1. ABOUT IFCI:

IFCI, the first Development Financial Institution in India, was set up in 1948 to help develop industrialization by providing medium and long- term credits. After forty-five years of rich and varied experience as the pioneering development finance institution in the country, IFCI was converted from a Statutory Corporation to a public limited company from 1 st July 1993 and is now known as The Industrial Finance Corporation of India Ltd.

IFCI is not only a term-lending institution, but an active financial intermediary and a provider of a wide range of services to industrial units in India. IFCI’s services principally cover:

Under project finance IFCI provides direct financial assistance to industrial projects in the corporate and co-operative sectors. The projects may be of the following types –

  New Projects
  Expansion Projects
  Diversification Projects
  Modernization Projects

II. FORM OF ASSISTANCE

IFCI provides financial assistance in the following forms:

  Rupee Loans
  Foreign Currency Loans
  Underwriting / Direct Subscription to shares and debentures
  Guarantees for deferred payments and foreign currency loans

III. LIMITS OF ASSISTANCE

There is no statutory minimum or maximum ceiling on the amount of assistance to be granted by IFCI. However, it is normally kept within prudential limits and does not normally exceed 25% of IFCI’s net worth.

IV. SIZE OF THE PROJECT

Generally IFCI finances projects with capital cost above Rs.10 crores either on its own, or in participation with other financial institutions and banks, as may be found feasible. IFCI, also finances industrial projects costing between Rs.5 crores and Rs.10 crores, more as a matter of exception, and, only by way of catalytic and residuary support.

V. FINANCIAL SERVICES

Besides the traditional project financial, IFCL also provides various Financial Services such as:

  Equipment Financing
  Equipment Leasing
  Equipment Credit
  Suppliers Credit

The variety of the financial services now available from IFCL, provide considerable choice to the existing industrial concerns to opt for the facilities that are most suitable and appropriate with regard to their specific requirements.

VI. MERCHANT BANKING ACTIVITIES

IFCI entered the Merchant Banking business with effect from July 1986. In 1995 IFCL set up a separate division named IFCL Financial Services Ltd (I-FIN) for providing Merchant Banking Services, which include a variety of services such as issue management, credit syndication, project counseling, identifying turn around strategies, financial restructuring etc.

VII. INFRASTRUCTURE INSTITUTIONS SET UP (IFCI)

Over the Years, IFCI has identified several requirements of the financial infrastructure of the country and accordingly promoted specialized institutions to fulfill these requirements. Some of the important specialized institutions promoted by IFCL are:

(i) Technical Consultancy Organizations (TCOs) in various States:
The TCOs provide, under one roof, the total package of consultancy services from ‘concept’ to ‘commissioning’ of industrial projects, with focus on tiny and small scale entrepreneurs.

(ii) Management Development Institute (MDI)
MDI provides training in modern management techniques to entrepreneurs and technologists entering industry as well as to executive of enterprises. It also undertakes research in industrial and business management, development banking and related matters.

(iii) Risk Capital and Technology Finance Corporation Ltd (RCTC)
RCTC provides risk capital to the first generation entrepreneurs and also finance for technology development, particularly for advancement, promotion, transfer/ adaptation of technology. It also provides venture capital for potentially high profitable ventures, involving immovable products / technology / services, aimed at futuristic or new markets.

(iv)Tourism Finance Corporation of India Ltd (IFCI)
TFCI was sponsored by IFCI along with other all India Institutions and Banks, as a specialized all India development finance institution to cater to the needs of the tourism industry so as to ensure requisite priority in funding tourism and related projects.

(v) Rashtriya Grama Vikas Nidhi (RGVN)
RGVN seeks to establish, promote, support and develop voluntary organizations in socio-economic upliftment of rural and urban poor and orient them towards industrial pursuits.

(vi) Investment Information & Credit Rating Agency of India Ltd. (ICRA)
ICRA primarily provides the credit rating, which guides investors/ creditors in determining risks associated with debt instruments/ credit obligations. ICRA ratings reflect independent professional and impartial assessment of such instruments/obligations.

(vii) Institute of Labour development (ILD)
ILD aims a providing training and retraining facilities to workers, which inter-alia enable a better understanding of the socio-economic problems and the worker’s responsibilities towards their enterprises and their rights and obligations as workers in an industry.

(viii) Tourism Advisory & Financial Services Corporation of India Ltd (TAFSIL)
The main objects of TAFSIL encompass, inter-alia, micro level project consultancy, building up of data bank, preparation of project profits to help new entrepreneurs, assisting State Governments in conducting tourism potential survey and drawing up master plans, etc.

IFCI has a long tradition of extending financial assistance to tourism related projects, facilities and services which, interalia, include hotel, holiday resorts, convention halls, etc. Loans granted by IFCI to hotel projects approved by Deptt. Of Tourism, Govt. of India, are eligible for interest subsidy as per the scheme as announced by Ministry of Tourism, Govt. of India.