The Union Cabinet on Monday cleared raising its stake in IFCI ltd to 51 per cent by infusing Rs60 crore in the country's oldest financial institution. "The Union Cabinet chaired by Prime Minister, Narendra Modi, approved infusion of Rs60 crore in Industrial Finance Corporation of India (IFCI) ltd to make it a Government company by way of acquisition of preference shares from existing shareholder(s)," an official statement said.
IFCI 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 The Act has since been repealed by the Industrial Finance Corporation (Transfer of Undertaking and Repeal) Act, 1993 and IFCI ltd was registered under the Companies Act, 1956 on March 31, 1993, it said.
The current shareholding of Government of India in IFCI after inclusion of the preference share capital was 47.93 per cent, it said. Therefore, IFCI is not a Government Company under section 2(45) of the Companies Act, 2013.
A contribution of Rs60 crore to the capital of the company would raise the shareholding of the Government to 51 per cent. The Finance Ministry had sought the Cabinet approval to hike its stake in the IFCI to 51 per cent by pumping in Rs60 crore, and make it a 'Government company'.