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Role of idfc_in_infrastucture_finance


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Role of idfc_in_infrastucture_finance

  1. 1. Role of IDFC in infrastructure finance<br />K K JINDAL<br />
  2. 2. INTRODUCTION<br />•It is provider of financial, advisory and management services in the infrastructure space<br />•The Company also has interests in Asset Management, Investment Banking and Brokerage<br />•Incorporated on January 30, 1997 in Chennai on the recommendations of the 'Expert Group onCommercialization of Infrastructure Projects' under the Chairmanship of Dr. RakeshMohan<br />
  3. 3. Contd...<br />Initially IDFC focused on power , roads , ports and telecommunications<br />Now it has broaden its frame work to energy, information technology, urban infrastructure, food and agribusiness infrastructure<br />
  4. 4. Organisational Structure<br />
  5. 5. 4*4 Strategy of IDFC<br />Pursuit of four objectives<br /><ul><li>Delivering Profitability
  6. 6. Pursuing Innovation
  7. 7. Growing its Asset base
  8. 8. Promoting Thought Leadership</li></ul>Focus on four key sectors<br /><ul><li>Transport
  9. 9. Energy
  10. 10. Telecommunications (Telecom) and IT
  11. 11. Industrial and Commercial Infrastructure</li></li></ul><li>4*4 Strategy of IDFC (Contd…)<br />Delivery of four main products<br /><ul><li>Project Finance
  12. 12. Equity Finance
  13. 13. Structured Products
  14. 14. Advisory/ Investment Banking Services</li></ul>Exploration of four new frontiers<br /><ul><li>Urban Services
  15. 15. Rural Infrastructure
  16. 16. Food Business Infrastructure
  17. 17. Agri Business Infrastructure</li></li></ul><li>About IDFC Project Finance<br />The core business at IDFC Project Finance is lending to infrastructure projects. The business is capital intensive and focuses on managing the loan book<br />While this creates a base income stream it also provides us with the bridge to clients to build larger and wider customer engagement<br />
  18. 18. IDFC as Infrastructure Finance Co.<br />Infrastructure Development Finance Company (IDFC) the Reserve Bank has classified the company as an infrastructure finance company, which will help the term lender access cheaper resources.<br />IDFC has been classified by the Reserve Bank of India as infrastructure finance company within overall classification of Non Banking Finance Company (NBFC), the term lender informed the Bombay Stock Exchange.<br />The status given to the company would allow it mobilize funds at lower cost and get flexibility in the infrastructure lending, sources said.<br />
  19. 19. Role of IDFC<br />Objective : Providing and promoting private financing of Indian infrastructure.<br />Products under Project Finance:<br /><ul><li>Senior Debt Financing
  20. 20. Mezzanine Products
  21. 21. Principal Investments
  22. 22. Non-fund based Products</li></li></ul><li>IDFC – Investment Banking<br />Category-1 Merchant Bank<br />Private placements of equity and debt, public offerings and project advisory to mergers and acquisitions.<br />Amongst the most prominent Indian brokers for institutional investors.<br />Cater to a wide variety of investors including Pension Funds, Long-only Funds, Hedge Funds, Mutual Funds, Banks, Insurance companies and Portfolio Management companies.<br />
  23. 23. Alternate Asset Management- IDFC Private Equity<br />Set up in 2002<br />IDFC is India’s largest and most active private equity firm focused on infrastructure and manage a corpus of Rs. 60 billion (USD 1.3 billion).<br />Through these funds, IDFC has invested in companies whose underlying assets range from ships, airports, trucks, power plants and telecom towers to hotel rooms, amusement parks, roads and bridges, gas pipeline, clean energy and rail container licenses.<br />
  24. 24. Alternate asset management- IDFC Private Equity (Contd…)<br />IDFC manages the India Infrastructure Fund (IIF), a SEBI- registered domestic venture capital fund focused on infrastructure with a corpus of INR 38 billion(USD 927million).<br />IIF focuses on investing equity for the long-term in a diversified portfolio of infrastructure assets in India.<br />To identify and invest in exceptional mid-market growth-oriented private equity funds in the Asian emerging markets of China, India, Central Asia, and SoutheastAsia.<br />
  25. 25. Alternate asset management- IDFC Projects<br />IDFC Projects delivers a strong value proposition in developing and implementing infrastructureprojects.<br />IDFC works in active collaboration with Central and State Governments as well as private sectors to develop, finance, execute and manage infrastructure projects in India.<br />
  26. 26. Public Market Asset Management- IDFC Mutual Funds<br />IDFC Mutual Fund was acquired in 2008-09.<br />It manages different mutual fund products for institutional and retail investors.<br />Generates income through asset management fees.<br />Focuses on growing the assets under management by offering suitable products and channeling private and corporate savings into the debt.<br />
  27. 27. Risk Management<br />Three kinds of risks:<br /><ul><li>Market Risk
  28. 28. Credit Risk
  29. 29. Operational Risk</li></ul>Implements an Enterprise Risk Management (ERM) framework that adopts an integrated approach to manage all the three types of risks.<br />There is focus on loan portfolio assessment, Asset-Liability Management (ALM), and loan pricing.<br />
  30. 30. Risk Management (Contd…)<br />On the credit risk front, there is a comprehensive portfolio review of all project assets and equity investments of the Company on a semi-annual basis.<br />Management of Market Risk involves measuring interest rate risk on a regular basis as well as testing newer models for analysis.<br />
  31. 31. Awards and Recognition<br />Project Finance International Asia Pacific Awards 2009<br />Private Equity International Awards 2009<br />Asia Money Brokers poll<br />Crisil Ratings<br />Infrastructure Investor Awards 2009<br />Lipper Fund Awards 2010<br />ICRA Awards 2009<br />Economic Times Quarterly Mutual Fund Tracker<br />
  32. 32. Approvals and Disbursements<br />Disbursements has almost doubled from 2006 to 2010<br />Approvals have almost tripled from 2006 to 2010<br />
  33. 33. Financial Performance of IDFC<br />The Net Worth of the company has grown from Rs. 2544 cr to Rs. 6823 cr in the last five years<br />The Total Assets of the company have also grown by almost 2.8 times in the last 5 years<br />
  34. 34. Performance of IDFC<br />The sales of the company has been increasing over the years<br />Operating Profit for the company has increased by almost 3 times in the last 5 years<br />Over the last years, the size of balance sheet has increased 132%<br />It increased by 12.6% in FY 2010 compared to FY 2009<br />
  35. 35. Thank You<br />