The government plans to infuse about Rs 2,000 crore ($242 million) into state-run IFCI Ltd, Bloomberg reported, quoting sources familiar with the development. The report goes on to suggest that the plan is to merge IFCI with its unit, Stock Holding Corp of India, in an attempt to rescue the lender.
IFCI incurred losses for at least four straight years until March 2022, and in the past one year alone, it lost over 17 percent of its market capitalisation. Earlier in July, Care Ratings flagged a rising NPA ratio and persistent losses at IFCI as a cause for concern.
The capital infusion plan is aimed at reducing the debt burden before the merger, according to Bloomberg.
The share price of IFCI grew by 20 percent from its opening price today, after the announcement.