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Introduction
IFCI’s full form is Industrial Finance Corporation of India, founded as a Statutory Corporation in 1948 to offer medium- and lengthy finance to industries. IFCI became a Public Limited Company under the Companies Act of 1956 when the IFC Act was repealed in the year of1993. IFCI is currently a government-owned corporation, with the Indian government owning 61.02 % of the company’s paid-up capital. IFCI is also a recognised Public Financial Institution under Section 2(72) of the Companies Act in 2013 and is registered as a Systemically Important Non-Deposit Taking Non-Banking Finance Company with the Reserve Bank of India (RBI).
Table of content
History of IFCI Bank
Indian capital markets were somewhat underdeveloped at the time of independence in 1947. The need for capital was fast increasing, yet capital sources were scarce. The commercial banks that existed at the time were not well-positioned to meet long-term capital demands in any substantial way. The Industrial Finance Corporation of India (IFCI) was created on July 1, 1948, by adopting the IFC Act 1948 in response to this backdrop and to bridge the demand-supply gap for capital needs in the sector.
IFCI’s full form is the Industrial Finance Corporation of India, India’s first Development Financial Institution, established to promote economic growth through infrastructure and industry development. Since then, IFCI has made substantial contributions to the economy through its unwavering support for initiatives in manufacturing, infrastructure, services, and agriculture-related industries. The Indian Capital Markets and Financial System saw considerable changes after the Indian economy was liberalised in 1991. The constitution of IFCI was converted from a statutory corporation to a company under the Indian Companies Act, 1956, to facilitate raising funds directly through capital markets. The company’s name was subsequently changed to ‘IFCI Limited’ in October 1999.
Functions
- The IFCI bank’s main goal is to provide medium-fast loans and advances to industrial and manufacturing enterprises
- Before making any loans, it considers several variables
- They research the significance of the industry in our country’s economy, the project’s overall cost, and, eventually, the service performance and administration
- If the results of the above factors are satisfactory, the IFCI will approve the loan
- The IFCI bank can also invest in these companies’ debentures on the market
- The IFCI bank also backs up these industrial enterprises’ loans
- The Industrial Finance Corporation of India might choose to underwrite securities when a company issues shares or debentures
- It also ensures deferred payments on loans taken out in foreign currency from foreign banks
- The Allied Services and Merchant Banking Department is a separate division. They handle issues including capital restructuring, loan syndication, mergers and acquisitions
- The Industrial Finance Corporation of India has promoted three subsidiaries to boost industrial growth: IFCI Financial Services Ltd, IFCI Insurance and Services Ltd
- It is responsible for the operation and regulation of these three companies
Financial Products of IFCI
Products Related to Loans
The Industrial Finance Corporation of India was the country’s first financial institution aimed at growth, created on July 1, 1948, to meet the abiding financing needs of the industrial sector. IFCI bank has been a driving force behind the restructuring of Indian industry, trade facilitation, trade liberalisation, and the fostering of breakthrough industries, among other commercially viable and market-friendly operations, since its inception.
Projects related to Finance
IFCI bank experts can provide personalised banking solutions to address the rising and diverse demand for various levels of projects – greenfield, formerly industrial, diversification, and modernisation of existing infrastructure and manufacturing projects – thanks to their deep understanding of sectoral dynamics.
Highways, Power, including renewable power, Oil & Gas, Ports, telecommunications, Aircraft, Basic Metallurgy, Real Estate, Pharmaceuticals, Electronics, Textiles, Smart Cities & Urban Infrastructure, and others are among the sectors covered by Project Finance.
Projects on Corporate Finance
IFCI bank serves many customers, including small, mid-sized, and big corporations. Through Loan Against Shares, Balance Sheet Funding, Lease Rental Discounting, Long Term Working Capital requirements, Promoter Funding, Capital Expenditure, and recurring Maintenance Capex, IFCI provides financial solutions in corporate finance.
Structured Finance
IFCI bank also offers Structured Debt products to its clients, assisting in providing effective financial solutions for various needs, including acquisition financing, pre-IPO financing, sponsor financing and Off-Balance Sheet Structured Solutions, among others.
Conclusion
The Industrial Finance Corporation of India (IFCI) was the government’s first financial institution following independence. The main goal of forming IFCI was to provide long-term financing to the country’s manufacturing and industrial sectors. The IFCI’s primary stakeholders are the IDBI, scheduled banks, the insurance industry, and cooperative banks. The IFCI’s authorised capital is 250 crores, and the Central Government has the authority to enhance it if needed. The Industrial Finance Corporation of India has made a substantial contribution to the development of our economy during the last few decades. It is also in charge of our industrial sector’s expansion, modernisation, and growth.
