Cabinet
Cabinet approves the proposal for increase in authorised capital and equity support to India Infrastructure Finance Company Limited (IIFCL)
प्रविष्टि तिथि:
11 DEC 2019 6:18PM by PIB Delhi
The Union Cabinet chaired by Prime Minister Narendra Modi has approved the proposal as per following:
- To provide additional equity support of Rs. 5,300 crore to IIFCL in the financial year 2019-20 through regular budgetary support and / or through issuance of recapitalisation bonds as per terms and tenor,including status with regard to repo-ability / Statutory Liquidity Ratio (SLR) status as well as the manner and timing of their issuance and placement, as decided by the Department of Economic Affairs.
- The corresponding increase in authorised capital of IIFCL from Rs. 6,000 crore to Rs. 10,000 crore.
Major Impact
This will enable IIFCL to create requisite headroom for borrowing, thus enabling it to finance big ticket infrastructure projects in line with Government of India’s target to invest Rs. 100 lakh crore in infrastructure sector over the next five years.
Background
IIFCL, a wholly-owned Government of India (GoI) company set up in 2006, is the principal entity which provides long term finance to viable infrastructure projects across sectors. It is a Non-Banking Financial Company – Infrastructure Finance Company (NBFC-IFC) registered with RBI since September, 2013.
Government has announced its intention to invest Rs. 100 lakh crore in infrastructure over the next five years. Infrastructure investment to this extent will require large amount of equity and debt. The role of IIFCL in making debt funding possible will be crucial as participation by IIFCL in funding a project opens up possibilities of co-financing by other lenders including larger banks. It is therefore necessary to infuse additional capital in IIFCL to enable it to fulfil its mandated role of financing major infrastructure projects.
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