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Report: Indian government considers sale of nonbank IFCI's noncore assets

The Indian government is considering a sale of nonbank IFCI Ltd.'s noncore assets, as well as a restructure of its operations and an overhaul of top management, The Economic Times reported Jan. 16, citing government officials.

The government is reluctant to inject additional capital into IFCI until the company sees an improvement in recoveries and trims down its holdings of noncore operations, according to a senior government official. Corporate governance issues are also being reviewed by the government, the official said. The company is 56.42% held by the Indian government.

Further, another official said a merger is unlikely to be on the cards for IFCI unless the company sees a stabilization of its financials, as any transaction could destabilize the entity that acquires IFCI.

IFCI posted a net loss of 9.70 billion Indian rupees for the fiscal year ended March 2018, widening from a net loss of 3.08 billion rupees in the prior financial year, according to S&P Global Market Intelligence data.

As of Jan. 15, US$1 was equivalent to 71.04 Indian rupees.