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PRESS TRUST OF INDIA
NEW DELHI, May 30: The Industrial Finance Corporation of India (IFCI) will focus on sector specific lending, venturing into new areas with emphasis on asset liability management as part of its strategy to improve its sagging bottomline.
The financial institution, which reported a massive drop in its profitability in 1998-99 and a substantial rise in its non-performing assets (NPAs), has chalked out a detailed programme to restructure its loan portfolio as well as resort to short term funds including fixed deposits.
``IFCI has predominantly been in project finance. Factors such as lack of investment demand for many traditional industrial projects, resource constraints on promoters and increasing competition have necessitated a shift to other products and diversification,'' IFCI chairman and managing director P N Narasimham said.
IFCI which registered a 93 per cent fall in its net profit during 1998-99 to Rs 23.5 crore as against Rs 370.5 crore in the previous year, is targeting a profit of Rs 250 crorein the current fiscal.
The target has been set keeping in view IFCI's plan to explore new areas like bill discounting, trade financing and working capital financing.
The corporation also plans to reduce its NPAs from the current level of Rs 4,220 crore or 20.85 per cent of its total business assets to a manageable level, he said.
Narasimhan said IFCI had identified sunrise industries like roads, ports, information technology, pharmaceuticals, consumers goods for fresh loans in the current fiscal.
However, the corporation would continue to assist the traditional sectors like cement, steel, sugar and textiles on selective basis for their expansion projects.
IFCI's total disbursement in these four sectors has already dropped from Rs 15,637 crore as on March 31, 1998 to Rs 13,708 crore by March 1999.
However, the disbursement to these sectors as a percentage of the corporation's total disbursements has risen marginally from 28 per cent in March 1998 to 29 per cent in 1998-99.
Stating that the Rs2000 crore additional NPAs provided for by the corporation during the fiscal 1998-99 were not on account of any specific sector, Narasimhan said about 50 per cent of these could be recovered in the next two to three years ``IFCI has undertaken a corporate restructuring excercise and set up a separate division for the same,'' he said.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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