IDFC expects growth to slow down to 15% due to uncertainties surrounding infra sector

MUMBAI: Infrastructure finance company IDFC is expecting slower growth of 10-15% this year, mainly due to the uncertainties surrounding the infrastructure sector.

The company expects growth to come from refinancing existing projects and is looking to lend to roads and renewable energy projects. Loan book growth has slowed to 16% in 2012-13 to 56,595 crore. Disbursements dropped by 4% while approvals reduced by 17% during the year.

"We are expanding market share by refinancing projects that are post construction," said Rajiv Lall, IDFC executive chairman. "We are expecting road sector prospect will improve and there might be some green field financing in road sector."

It has also started the process of applying for a banking licence. The Reserve Bank of India has asked interested entities to apply by June 30.

"We have started the process and we are examining the business plan very carefully," said Lall. "We believe there is a serious opportunity for non-banking finance companies like IDFC to transform into a profitable bank that will serve the objective laid out by RBI including the priority sector."

Assets under construction, particularly in the power sector are stranded for lack of fuel and availability of coal. It has marginally brought down its exposure to power from 43% to 41% amid uncertainties on the viability of projects.

The firm expects decisions regarding renewal of existing telecom licences to be sorted out in 6-8 months. "That will allow return to normalisation of business," Lall said. Other big sectors the firm has exposure to are transportation 26% and telecom 23%.