The wait is almost over for all those investors eyeing a stake in the oldest financial institution in the country IFCI. The board of IFCI is meeting on August 4 to kick-start the process of inviting bids for the strategic sale.
Meanwhile, speculation is rife that among the many interested parties, Barclays is willing to pay a premium of Rs 85 per share. Sources at IFCI maintain that bidders will be selected on a competitive basis. The IFCI scrip closed at Rs 52 on wednesday down 8.8%.
We will go by the process and select bids competitively, even though there has been tremendous interest from both domestic and foreign parties, a top official said. Other parties include Citigroup, Lehman Brothers, BNP Paribas, Deutsche Bank and other Indian banks.
According to industry sources the internal valuation of the company stands at Rs 70 per share. At this stage it is not clear whether there would a single investor or a basket of investors. There could be a possibility of a SPV, a source said. It is understood that the whole process will be wrapped up six months from now. The board meeting will set in motion the plans to acquire a stake sale.
Bidders will have to meet criteria for net worth, among others. Ernst & Young is the consultant for the process. The accumulated losses for IFCI were Rs 4,772 crore and have come down but still stand at Rs 800 crore as on March 31, 2007. It has a positive net worth at Rs 446 crore. Its capital adequacy stands at 14.4%.
The price tag for IFCI can be more than Rs 4,000 crore, industry sources said. Various portfolio investments, where value can be unlocked at a later stage, can yield Rs 2,000 crore, recoveries from NPAs could yield another Rs 2,000 crore, and real estate assets another Rs 3,000 crore.
source:economic times
Meanwhile, speculation is rife that among the many interested parties, Barclays is willing to pay a premium of Rs 85 per share. Sources at IFCI maintain that bidders will be selected on a competitive basis. The IFCI scrip closed at Rs 52 on wednesday down 8.8%.
We will go by the process and select bids competitively, even though there has been tremendous interest from both domestic and foreign parties, a top official said. Other parties include Citigroup, Lehman Brothers, BNP Paribas, Deutsche Bank and other Indian banks.
According to industry sources the internal valuation of the company stands at Rs 70 per share. At this stage it is not clear whether there would a single investor or a basket of investors. There could be a possibility of a SPV, a source said. It is understood that the whole process will be wrapped up six months from now. The board meeting will set in motion the plans to acquire a stake sale.
Bidders will have to meet criteria for net worth, among others. Ernst & Young is the consultant for the process. The accumulated losses for IFCI were Rs 4,772 crore and have come down but still stand at Rs 800 crore as on March 31, 2007. It has a positive net worth at Rs 446 crore. Its capital adequacy stands at 14.4%.
The price tag for IFCI can be more than Rs 4,000 crore, industry sources said. Various portfolio investments, where value can be unlocked at a later stage, can yield Rs 2,000 crore, recoveries from NPAs could yield another Rs 2,000 crore, and real estate assets another Rs 3,000 crore.
source:economic times
