TestCloud – Govt Exam Preparation for Banking, SSC, UPSC

DFS Allocates Rs 500 Crore Capital Infusion to IFCI through Preferential Issue (PREF).

Banking & Finance | Dated: 28 Jan 2025

In January 2025, the Department of Financial Services (DFS) under the Ministry of Finance (MoF) released a capital infusion of Rs 500 crore to IFCI Limited (Industrial Finance Corporation of India), a development finance institution (DFI based in New Delhi).

🎯 Key Highlights:

- The infusion, made through the Preferential Issue (PREF) of shares for the Financial Year 2024-25 (FY25), is intended to strengthen IFCI's financial health in anticipation of its upcoming restructuring and consolidation into a larger group.
- In December 2024, the capital infusion plan for IFCI was approved with the first Supplementary Demand for Grants for FY 25 in the Lok Sabha. Subsequently, in January 2025, the Department of Financial Services (DFS) received approval from the President of India, Droupadi Murmu, to release Rs. 500 crore to IFCI Ltd.
- With this capital infusion, the Government of India (GoI) is expected to raise its stake in IFCI beyond the current 71.72% as of September 2024.

💡 Other Important Facts:

(i) A preferential issue occurs when a company issues shares or convertible securities to a specific group of investors, instead of offering them to the general public.
(ii) This method is typically used to raise capital and can involve offering shares to existing shareholders, venture capitalists, or strategic partners.
(iii) In November 2024, the Ministry of Finance (MoF) granted in-principle approval for the 'Consolidation of IFCI Group,' which involves the merger or amalgamation of IFCI Limited, StockHolding Corporation of India Limited, and other group companies.

📚 Test Your Knowledge:

Which department recently allocated Rs 500 crore capital infusion to IFCI through a Preferential Issue (PREF)?

Correct Answer: DFS

🚀 Quick Recap:

About IFCI Limited

Deputy Managing Director (DMD) : Rahul Bhave
Headquarters : New Delhi