IFCI - IFCI

📊 NSE: IFCI 🏢 Finance - Term-Lending Institutions 📅 Last Updated: 12/14/2025 7:55

💰 Financial Performance

Revenue Growth by Segment

Standalone total income decreased by 5.92% from INR 895 Cr in FY24 to INR 842 Cr in FY25. For H1 FY26, interest income contributed INR 136.36 Cr (41.2% of total), dividend income INR 80.09 Cr (24.2%), and net gain on fair value changes INR 69.41 Cr (21.0%). Interest income specifically declined 18.18% YoY from INR 429 Cr in FY24 to INR 351 Cr in FY25 due to the continued rundown of the loan book and lack of fresh disbursements.

Geographic Revenue Split

Not disclosed in available documents. The company operates primarily as a Government of India-owned development financial institution headquartered in New Delhi.

Profitability Margins

Net Profit (PAT) declined by 65.89% from INR 129 Cr in FY24 to INR 44 Cr in FY25. PAT margin for FY25 stood at 5.22%. Profitability is primarily driven by recoveries from Stage 3 assets and non-interest income (dividends and fees) rather than core lending, as Net Interest Income (NII) has remained negative for three consecutive years.

EBITDA Margin

Not explicitly disclosed as EBITDA, but Return on Managed Assets (ROMA) moderated from 1.35% in FY24 to 0.45% in FY25 and further to 0.36% in Q1 FY26. This decline is caused by the shrinking interest-earning asset base against fixed interest-bearing liabilities.

Capital Expenditure

Not disclosed in available documents as the company is a financial institution; however, the Government of India infused INR 1,000 Cr of equity in FY25 and an additional INR 500 Cr was received during the same period to bolster the capital structure.

Credit Rating & Borrowing

Ratings are currently on 'Rating Watch with Developing Implications' (RWD) by ICRA and Brickwork. Borrowing costs are high as interest-bearing liabilities of INR 4,362 Cr significantly exceed the standard net loan book of INR 80 Cr, leading to a negative NII on a cash basis.

⚙️ Operational Drivers

Raw Materials

Capital/Funds (100% of operational input). The cost of funds is the primary driver of the negative interest spread.

Import Sources

Domestic capital markets and Government of India equity infusions.

Key Suppliers

Government of India (72.57% shareholder), various bondholders, and banks.

Capacity Expansion

Lending operations have been halted since FY2022 due to capital constraints. Future capacity depends on the proposed consolidation of group entities including Stock Holding Corporation of India Limited (SHCIL), where IFCI holds a 52.86% stake.

Raw Material Costs

Interest expenses on debt of INR 4,362 Cr represent the primary cost. The company is unable to offset these costs as fresh disbursements remain at nil.

Manufacturing Efficiency

Not applicable. Operational efficiency is measured by recovery from NPAs; Provision Coverage Ratio (PCR) stood at 69.37% as of March 31, 2025, down from 90.62% in FY24.

Logistics & Distribution

Not applicable.

📈 Strategic Growth

Expected Growth Rate

Not disclosed in available documents

Growth Strategy

The company is pursuing a 'Consolidation of IFCI Group' plan recommended to the GoI on July 14, 2025. This involves merging Stock Holding Corporation of India, IFCI Factors, and IFCI Infrastructure Development with IFCI to create a stronger resultant entity with improved capital adequacy and business synergies.

Products & Services

Corporate loans (halted), advisory services, fee-based monitoring of PLI schemes, and management of the Sugar Development Fund (SDF).

Brand Portfolio

IFCI, IFIN (IFCI Financial Services), StockHolding, IFCI Venture.

New Products/Services

Expansion of fee-based advisory and scheme management services, which contributed INR 20.89 Cr in advisory income for H1 FY26.

Market Expansion

Consolidation of broking businesses under a single direct subsidiary to streamline financial service offerings.

Market Share & Ranking

Not disclosed; the company is a systemically important NBFC-ND-SI but currently has a negligible standard loan book.

Strategic Alliances

Proposed divestment of shareholding in MPCON Limited to the Government of India to focus on core financial consolidation.

🌍 External Factors

Industry Trends

The industry is seeing a shift toward consolidation of government-owned NBFCs to improve capital efficiency and regulatory compliance. IFCI is currently positioned as a recovery and fee-based entity rather than an active lender.

Competitive Landscape

Competes with other government-owned NBFCs and DFIs, though currently restricted by a negative Tier I capital ratio of -21.85%.

Competitive Moat

Sovereign ownership (72.57% GoI stake) provides a durable advantage in resource mobilization and regulatory backing, though this is offset by extremely weak standalone financials.

Macro Economic Sensitivity

Highly sensitive to government fiscal policy and capital allocation, as GoI support is the primary driver of solvency.

Consumer Behavior

Not applicable as the company focuses on industrial and corporate finance.

Geopolitical Risks

Minimal direct impact, though global interest rate trends affect borrowing costs for the NBFC sector.

⚖️ Regulatory & Governance

Industry Regulations

RBI requires a minimum Tier I capital of 10% and CRAR of 15%. IFCI is in breach of these with a Tier I capital of -21.85% as of June 30, 2025.

Taxation Policy Impact

Net deferred tax assets are excluded from Tier I capital calculations, impacting regulatory ratios.

Legal Contingencies

A large proportion of NPAs (Gross Stage 3 assets of INR 4,286 Cr) are under National Company Law Tribunal (NCLT) proceedings. The nodal ministry has restricted the sharing of specific data regarding the Sugar Development Fund (SDF) scheme with auditors.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the timeline and final structure of the GoI-approved consolidation plan, which is critical for restoring capital adequacy above the regulatory minimum.