IDFC sees loan disbursements to grow only 15% this fiscal

Infrastructure Development Finance Company (IDFC) today said it is looking at just about 15% growth in loan disbursements in 2011-12, sharply down from the last fiscal, but expects to grow at a faster rate from next year.

"This fiscal, we expect our disbursements to increase by around 15%. In 2010-11, the growth was 50%," IDFC Executive Director Vikram Limaye told PTI on sidelines on a company event.

"However, with the government targeting infrastructure development in a major way during the coming 12th Five Year Plan (2012-17), we expect improvement from next fiscal onwards," he added.

It cited slowdown in the power sector as the major reason for dip in growth of disbursements.

"In the last 12 months, there has been a major slowdown in the power sector and it is likely to continue for another year. As power sector is our major area of financing, there is an impact on our overall outstanding disbursement also," Limaye said.

IDFC had an outstanding disbursement of Rs 41,823 crore in 2010-11, up from Rs 27,885 crore in 2009-10.

While 42-43% of total loan of IDFC is for the power sector, around 24% is for transportation and telecom sectors each.

"Hopefully, from the next fiscal onwards the growth rate will improve further. The government has fixed an ambitious target of $1 trillion investment in infrastructure during the 12th Plan and this should boost the sector," he said.

Limaye, however, said that uncertainties in policy decision, including issues like land acquisition, have to be addressed for faster development of infrastructure.

"There are areas like urban infrastructure, Railways, logistics and supply chain for agri-products and related fields where investments currently are very low. Besides, we are also focusing on road development," he said.

IDFC today also announced the public issue of its tax- saving long-term infrastructure bonds.

The bond issue is open for subscription from today till December 6 for retail investors, the company said.

It is the first tranche of bonds by the infra firm which aims at raising up to Rs 5,000 crore this fiscal.

In 2010, the company had received the IFC, or infra finance company, status within the NBFC category from the RBI.

The five-year issue carries a coupon of 9%.

Last fiscal, IDFC had raised Rs 1,451 crore from over 7.3 lakh retail investors.

IDFC had posted a net profit of Rs 524 crore for the September quarter, 55% up over the same period last year. Its total income rose 41% to Rs 1,715 crore in the same period.

Source: Business Standard