Post exercise of conversion option of Rs 923 crore OCDs into equity at par, the holding of Government will become 55.57% and by including the holding of Banks/FIs, it will be 68.31% making it a Government company.
The Industrial Finance Corporation of India (IFCI) was converted into a company incorporated under the Companies Act, 1956 on 31.3.1993.
It was then decided that holding of Government controlled institutions in IFCI should be maintained above 51%.
The equity holding of Public Sector-Banks / Financial Institutions / Insurance Companies remained over the threshold limit of 51 percent till March 2004. Thereafter dilution in the holding took place in 2005 and it came below 51%.
To look into issues concerning IFCI and suggest a way forward, a Committee of Secretaries was constituted, headed by the Finance Secretary and comprising of Secretaries from the Departments of Economic Affairs, Expenditure and Financial Services.
The Committee, after due consideration and taking into account all the facts, has inter-alia recommended to convert the OCDs of Rs.400 crore and Rs.523 crore into equity at par and that the Government need not make an open offer to the shareholders of IFCI.