IFCI Seeks Government Approval to Consolidate Group Firms in Strategic Overhaul

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State-run non-banking financial company IFCI Ltd has formally sought approval from the central government to consolidate its subsidiaries in a phased manner. The move is part of a broader restructuring aimed at streamlining operations and improving financial performance.

According to officials familiar with the development, IFCI’s consolidation strategy involves merging key subsidiaries into the parent company to create a more efficient and unified corporate structure. The plan is set to unfold in two stages. The first phase will focus on merging core businesses such as IFCI Factors, IFCI Infrastructure Development Ltd, and Stock Holding Corporation of India. The second phase may include remaining smaller entities providing advisory and custodial services.

A senior official noted that the proposal was initially granted in-principle clearance by the government in 2023. The company is now awaiting final approval to begin the formal integration process. The goal is to enhance operational efficiency, eliminate redundancy, and strengthen financial stability.

The consolidation plan aligns with the government’s earlier capital infusion of ₹500 crore into IFCI. This financial support is seen as a precursor to the reorganization and is expected to help bolster IFCI’s balance sheet during the transition period.

Additionally, IFCI is considering the divestment of its stake in MPCON Ltd, a public sector consultancy firm, as part of the realignment. This step would help the company exit non-core areas and focus on its primary lending and infrastructure financing roles.

Industry experts say the move is timely, given the increasing need for public financial institutions to adapt to a more competitive and technology-driven market. “A simplified group structure will likely improve investor confidence, allow faster decision-making, and create opportunities for better capital deployment,” said a financial analyst tracking government-owned NBFCs.

The proposed consolidation is expected to begin in late 2025, pending regulatory clearances. If approved, IFCI’s restructuring could serve as a model for similar reforms across other public sector financial institutions.