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State-owned IFCI on Tuesday said its board has approved a proposal for raising up to Rs 500 crore capital through the issuance of equity shares to the government.
"12,39,77,188 number of Equity Shares will be issued for an amount aggregating up to Rs 500 crore," IFCI said in a regulatory filing.

IFCI board okays to raise Rs 500 cr from govt via issuance of equity shares

The move came after the company received a communication from the Department of Financial Services (DFS), Ministry of Finance to consider 'consolidation of IFCI Group'. As per the filing, at the company level, StockHolding Corporation of India Ltd, IFCI Factors Ltd, VFCI Infrastructure Development Ltd and IIDL Realtors Ltd will merge with IFCI Ltd. Further, StockHolding Services Ltd, IFCI Financial Services Ltd, IFIN Commodities Ltd and IFIN Credit Ltd will be merged into a single entity, which will be a direct subsidiary of the consolidated listed entity. Additionally, StockHolding Document Management Services Ltd, StockHolding Securities IFSC Ltd, IFIN Securities Finance Ltd, IFCI Venture Capital Funds Ltd and MPCON Ltd shall be direct subsidiaries of the consolidated listed entity.

IFCI soars 15% as board approves merger of IFCI group of companies

State-owned IFCI has sought the government’s approval to consolidate its group entities, including its broking arm. The plan involves two merger stages: Merger 1: Combining Stock Holding Corporation, IFCI Factors, IFCI Infrastructure Development, and IIDL Realtors with IFCI Limited, which will remain an NBFC engaged in lending, custodial, and advisory services. Merger 2: Consolidating Stock Holding Services, IFCI Financial Services, IFIN Commodities, IFIN Credit, and IFIN Securities Finance into one subsidiary under IFCI Limited.  Additionally, IFCI has proposed divesting its stake in MPCON Limited to the Government of India.

IFCI seeks government nod for consolidation of group companies

IFCI’s TNW rose to ₹766 cr in FY25 from -₹92 cr in FY24, aided by ₹1,000 cr GoI infusion, but CAR/Tier-I CAR remained negative (-23.04%) due to high exposures. The company remains reliant on GoI support, making timely equity infusion and asset divestment key rating sensitivities.

IFCI’s portfolio fell to ₹4,367 cr in FY25 from ₹5,046 cr in FY24, reducing interest income to ₹351 cr. PAT dropped to ₹44 cr on ₹842 cr total income, NIM declined to -2.18%, and ROTA fell to 0.51% due to lower recoveries and high interest costs, despite marginally higher yield and improved opex

IFCI’s asset quality remains poor, with GNPA/NNPA at 95.98%/79.69% in FY25, though recoveries stood at ₹580 cr. PCR fell to 69.37% from 90.62% in FY24. Most NPAs are under NCLT or restructuring, making adequate provisioning and NPA reduction critical for capitalisation, profitability, and credit profile.

The issuer has made timely interest payments.

Rahul Bhave, MD and CEO

IFCI is majority-owned by GoI and manages government-mandated social and industrial schemes. Despite not making new disbursements, IFCI faces asset quality issues and losses eroding its net worth, requiring significant equity infusion to meet regulatory capital norms. Continued timely GoI support remains a key rating sensitivity.

Security Name: 9.75% IFCI Limited 13 Jun 2030

ISIN: INE039A09MC4

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