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IFCI to sell half of venture cap arm to US funds

Sidhartha

Financial institution IFCI Ltd has decided to sell about 50 per cent stake in its venture capital subsidiary IFCI Venture Capital Funds Ltd to two US-based VC funds at a consideration of around Rs 650 million.

While the exact details are being worked out, IFCI executives told Business Standard that the board at its last meeting on March 27 cleared a proposal to sell up to 50 per cent stake to Boston-based Voyager Venture Partners and The Satvik Fund, headquartered in San Jose, Silicon Valley.

When contacted, IFCI chairman VP Singh said, "We are negotiating with a few companies and the details are being worked out. If the partner is formidable, we are open to giving majority control."

IFCI holds 76 per cent stake in the venture capital company, with UTI holding 12.7 per cent stake, the Tata group 8 per cent and IL&FS, which has 3.2 per cent stake. IVCF was formed about three years but was in existence even earlier in the form Risk Capital and Technology Finance Corporation.

Sources said that the IFCI board has authorised that the equity shares be sold at around Rs 16.5 per share a premium of Rs 6.50 a share. The book value of these shares is estimated to be Rs 11.15.

They added that reduction in stake in IVCF is part of the plan to restructure the Delhi-headquartered financial institution after Singh took over as the chairman and managing director last year.

Meanwhile, IFCI has informed the Bombay Stock Exchange that it has decided to acquire 2.7 million equity shares of Foremost Factors Ltd at a consideration of Rs 5.8 million an authorised dealer for export factoring and raise its stake to 49.84 per cent from the present 36.25 per cent.

The shares were acquired from Bank of America at Rs 2.14 per share. The decision was taken at the last board meeting.

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