IDFC plans Rs 2,000-crore issue to cut foreign holding to below 50%

Written by fe Bureau | Mumbai | Updated: Jul 3 2014, 13:35pm hrs
Infrastructure financing firm IDFC on Wednesday said that it is looking to raise R2,000 crore by issue of equity shares through a qualified institutional placement (QIP) or a further public offering (FPO), to reduce foreign shareholding below 50% to comply with RBI bank licence guidelines.

As on March 31, 2014, the aggregate foreign shareholding in IDFC was approximately 53.69%. To achieve reduction of the foreign shareholding below 50%, 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 R2,000 crore, IDFC said in its filing with the Bombay Stock Exchange.

Earlier in June, Sunil Kakkar, chief financial officer of the company, had told FE that IDFC is looking to raise equity capital worth 8% of the total shares. Kakkar also said that IDFC is looking at insurance companies and mutual fund houses to pick up the stake. The total number of shares of IDFC as on March 31 stands at 151 crore and IDFCs share price was up 0.04% to R135.45 on Wednesdays close.

IDFC also said it is looking to raise R80,000 crore through issue of non-convertible debentures and commercial papers through the private placement route. IDFC has historically been one of the largest issuers of NCDs via private placements and, according to Prime Database, it was one of the top 10 mobilisers of debt and issued bonds worth R11,329.20 crore in 2012-13.

The fiscal year 2013-14 witnessed a mobilisation through corporate bonds on private placement basis of R2,70,946 crore, a fall of 23% from a year ago. This was mobilised by 245 institutions and corporates, Prime Database said. The highest mobilisation through debt private placements during the period was by PFC (R24,698 crore) followed by HDFC (R24,269 crore), REC (R24,253 crore), LIC Housing Finance (R20,850 crore) and Exim Bank (R10,461 crore).