Rs1,802.68 crore from Rs1,836.20 in 2012-13.

Total income increased to Rs8,789.99 crore in 2013-14 from Rs8,148.42 crore in the previous fiscal. On a standalone basis, net profit more than halved to Rs213.04 crore during the January-March quarter of 2013-14 as against Rs451.04 crore in the year-ago period. For the entire fiscal, standalone net profit fell 3.62 per cent to Rs1,701.12 crore compared to Rs1,764.98 crore for 2012-13.