The department of financial services (DFS) has proposed the names of LIC and IIFCL as replacements for IDFC and IL&FS in the Delhi-Mumbai Industrial Corridor Development Corporation (DMICDC), the country’s multi-billion dollar urbanisation project.
However, the extent of their participation is yet to be finalised, said sources.
Currently, IDFC and IL&FS hold 51% stake in the project, which will be diluted in two parts. While 26% will be given to Japan in exchange of $4.5 billion of investment, the remaining 25% will be diluted to LIC, IIFCL and Hudco, if considered.
The Japanese investment of $4.5 billion in the project will be brought through two Japanese arms ?Japan Bank for International Cooperation (JBIC) and Japan International Cooperation Agency (JICA).
DMICDC is a special-purpose vehicle for implementing the ambitious $90-billion project for building industrial enclaves along the Delhi-Mumbai rail corridor, encompassing seven states ? Delhi, Uttar Pradesh, Haryana, Rajasthan, Gujarat, Maharashtra and Madhya Pradesh.
A senior official in the department of industrial policy and promotion (DIPP) said, “The cabinet committee on economic affairs will soon clear the proposal where the Japanese government, LIC and IIFCL will take over the stake of IDFC and IL&FS in the DMIC project.”
Media reports had earlier highlighted that LIC and Hudco had shown keen interest in picking up the stake of IDFC and IL&FS in DMIC. “In the letter written to DIPP, DFS has named LIC and IIFCL. However, there are talks to consider Hudco, as it is also keen to pick up some stake,” added the official.
Last year in September, the Cabinet had cleared the decision to transfer 51% stake currently with IL&FS and IDFC in DMICDC to government-owned financial institutions. FE was the first to report that Japan will get a 26% stake in DMICDC. Subsequently, DIPP had circulated a fresh draft cabinet note, detailing the dilution of 51% of equity of DMICDC.