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Turnaround Solutions

Posted by Sathyamurthy www.sathyamurthy.com on February 3, 2007

If you are looking at a multibagger in this heated market which is inching closer to 15K and is doubtful if there are any such multibaggers left.  Read on.  You can take a safe bet on IFCI, the surviving pure development financial institution with mouth watering stakes in some of the best companies in the country including National Stock Exchange and ICRA besides stakes thru loans converted into equity over the years and hold on many properties pledged as collateral.
At Rs.25 its a mega BUY and if you don't do it now, after 5 years you will brood not acting even after reading this blog.  I have blogged.  Now you have to log in for mega profits from your investments.
IFCI is back in the black, but what's its game plan?
After spending five years in the red, the country's oldest development financial institution (DFI), IFCI, is back with a bang. Not only has it shown a profit for the first half of 2006-07, last fortnight, it also received a Rs 780-crore bonanza from the sale of its stake in the National Stock Exchange. And there may be more good news in store.
Credit rating agency ICRA, in which IFCI has a 21 per cent holding, is slated to hit the capital market some time this year. IFCI has already informed the bourses of its intention to offload its stake in ICRA.
IFCI also owns 19 per cent in the listed Travel Finance Corporation of India (TFCI); that holding is valued at some Rs 25 crore at current prices. Although there are no concrete proposals to sell equity in other smaller companies, IFCI says in the normal course of business it keeps on disinvesting, in small quantities, its holding in listed companies through stock exchanges.
What's most heartening for IFCI, however, is the turnaround. "Concerted efforts on the recovery front and restructuring of liabilities have helped in the turnaround of the institution," says Sanjoy Chowdhury, Chief General Manager at IFCI. Over the longer term, though, the problem for IFCI is that it still dabbles in project finance and project advisory, where the scope of returns is limited.
Which is why contemporaries like ICICI Bank and IDBI have today become full-fledged banks, with a sharp focus on retail banking. However, a former IFCI director feels IFCI can hold its own as a DFI. "There is a void created in the DFI space in India. Globally we have established DFIs like 3i in the UK, KFW in Germany and Japan Development Bank (JDB) in Japan," he maintains. Yet, to ensure IFCI's survival, a long-term game plan needs to be chalked out. "The options on the table are a merger with a stronger institution or a strategic partner," says a top official of IFCI.
Thanks – Business Today

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