IFCI shares surge over 3% as firm seeks govt nod for consolidation of group companies

Shares of IFCI surged 3.51% to close at ₹62.85 apiece on Monday, July 14, as the state-owned firm sought the government's go-ahead for the consolidation of its various group entities, including the broking business.

In a regulatory filing on Monday, the company informed that its board has recommended to the Government of India for approval of the Group Consolidation in two stages.

Based on the in-principle approval received from the Government of India to consider 'Consolidation of IFCI Group' dated November 22, 2024, which entailed the merger/amalgamation of IFCI and StockHolding Corporation of India and other group companies of IFCI, the company had appointed a Transaction Advisor for carrying out the consolidation process.

As per the evaluation of the Transaction Advisor, the Board of IFCI Limited at its meeting held on Monday has recommended to the Government of India for approval of the Group Consolidation, IFCI said.

Under the consolidation at the company level (Merger 1), the company has proposed the consolidation of StockHolding Corporation, IFCI Factors, IFCI Infrastructure Development, and IIDL Realtors with IFCI Limited, the listed entity.

"IFCI Limited (the consolidated entity) is proposed to remain as an NBFC and will continue to explore opportunities in custodial services, e-stamping, advisory, etc., along with lending," the filing said.

The company has also sought approval for the consolidation of StockHolding Services, IFCI Financial Services Limited, IFIN Commodities Limited, IFIN Credit Limited, and IFIN Securities Finance Limited into a single entity, which will be a direct subsidiary of IFCI Limited, i.e., the consolidated listed entity (Merger 2).

It has also proposed that other group entities may continue as direct subsidiaries of the company.

"The Board further recommended divestment of IFCI's shareholding in MPCON Limited, a direct subsidiary of IFCI Limited, to the Government of India for approval," the filing said.

IFCI said the consolidation and divestment are subject to the applicable regulatory/statutory approvals and applicable laws, rules, regulations, guidelines, frameworks, and standards.

IFCI shares have surged nearly 15% in the last six months, while since the beginning of the year, they have gained 1.3%.

The company’s market capitalisation stands at ₹16,933.77 crore.