IFCI sells 24% stake in TFCI for Rs 290 crore

Mumbai: State-run term lending financial institution, IFCI, sold 24% of its stake in Tourism Finance Corporation of India for a consideration of Rs 290 crore in an attempt to bolster its capital as the government funding to many lenders are drying up.

Redkite Capital, a non-banking finance company, and a former banker Sajeeva Thomas, have jointly acquired the 24% stake in a deal that was priced at Rs. 150 apiece, a 3.5 percent premium to its previous close. TFCI ended 2.2 percent lower at Rs. 142.05.

The company had 26% stake in the TFCL which was on block since May 2017. The sale of shares will help IFCI shore up its earnings in the September quarter. IFCI had reported a loss of Rs 276 crore in quarter ended June 2017. IDFC Bank was the advisor to IFCI for this deal.

State-run lenders from IDBI Bank to State Bank of India are reducing their holdings in non-core business to improve their capital position. While in some cases, the lenders are exiting completely, or in cases like SBI, the bank is reducing holdings in ventures like life insurance through initial public offering.

Redkite Capital is a Delhi based finance company which specialises in wholesale lending business, while Sajeeva Thomas, a former employee of Japan’s Shinsei Bank, said people familiar with the matter. The two could not be immediately reached for comment.