War And Peace Over IDFC

New Delhi, Mumbai, March 23 | Updated: Mar 24 2004, 05:30am hrs
Having declared ceasefire in the battle between Infrastructure Development Finance Company (IDFC) and the Union government, the Union finance ministry has set up a peace committee with warring generals from both sides and peacekeepers on it. Chaired by American International Groups (AIG) India chief Sunil Mehta, the committee includes IDFC chairman Deepak S Parekh, SBI chairman AK Purwar and additional secretary (banking) Vinod Rai. The committee is expected to come up with its peace proposals very soon, according to senior finmin officials.

A senior finance ministry official said no major decision will be taken on IDFC before the report is out. Though there has been plenty of speculation on the issue, no movement will happen on the IDFC front until the report is out. We are awaiting the committee report, said the official.

The official added that a decision will be taken on whether or not to accept the resignations of the top management officials which include IDFC managing director Nasser Munjee.

Meanwhile, Mr Rai, speaking to FE said IDFC has proposed to launch an initial public offer (IPO). It is just a proposal from the company. However, it will take about five to six months before it actually materialises, he said. Mr Rai added that it has been agreed upon that the Reserve Bank of India (RBI) will transfer its 15 per cent stake in the company to the government. After the exit of RBI, the path for IPO will be clear, Mr Rai said. Industry sources say the IPO is expected to raise about Rs 400 to 500 crore.

The IDFC has said that its initial aim of putting a strong policy framework public private partnership to ensure private sector fund flows to multiple infrastructure projects across the sector has been successful. Funding projects has been our secondary operation. The primary aim is to prepare the policy framework, said an official at IDFC. The companys total disbursement by the end of this financial year is likely to touch Rs 2,500 crore.