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The Government is likely to infuse Rs 1,000 crore in India Infrastructure Finance Company Ltd (IIFCL) shortly to boost its capital.
The equity support to the tune of Rs 1,000 crore for IIFCL is expected to be complete in the next two months, sources said.
The proposed capital infusion is keeping in view the business programme and capital requirement, the sources added.
To facilitate capital infusion, the Union Cabinet approved raising the authorised capital of IIFCL to Rs 5,000 crore to enable it to lend more to the infrastructure sector.
The authorised capital of the company is Rs 2,000 crore of which, paid up capital at present is Rs 2,000 crore. Besides, a provision has also been made to increase it to Rs 8,000 crore, subject to the approval of the Finance Minister.
Increase in the authorised capital would enable IIFCL to expand its financial assistance (capability) to infrastructure sector and meet the needs of increased Capital for Risk Weighted Assets Ratio (CRAR).
The Government also decided to bring IIFCL under the Reserve Bank’s regulatory oversight to enhance professional capability and increase capital base.
IIFCL provides funds, especially debt of longer-term maturity, directly to the eligible project to supplement other loans from banks and financial institutions.
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