Premium Essay

Ifci

In: Business and Management

Submitted By skhan60
Words 514
Pages 3
Brief Overview of the IFCI case

The Industrial Corporation of India (IFCI) was the first development financial institution (DFI) in India, and it was founded in 1948. The IFCI contributed greatly to the enhancement of Indian industry by providing loans. In fact, they were designed to provide medium and long term financing to large-scale business. IFCI have assisted more than 6000 firms and it helped developing key sectors such as sugar and textile cooperative. They also created direct and indirect employment for over 1m people.

The position of IFCI took and well as their competitors changed radically with the introduction of the new economic policy (NEP). The new policy promoted privatization, globalization, and abolition of the industrial licensing and the removal of monopolies. That allowed the entry of private sectors, which of course increased competition for DFI such as IFCI. The Industrial Corporation of India was then restructured and incorporated as a company in July 1, 1993. Hence, that move allowed them to make debut in the capital market in December 1993 with an IPO of US$ 0.80$.

Following the IPO, the company started a rapid expansion program, which included borrowing from the debt market at high interest rate and the leverage of high yielding loan assets to cover up the cost of borrowing. On the other hand, employee knowledge was not being updated and they lacked the managerial skills to keep up with fast growing environment. As a result, they broken down under pressure and cleared applicant’s file without proper due diligence. The lack of due diligence when clearing up file contributed to bad loans, or in other words non-performing assets (NPA). IFCI’s non-performing assets rose to 8.26% in 1997 to 20.7% in 2000. In addition, they ended up lending money to 396 “sick” units with outstanding debts totaling over $300 million. Following the…...

Similar Documents

Premium Essay

Institutional Borrowings

...20 Role of Specialised Financial Institutions 20.1 Introduction In the previous lesson you have learnt that companies raise long-term and medium-term finance by issuing shares and debentures. Specialised financial institutions are also an important source of such finance. In this lesson, we shall discuss the role and functions of specialised financial institutions. 20.2 Objectives After studying this lesson, you will be able to :- l explain the need for and importance of specialised financial institutions; l identify the types of such institutions; l describe the functions and objectives of Industrial Finance Corporation of India (IFCI) and State Financial Corporations (SFCs); l discuss the role and objectives of Industrial Development Bank of India (IDBI); l state the functions of IDBI; l Recall the meaning of ‘investment trust’; 56 :: Business Studies l discuss the objectives and function of Unit Trust of India (U.T.I.) ; l Explain the objectives of Industrial Credit and Investment Corporation of India (ICICI) ; l describe the functions of ICICI ; 20.3 Need for and importance of Specialised Financial Institutions (SFIs) SFIs are institutions set up mainly by the government for providing medium and long-term financial assistance to industry. As these institutions provide developmental finance, that is, finance for investment in fixed assets, they are also known as ‘development banks’ or ‘development financial institutions’. These institutions......

Words: 4866 - Pages: 20

Premium Essay

Venture Capital

...venture capital activity. Industrial Finance Corporation of India (IFCI) formed Risk Capital and Technology Finance Corporation (RCTC), with headquarters at New Delhi. TDICI is now known as ICICI Venture Funds Management Company Ltd. or ICICI Venture; and RCTC is now known as IFCI Venture Capital Funds Ltd. (IVCF). Their main focus is on development and commercialisation of viable indigenous, often, untried technologies. Almost at the same time, Credit Capital Venture Finance Limited was started in the private sector. This has mobilised funding from global funding agencies, with the joint sponsorship of Commonwealth Development Corporation, London (U.K.), Credit Capital Finance Corporation, Asian Development Bank (ADB), and Bank of India, a public sector bank in India. Government of India, in November 1988, announced the first venture capital guidelines in the Parliament. These guidelines provided venture financing of technology start-ups, promoted primarily by first generation entrepreneurs. Soon thereafter in 1989, four institutions were selected by the World Bank under its Industrial Technology Development Project to start venture capital activities in different parts of the country. ICICI at Mumbai, Gujarat Industrial Investment Corporation (GIIC) in Ahmedabad, Andhra Pradesh Industrial Development Corporation (APIDC) in Hyderabad, and 4 Canara Bank in Bangalore were selected under this scheme. IFCI at New Delhi, and Infrastructure Leasing and Financial Services......

Words: 7046 - Pages: 29

Premium Essay

Mehedi

...collecting cheques, bill of exchange, remittance money from one place to another place. In India, commercial banks are established under Companies Act, 1956. In 1969, 14 commercial banks were nationalised by Government of India. The policies regarding deposits, loans, rate of interest, etc. of these banks are controlled by the Central Bank. Type 3. Industrial Banks / Development Banks Industrial / Development banks collect cash by issuing shares & debentures and providing long-term loans to industries. The main objective of these banks is to provide long-term loans for expansion and modernisation of industries. In India such banks are established on a large scale after independence. They are Industrial Finance Corporation of India (IFCI), Industrial Credit and Investment Corporation of India (ICICI) and Industrial Development Bank of India (IDBI). Type 4. Land Mortgage / Land Development Banks Land Mortgage or Land Development banks are also known as Agricultural Banks because these are formed to finance agricultural sector. They also help in land development. In India, Government has come forward to assist these banks. The Government has guaranteed the debentures issued by such banks. There is a great risk involved in the financing of agriculture and generally commercial banks do not take much interest in financing agricultural sector. Type 5. Indigenous Banks Indigenous banks means Money Lenders and Sahukars. They collect deposits from general public......

Words: 1609 - Pages: 7

Premium Essay

Venture Financing in India

...venture capital activity. Industrial Finance Corporation of India (IFCI) formed Risk Capital and Technology Finance Corporation (RCTC), with headquarters at New Delhi. TDICI is now known as ICICI Venture Funds Management Company Ltd. or ICICI Venture; and RCTC is now known as IFCI Venture Capital Funds Ltd. (IVCF). Their main focus is on development and commercialisation of viable indigenous, often, untried technologies. Almost at the same time, Credit Capital Venture Finance Limited was started in the private sector. This has mobilised funding from global funding agencies, with the joint sponsorship of Commonwealth Development Corporation, London (U.K.), Credit Capital Finance Corporation, Asian Development Bank (ADB), and Bank of India, a public sector bank in India. Government of India, in November 1988, announced the first venture capital guidelines in the Parliament. These guidelines provided venture financing of technology start-ups, promoted primarily by first generation entrepreneurs. Soon thereafter in 1989, four institutions were selected by the World Bank under its Industrial Technology Development Project to start venture capital activities in different parts of the country. ICICI at Mumbai, Gujarat Industrial Investment Corporation (GIIC) in Ahmedabad, Andhra Pradesh Industrial Development Corporation (APIDC) in Hyderabad, and 4 Canara Bank in Bangalore were selected under this scheme. IFCI at New Delhi, and Infrastructure Leasing and Financial Services......

Words: 7046 - Pages: 29

Premium Essay

Research

...to provide long-term industrial finance in any significant manner. It is against this backdrop that the government established The Industrial Finance Corporation of India (IFCI) on July 1, 1948, as the first Development Financial Institution in the country to cater to the long-term finance needs of the industrial sector. The newly-established DFI was provided access to low-cost funds through the central bank's Statutory Liquidity Ratio or SLR which in turn enabled it to provide loans and advances to corporate borrowers at concessional rates. This arrangement continued until the 1990s when it was recognized that there was need for greater flexibility to respond to the changing financial system. It was also felt that IFCI should directly access the capital markets for its funds needs. It is with this objective the constitution of IFCI was changed in 1993 from a statutory corporation to a company under the Indian Companies Act, 1956. Subsequently the name of the company was also changed to 'IFCI Limited ' with effect from October1999. IFCI has fulfilled its original mandate as a DFI by providing long term financial support to all segments of Indian Industry. It has also been chiefly instrumental in translating the government's development priorities into reality. Until the establishment of ICICI in 1956, IFCI remained solely responsible for implementation of the government's industrial policy initiatives. Its contribution to the modernization of Indian Industry, export promotion...

Words: 440 - Pages: 2

Free Essay

Arvind Mills

...| 5,228,597 | 12,228,597 | ASIAN PAINT | 7,000,000 | 381.2 | 28-May-03 | 309.55 | 28-Nov-03 | -18.80% | -1,315,714 | 5,684,286 | MAHINDRA & MAHINDRA | 7,000,000 | 166.3 | 23-Jul-03 | 406.2 | 23-Jan-04 | 144.26% | 10,098,016 | 17,098,016 | BAJAJ HINDUSTAN | 7,000,000 | 154.45 | 26-Aug-03 | 374.05 | 26-Feb-04 | 142.18% | 9,952,736 | 16,952,736 | BPCL | 7,000,000 | 309.35 | 26-Aug-03 | 460.15 | 27-Feb-04 | 48.75% | 3,412,316 | 10,412,316 | INDIAN HOTEL | 7,000,000 | 269.8 | 1-Oct-03 | 420.95 | 31-Mar-04 | 56.02% | 3,921,609 | 10,921,609 | ASIAN PAINT | 7,000,000 | 289.75 | 22-Oct-03 | 320.1 | 22-Apr-04 | 10.47% | 733,218 | 7,733,218 | ACC | 8,000,000 | 251 | 20-Jan-04 | 233.4 | 19-Jul-04 | -7.01% | -560,956 | 7,439,044 | IFCI | 8,000,000 | 18.15 | 30-Jan-04 | 9.3 | 29-Jul-04 | -48.76% | -3,900,826 | 4,099,174 | MAHINDRA & MAHINDRA | 8,000,000 | 454.2 | 9-Feb-04 | 443.15 | 6-Aug-04 | -2.43% | -194,628 | 7,805,372 | BAJAJ HINDUSTAN | 8,000,000 | 548.1 | 12-Mar-04 | 761 | 12-Oct-04 | 38.84% | 3,107,462 | 11,107,462 | CIPLA | 8,000,000 | 1184.65 | 16-Mar-04 | 1351.25 | 15-Sep-04 | 14.06% | 1,125,058 | 9,125,058 | INFOSYS | 8,000,000 | 5312.9 | 6-Apr-04 | 6882 | 5-Oct-04 | 29.53% | 2,362,702 | 10,362,702 | IPCL | 8,000,000 | 190.85 | 27-Apr-04 | 190.85 | 26-Oct-04 | 0.00% | 0 | 8,000,000 | ITC | 8,000,000 | 902.95 | 1-Jun-04 | 1289.65 | 1-Dec-04 | 42.83% | 3,426,103 | 11,426,103 | RELIANCE ENERGY | 8,000,000 | 540.5 | 9-Jun-04 | 541.3 |......

Words: 1991 - Pages: 8

Premium Essay

Banking

...Market and Derivatives Association of India Financial Intermediation Services Indirectly Measured Foreign Liabilities and Assets Survey Flow Of Funds Foreign Portfolio Investment Forward Rate Agreement Fiscal Responsibility and Budget Management Act, 2003 Floating Rate Note Farmers’ Service Societies First Working Group on Money supply DD DDS DEIO DESACS FCNRA DGBA FCNRD DGCI&S FDI FEMA FI FICCI DI DICGC DID DMA FII FIMMDA DRI DSBB FISIM DVP ECB ECB ECGC FLAS FOF FPI FRA FRBM ECS EDMU EEA EEC EEFC FRN FSS FWG x Manual on Financial and Banking Statistics Abbreviations GDP GDR GFD GFS GIC GLS GNIE Gross Domestic Product Global Depository Receipt Gross Fiscal Deficit IFC IFC(W) IFCI International Finance Corporation International Finance Corporation (Washington) Industrial Finance Corporation of India Investment Fluctuation Reserve Account International Financial Statistics Iterative Generalized Least Squares Industrial Investment Bank of India Index of Industrial Production International Investment Position India Millennium Deposits International Monetary Fund India Indian Rupee Input-Output Transaction Table Interest Payment Industrial Reconstruction Bank of India International Swaps and Derivative Association International Standard Industrial Classification International Standards Organization International Transaction Reporting System International Working Group on External Debt Statistics Khadi &......

Words: 1394 - Pages: 6

Premium Essay

Top 500 Company

...Shoppers St. | 341 | Birla Corpn. | 441 | Natco Pharma | 42 | Bank of Baroda | 142 | Havells India | 242 | G S F C | 342 | NIIT Tech. | 442 | Jai Corp | 43 | Reliance Power | 143 | CRISIL | 243 | Chettinad Cement | 343 | Educomp Sol. | 443 | Guj NRE Coke | 44 | Dr Reddy's Labs | 144 | Allahabad Bank | 244 | Supreme Inds. | 344 | Sh.Global Trad. | 444 | S Mobility | 45 | Bosch | 145 | Tata Comm | 245 | Redington India | 345 | Clariant Chemica | 445 | NCC | 46 | Punjab Natl.Bank | 146 | Bharat Forge | 246 | Ruchi Soya Inds. | 346 | BF Utilities | 446 | Techno Elec. | 47 | Idea Cellular | 147 | M & M Financial | 247 | Carborundum Uni. | 347 | Graphite India | 447 | Dev.Credit Bank | 48 | B P C L | 148 | Motherson Sumi | 248 | IFCI | 348 | Nava Bharat Vent | 448 | Man Infra | 49 | Ambuja Cem. | 149 | I O B | 249 | Century Textiles | 349 | Zydus Wellness | 449 | Praj Inds. | 50 | Cipla | 150 | Ashok Leyland | 250 | Gitanjali Gems | 350 | Blue Star | 450 | Zylog Systems | 51 | Lupin | 151 | Andhra Bank | 251 | Tube Investments | 351 | Tulip Telecom | 451 | REI Agro | 52 | Grasim Inds | 152 | Syndicate Bank | 252 | JSW ISPAT | 352 | Hind.Oil Explor. | 452 | Peninsula Land | 53 | ACC | 153 | Corporation Bank | 253 | Bank of Maha | 353 | India Infoline | 453 | Sundram Fasten. | 54 | Siemens | 154 | Britannia Inds. | 254 | CMC | 354 | GTL Infra. | 454 | Merck | 55 | Adani Ports | 155 | Unitech | 255 | Vijaya Bank | 355 | M T N L | 455 | Ent.Network | ......

Words: 1619 - Pages: 7

Premium Essay

Banking Network in India

...Network in India 167 Commercial Banks: 26 Public sector banks, 21 Private sector Banks(14+7) 14 old private sector banks, 7 new private sector banks, 31 foreign banks, 82 regional rural banks, 4 local area banks Co-operative Banks: 1,721 urban cooperative banks, 31 state cooperative banks and 371 district central cooperative banks. Private Houses applied to RBI for Banking Licence: Reliance Capital, India Bulls, Religare, IL&FS, IDFC, IFCI and Aditya Birla Financial Services S P GARG 11th July 2011 21 Private sector Banks(14+7) 14 old private sector banks, 7 new private sector banks, 31 foreign banks, 82 regional rural banks, 4 local area banks Co-operative Banks: 1,721 urban cooperative banks, 31 state cooperative banks and 371 district central cooperative banks. Private Houses applied to RBI for Banking Licence: Reliance Capital, India Bulls, Religare, IL&FS, IDFC, IFCI and Aditya Birla Financial Services S P GARG 11th July 2011...

Words: 278 - Pages: 2

Premium Essay

Case1

...world characterized by uncertainty and scarcity. Conflict, power and politics are natural outcomes of organizing. Differences in goals, backgrounds, and tasks are necessary for organisational excellence, but these differences can throw groups into conflict. Managers use power and politics to manage and resolve conflict. Organisational culture has visible and hidden elements. Culture is a man made part of the environment. Culture can be interpreted by looking at the organisation’s rites and ceremonies, stories, symbols, structures, control systems and power relationships. Four types of culture exist in an organisational context- mercenary culture, network culture, communal, fragmented culture. For example, the company that I work for, viz. IFCI Ltd has ‘Network Culture’ with characteristics of many rituals, coalitions, people focus etc. Through the course we also learnt about task and people orientation with discussion on Telling, Participating, Selling or Delegating Styles and their applicability in various organisational contexts. Through the cases of British Airways and GE we learnt about the important construct of Succession Planning which is a roadmap for identifying & developing tomorrow’s leaders today. The main purpose of ensure that essential knowledge and abilities will be maintained when employees in critical positions leave. Managers prefer to organize day to day activities in a predictable, routine manner. However, change not stability is the natural......

Words: 841 - Pages: 4

Premium Essay

Indian Financial System

...banking & non-banking financial institutions. Banking institutions are creators of credit while non-banking financial institutions are purveyors of credit. While the liabilities of banks are part of the money supply, this may not be true of non-banking financial institutions. In India, non-banking financial institutions, namely, the developmental financial institutions (DFIs) & non-banking financial companies (NBFCs) as well as housing finance companies (HFCs) are the major institutional purveyors of credit. Financial institutions can also be classified as term-finance institutions such as the industrial development bank of India (IDBI), industrial credit & Investment Corporation of India (ICICI), industrial financial corporation of India (IFCI), small industries development bank of India (SIDBI) & industrial investment bank of India (IIBI). Money Market Instruments The money market can be defined as a market for short-term money and financial assets that are near substitutes for money. The term short-term means generally a period upto one year and near substitutes to money is used to denote any financial asset which can be quickly converted into money with minimum transaction cost. Capital Market Instruments The capital market generally consists of the following long term period i.e., more than one year period, financial instruments; In the equity segment Equity shares, preference shares, convertible preference shares, non-convertible preference shares etc and in the......

Words: 1577 - Pages: 7

Premium Essay

Rbi Functions

...social objectives. The supervisory functions of the RBI have helped a great deal in improving the standard of banking in India to develop on sound lines and to improve the methods of their operation. Promotional functions With economic growth assuming a new urgency since Independence, the range of the Reserve Bank's functions has steadily widened. The Bank now performs a varietyof developmental and promotional functions, which, at one time, were regarded as outside the normal scope of central banking. The Reserve Bank was asked to promote banking habit, extend banking facilities to rural and semi-urban areas, and establish and promote new specialised financing agencies. Accordingly, the Reserve Bank has helped in the setting up of the IFCI and the SFC; it set up the Deposit Insurance Corporation in 1962, the Unit Trust of India in 1964, the Industrial Development Bank of India also in 1964, the Agricultural Refinance Corporation of India in 1963 and the Industrial Reconstruction Corporation of India in 1972. These institutions were set up directly or indirectly by the Reserve Bank to promote saving habit and to mobilise savings, and to provide industrial finance as well as agricultural finance. As far back as 1935, the Reserve Bank of India set up the Agricultural Credit Department to provide agricultural credit. But only since 1951 the Bank's role in this field has become extremely important. The Bank has developed the co-operative credit movement to encourage saving,......

Words: 1946 - Pages: 8

Premium Essay

Venture Capital

...Indian origin with foreign capital, also make their entry. The venture capital arms of companies like Intel and GE become active in India. The main focus is on Information Technology and Internet related investments. PRIVATE EQUITY & VENTURE CAPITAL IN INDIA Years Pre1995 Equity Capital and Venture Capital Until the mid-1990s, the need for Private Equity was met largely by development finance institutions like IDBI, ICICI and IFCI. 1984 The Industrial Credit and Investment Corporation of India (ICICI) decide to allocate funds for venture capital type activity. 1986 ICICI launches a venture capital scheme to encourage start-up ventures in the private sector in merging technology sectors. 1988 Technology Development and Information Company of India Ltd. (TDICI) is set up to encourage private sector ventures in emerging technology sectors. (TDICI has since been renamed ICICI Venture Funds). With strong encouragement and financial support from the World Bank, the Government of India announces guidelines for venture capital funds. IFCI-sponsored RCF is converted into the Risk Capital and Technology Finance Corporation of India Ltd. (RCTC). 1989 Regional venture capital fund APIDC Venture Capital (APIDC VCL) is set up in Andhra Pradesh, followed by Gujarat Venture Finance Ltd. (GVFL) in Gujarat. Canbank Venture Capital, sponsored by Canara Bank, is also set up. The first private sector funds come into being. Credit Capital Venture Fund (India) Ltd. is......

Words: 4814 - Pages: 20

Premium Essay

Indian Banking Sector

...reserves of all scheduled banks and hence is known as the “Reserve Bank”. The bank was formed in 1935 and nationalized in 1949. 2. Public Sector Banks :(28) • State Bank of India and its Associates • Nationalized Banks e.g. Bank of Baroda, Bank of India etc. • Regional Rural Banks 3. Private Sector Banks :(29) E.g.ICICI Bank, HDFC Bank etc. 4. Co-operative Sector Banks: • State Co-operative Banks • Central Co-operative Banks • Primary Agricultural Credit Societies • Land Development Banks • State Land Development Banks 5. Development Banks: Development Banks provide long term finance for setting up industries. They also provide short-term finance (for export and import activities) • Industrial Finance Co-operation of India (IFCI) • Industrial Development of India (IDBI) • Industrial Investment Bank of India (IIBI) • Small Industries Development Bank of India (SIDBI) • National Bank for Agriculture and Rural Development (NABARD) • Export-Import Bank of India MARKET STRUCTURE: The banking structure in the country is oligopolistic in nature. The sector after liberalization has become open to private players as well as to foreign players which has increased competition in the market resulting into innovative style of banking. The private banks in some way have outperformed public sector bank as a whole in the last decade due to its customer focused, infrastructure and efficient leadership. Public sector banks hold over 70 percent of total assets of the......

Words: 2439 - Pages: 10

Premium Essay

Banking System

...units of mutual funds), has been volatile during the 1990s. There has been a gradual increase in the share of products, such as deposits, during the mid-1990s. 8 CRIS INFAC BANKING ANNUAL REVIEW: AUGUST 2002, 136 PAGES CRIS INFAC BANKING ANNUAL REVIEW: AUGUST 2002, 136 PAGES Financial system in India: Overview Ministry of Finance Reserve Bank of India (RBI) Chart 1.1 Securities Exchange Board of India (SEBI) Pension funds, Provident funds Financial institutions Commercial banks Non-banking finance companies (NBFCs) Capital markets Mutual funds Term lending institutions l IDBI l IFCI l ICICI Sectoral institutions l TFCI l EXIM l PFC l NABARD State level institutions l SFCS l SIDC l Stock exchange l Merchant bankers l Underwriters l Stock brokers l FIIs l Retail investors IDBI: Industrial Development Bank of India IFCI: Industrial Finance Corporation of India ICICI: Industrial Development and Investment Corp. of India TFCI: Tourism Finance Corp. of India EXIM: Export Import Bank of India Compiled by CRIS INFAC PFC: Power Finance Corporation NABARD: National Agricultural Bank for Reconstruction & Development SFC: State Finance Corporation SIDC: State Industrial Development Corporation FII: Foreign Institutional Investor 9 Household sector savings in financial and physical assets (Rs crore) Gross domestic savings Per cent of GDP Household savings Per cent of GDP - Financial assets (Net) Per cent of GDP - Physical......

Words: 3584 - Pages: 15

Monster High: Electrificadas | x264 killers | 250 graines mix plantes pour aquarium décor