IFCI Full Form - Embibe
  • Written By Team_Embibe
  • Last Modified 26-07-2022
  • Written By Team_Embibe
  • Last Modified 26-07-2022

IFCI Full Form 

The IFCI full form in English is Industrial Finance Corporation of India, whereas, in Hindi, it stands for भारतीय औद्योगिक वित्त निगम. IFCI is primarily known as the development finance institution which operates under the purview of the Ministry of Finance. It is a statutory corporation that was established in 1948 and is currently administered by the Government of India. 

IFCI is also listed with the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) as a public company and it currently operates with seven subsidiaries along with an associate. Providing all the necessary financial support to stimulate the overall growth and development of industries that are operating across the spectrum is the major objective of IFCI. 

Nature and Composition of IFCI 

IFCI operates in the public sector as one of the predominant non-banking finance companies. Mr. Manoj Mittal is currently fulfilling his duties as the MD & CEO of the organisation. He has worked for organisational growth & profitability for over three decades in the industry. Mr. Mittal has also worked at the Small Industries Development Bank of India (SIDBI) as the deputy managing director (Jan 2016-Jan 2021). The current deputy managing director of IFCI is Mr.Sunil Kumar Bansal who is a chartered accountant by profession. 

IFCI officially became a full-fledged public limited company right after the IFC act was repealed in 1993. It was registered under the suitable Companies Act, of 1956 and currently operates as a government company. IFCI has also been registered with the central bank of the country, the Reserve Bank of India (RBI) which is commonly referred to as ‘Systemically Important Non-deposit taking Non-Banking Finance Company (NBFC-ND-SI)’. In addition to this, the organisation is also regarded as a public financial institution that falls under section 2(72) of the companies act, 2013. Currently, the Government of India holds 61.02% of IFCI’s paid-up capital. 

Currently, the insurance sector, co-op banks, scheduled banks, and the Industrial Development Bank of India (IDBI) are some of the prominent stakeholders of IFCI. Furthermore, the overall authorised capital of IFCI is currently estimated to be about 250 crores which can be increased by the central government whenever it deems necessary. 

Functions of IFCI 

Below mentioned are some of the main functions of IFCI: 

  • IFCI facilitates the industrial and manufacturing concerns with medium & long-term loans and advances. A profound background study is carried out before any loan is sanctioned in favour of the borrower and several factors are taken into consideration for that purpose. IFCI studies the overall relevance of the industry in the national economy, the total cost of the plan/project, the overall quality of the proposed products along with the management of the company. The loan is granted only when such factors are in alignment with the requirements of IFCI. 
  • The organisation can also subscribe to the different company debentures that are frequently issued in the market. 
  • IFCI also works towards providing guarantees against the loans which are taken by different companies. 
  • IFCI can opt for underwriting the securities whenever a company issues shares or debentures in the capital market. 
  • Providing the necessary guarantees against the deferred payments is also done by IFCI under the circumstances where the loan is sanctioned from any foreign bank which is usually done in foreign currencies. 
  • Merchant Banking & Allied Services operates under the administrative control of IFCI which looks after relevant issues like loan syndication, amalgamations, mergers, capital restructuring, etc. 
  • IFCI administers and monitors the activities of its three major subsidiaries, i.e., I-Fin, IFCI Insurance Services Ltd, and IFCI Financial Services Ltd. Promoting the concept of industrialization in the ecosystem is the main objective of IFCI which is carried out through different approaches. 

Areas of Interest 

IFCI focuses on the overall growth, expansion as well as modernization of the industrial sector which has provided a great boost to the import & export industry. It has also worked extensively towards import substitution, energy conservation, and the cause of pollution control. IFCI promotes initiatives that have the potential to generate income even when it seems quite challenging at first. 

Here are some of the areas where the presence of IFCI is felt significantly:

  • Service industries such as hotels, hospitals, restaurants, etc. 
  • Agriculture-based industries that encompass rubber, sugar, paper, etc. 
  • Capital & goods industries such as telecom services, fibres, electronics, etc. 
  • Other relevant industries of the economy like chemicals, cement, and steel. 

IFCI initially commenced its operations in 1997 and the major focus of the organisation revolved around the domestic factoring activities back then. IFCI Factors Limited is one of the major subsidiaries of IFCI which is primarily invested in the main business of factoring. It offers various products in the likes of Purchase Bill Factoring, Advances against Future Receivables, Export Bill Factoring, Domestic Sales Bill Factoring, etc. Moreover, IFCI also facilitates its customers with corporate loans which usually carry a tenure of 1 to 4 years. Such loans are thereby secured by the pledge of shares or tangible collateral. 

Projects and Prominence of IFCI 

IFCI is a prominent company that is highly regarded in the finance sector as it extends a significant level of support in the form of financing activities. Such activities cover a diversified horizon and include extensive projects like roads, airports, real estate, power, and telecom along with covering a large chunk of the manufacturing & service sector. IFCI has been in existence for over 70 years which highlights its efficacy and the level of relevance it holds in the finance sector. It has successfully completed a large number of mega-projects during its existence which has earned it a reputation of being a highly reliable financial institution. 

Below mentioned are some of the widely renowned mega-projects that IFCI recently completed:

  • Adani Mundra Ports
  • GMR Goa International Airport 
  • Salasar Highways 
  • NRSS Transmission
  • Raichur Power Corporation

Among other noticeable activities that IFCI took over, the organisation also played a vital role in establishing numerous market intermediaries in various niches. These include consultancy organisations, entrepreneurship development organisations, stock exchanges, and education & skill development institutes that are spread across the country. 

FAQs on IFCI

Here are some common FAQs on IFCI: 

Q.1) What is the full form of IFCI and under which ministry does it conduct its business?
A.1) The IFCI full form is Industrial Finance Corporation of India and it operates under the Ministry of Finance. 

Q.2) Who is the current MD & CEO of IFCI?
A.2) Mr. Manoj Mittal assumed the office of IFCI as the MD & CEO of the organisation.

Q.3) Name some of the prominent stakeholders of IFCI.
A.3) Industrial Development Bank of India (IDBI), the insurance sector, co-op banks, and scheduled banks are some of the leading stakeholders of IFCI. 

Q.4) What are mega-projects that IFCI is widely renowned for? 
A.4) GMR Goal International Airport, Raichur Power Corporation, Salasar Highways, Adani Mundra Ports, and NRSS Transmission are the mega-projects of IFCI. 

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