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IFCI jumps to 52-week high. Mega Block Deals

May 4, 2007

The IFCI stock surged to Rs 50 in intra-day trade, a 52-week high for the counter.

On the back of recoveries and sale of investments, the Industrial Finance Corporation of India (IFCI) reported a net profit of Rs 644.12 crore for the fourth quarter ended March 2007, against a loss of Rs 105.11 crore, in the corresponding period a year ago.

For the fiscal ended March 2007, IFCI’s net profit stood at Rs 898 crore compared to a loss of Rs 74 crore, a year ago.

While operational income for the quarter ended March 2007 rose by 40% to Rs 1052.62 crore (Rs 748.68 crore), other income for the quarter increased by 40% to Rs 41.47 crore (Rs 29.61 crore). The financial institution (FI) saw a huge dip in total expenditure from Rs 883.32 crore to Rs 86.82 crore on the back of reversal of provisioning.

The FI earned around Rs 730 crore through the sale of its stake in the National Stock Exchange and another Rs 60 crore through the sale of stake in ICRA. IFCI still has a 5.5% stake in NSE, which is valued at Rs 550 crore. The book value of its investments is at around Rs 1000 crore while the market value of these investments are more than Rs 2000 crore.

IFCI chief executive officer RM Malla said, “We have focused our attention on recoveries, reducing the cost of our borrowings and unlocking the value of our investments. The net NPAs have now been reduced to zero, while gross NPAs are now at Rs 6500 crore. All future recoveries will go straight to the bottomline. The accumulated losses eased from Rs 4800 crore to Rs 800 crore. This financial year, there was NPA resolution of over Rs 1000 crore. The state-run financial instituion also paid back liabilities of Rs 900 crore in the year, reducing them to Rs 13,000 crore.”

In three separate block deals on the NSE, about 3.88 crore IFCI shares were purchased by Clean Finance & Investment, Jaypee Capital Services and Latin Manharlal Securities, respectively. About 10.76 crore shares changed hands on NSE’s counter on that day.

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