The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi, today approved the infusion of ₹ 60 crore in Industrial Finance Corporation of India (IFCI) Ltd. to make it a Government company by way of acquisition of preference shares from existing share holder(s).

Background

Industrial Finance Corporation of India was set up in 1948 as a Statutory Corporation under the Industrial Finance Corporation Act, 1948. The Act has since been repealed by the Industrial Finance Corporation (Transfer of Undertaking and Repeal) Act, 1993 and IFCI Ltd was registered under the Companies Act, 1956 on 31.03.1993. The current shareholding of Government of India in IFCI after inclusion of the preference Share capital is 47.93 percent. Therefore, IFCI is not a Government Company under section 2(45) of the Companies Act, 2013. A contribution of ₹ 60 crore to the capital of the company would raise the shareholding of the Government to 51 percent.

Government company status via infusion and preference share acquisition raising government shareholding above statutory threshold. The Cabinet approved infusion of capital by acquisition of preference shares to raise the Government of India's shareholding in IFCI Ltd. to a majority level so that IFCI qualifies as a Government Company under section 2(45) of the Companies Act, 2013; prior to the infusion the Government's holding including preference capital was reported at 47.93 percent.