Exclusive | Govt-owned IIFCL mulling IPO by 2024

"Given the pace at which the company has been growing and the pace at which its internal systems are being revamped, I'm sure we will be in a position to come up with an IPO by next year. I'm very optimistic about that," said PR Jaishankar, managing director, IIFCL

Government of India-owned India Infrastructure Finance Company Ltd (IIFCL) is mulling an initial share sale by next year provided market conditions are favourable, said PR Jaishankar, Managing Director, in an exclusive conversation with Moneycontrol on Friday, May 19.

"Given the pace at which the company has been growing and the pace at which its internal systems are being revamped, I'm sure we will be in a position to come up with an IPO by next year. I'm very optimistic about that," said Jaishankar.

Jaishankar added that last year the firm had seen an improvement in financial performance with net and gross NPAs (non-performing assets) falling to 1.41 and 4.76 percent, respectively, for the financial year ended March 2023.

"The year before that, the net and gross NPAs were about 6 and 13 percent, respectively. When I took over (in 2020), the gross NPA was around 20 percent, while the net was about 10 percent. We have gradually come down. Now we are in a very stable position and everything is under control," Jaishanakar said.

With a standalone profit after tax (PAT) of Rs 1,076 crore in FY2022-23 compared to Rs 514 crore in the year prior, IIFCL reported a 109.16 percent year-on-year (y-o-y) growth in PAT.

The central government has 100 percent stake in IIFCL. According to its website, the company caters to infrastructure sub-sectors through its various products, viz, direct lending, takeout finance, credit enhancement, InvITs (infrastructure investment trust), infrastructure bonds, and refinance.

"The measures for having the company in sync with the market are all in place. We have robust and integrated credit and risk management policies," Jaishankar explained.

IIFCL aims to sanction loans worth about Rs 40,000-45,000 crore next year, and disburse around Rs 20,000 crore, said Jaishankar.

The company will also focus on an aggressive loan recovery strategy going ahead, the MD added.

"Recovery has been a major focus for us. We have tried to be aggressive regarding recoveries from stressed projects," he said.

Jaishankar highlighted that along with the reduction in IIFCL’s net NPAs, its Provision Coverage Ratio, which was around 62.75 percent last year, has improved to 70.48 percent this year.

The state-owned company’s loan portfolio grew 7.42 percent to Rs. 42,271 crore in FY 2022-23, from Rs. 39,352 crore in FY 2021-22. The company's net worth grew to Rs 12,878 crore in FY2022-23, up from Rs 11,737 crore in FY2021-22.