India Infrastructure Finance Company's net profit has more than doubled to Rs 678 crore (Rs 330 crore) for the year ended March 31, 2012, aided by a big jump in net interest margin.
This bottomline performance has encouraged the company to aim for a net profit of Rs 900 crore for the current fiscal, Mr S. K. Goel, Chairman and Managing Director, IIFCL, said at a press conference here.
Mr Goel attributed the strong net profit performance in 2011-12 to robust growth in total revenues supported by lower growth in total expenses.
While total income recorded 34 per cent increase at Rs 2,692 crore (Rs 2,008 crore), total expenses grew just 9 per cent to Rs 1,648 crore (Rs 1,516 crore). The net interest margin grew to 3.57 per cent in 2011-12 from 2.17 per cent in the previous year.
Mr Goel said that IIFCL will this fiscal mobilise about Rs 10,000 crore from the domestic market through tax-free bonds. This will be done in two tranches with the first tranche of Rs 5,000 crore likely to be raised this quarter. The bonds would be issued to retail and institutional investors, he said.
Backed by sovereign guarantee, IIFCL, a government company, has been able to raise low-cost long-term resources both from domestic markets as well as multilateral institutions.
These funds have been deployed for infrastructure loans at current rates during the tightened interest rate regime in 2011-12, IIFCL officials said when asked to explain this big jump in margins.
IIFCL has so far raised Rs 16,691 crore from domestic markets through a mix of instruments comprising domestic bonds, tax-free bonds for providing re-finance, long-term loan from LIC and tax saving infrastructure bonds.
Over the last five years, the company's net profit has grown from Rs 7.17 crore in 2006-07 to Rs 678 crore in 2011-12. IIFCL's infrastructure loan book has grown by 35 per cent to Rs 20,832 crore from Rs 15,414 crore in the previous year.