IFCI strikes all-time high

IFCI surged 12.58% to Rs 106.50 on reports International Finance Corporation will pick up stake in the term lending institution.

On BSE, 4.17 crore shares of the scrip were traded. The stock had an average daily volume of 1.17 crore shares on BSE in past one quarter.

The scrip had touched a high of Rs 109.85, an all time high for the counter on BSE. Its low for the day so far is at Rs 96.50. The stock had hit a 52-week low of Rs 10.29 on 12 December 2006.

The scrip outperformed the market over the past one month till 30 November 2007, rising 5.17% compared to the Sensex's decline of 1.83%. It also outperformed the market in the past one quarter, surging 52.83% compared to Sensex's rise of 26.40%.

The term-lending institution has an equity capital of Rs 639.99 crore. Face value per share is Rs 10.

Life Insurance Corporation of India is the single largest shareholder in the company with 8.40% stake (as at end September 2007).

International Finance Corporation (IFC), the investment arm of World Bank, is likely to hold less than 20% stake in IFCI. IFCI needs funds to meet its capital adequacy requirements. Reports further indicated that IFC has already conducted due diligence on IFCI.

Meanwhile, IFCI has set 14 December 2007 as the last date for submission for financial bids for acquiring a strategic 26% stake in the company. The IFCI board is expected to announce the strategic investor by 20 December 2007. As per reports only four of the eight shortlisted bidders have actually conducted due diligence till date. These include the Sterlite Industries and Morgan Stanley & Company consortium, the WL Ross, GS Capital Partners (VI) Fund, Standard Chartered Bank and HDFC combine, the Shinsei Bank, PNB and JC Flowers group and the Cargill Financial Services Corporation and Texas Pacific consortium

The remaining bidders — GE Corporation, IDFC, Natixis and Blackstone Group — are yet to conduct due diligence, raising doubts over their interest in the sale.

At the current price of Rs 106.50, the scrip trades at a PE multiple of 3.42, based on Q2 September 2007 annualised EPS of Rs 31.14.

IFCI's principal activities are project financing, providing financial services and comprehensive corporate advisory services. The company also provides equipment finance, equipment credit, equipment leasing, corporate loans, short-term loans and working capital loans to meet the specific needs of corporates.

IFCI reported 329.30% spurt in net profit to Rs 497.29 crore on 188.30% jump in operating income to Rs 944.01 crore in Q2 September 2007 over Q2 September 2006.