India Infrastructure Finance Company Limited (IIFCL) has returned to Profitability with a Standalone Profit After Tax (PAT) of ₹286 Crore and Consolidated PAT of ₹325 Crore in Fiscal Year 2020-21, exhibiting a significant improvement over last year. During the year, the Company posted record performance with highest ever sanctions and disbursements at ₹20,892 Crore and ₹9,460 Crore, respectively, on a standalone basis.
Improvement in Asset Quality and Recovery
IIFCL has been able to arrest the declining asset quality trends and achieve a notable reduction of Gross NPA to 13.90% as on 31st March 2021 (down from 19.70% in previous year) and Net NPA to 5.58% as on 31st March 2021 (down from 9.75% in previous year). Cash recovery in NPAs increased to over ₹625 crore in fiscal year 2021, which is a whopping 92% higher than last year. IIFCL also managed to significantly lower its cost of funds in FY 21, resulting in better financial health.
Strengthened Loan Portfolio
Despite the challenges faced in view of the Pandemic during the year, IIFCL has managed to grow its stand-alone portfolio by ~9% in FY 21, as compared to FY20. IIFCL plans to aggressively capture an increased market share by keeping its pricing competitive and lowering down base rate to attract more business and further strengthen its portfolio. IIFCL is now in the process of bringing in a market-oriented dynamism in all its activities, with an improved credit policy, segmented risk-based pricing, enhanced efforts for recovery, an active treasury management and digitalization of monitoring of projects for ensuring progress linked disbursements in projects.
Impact of IIFCL since inception
Till March 2021, IIFCL has participated in ~620 projects with a total outlay of over ₹ 10 lakh crore, providing financial assistance to over 26% of PPP projects in the country. This has, inter alia, delivered the following salient enabling impacts.
Roads and Highways: 28,500 kms of road development viz 21% of NH capacity
Ports: 800 MT of port capacity development viz 52% of India’s major port capacity
Conventional Energy: 65 GW of energy addition viz; 17% of India’s installed capacity
Renewable Energy: IIFCL has expanded its assistance to renewable energy sector with sanctions of ~₹ 15,293 Cr & Disbursements ₹ 8,340 crore
Airports: Development of Major International Airports- Delhi, Mumbai, Hyderabad and more.
Strategic Intent for the Future
Being the only financial institution in the country working in all the sub-sectors of Infrastructure sector, IIFCL aims to strengthen its business development efforts while actively engaging with developers, authorities, regulators, state and central government. IIFCL aims to leverage on the expected surge in operational projects to increase its Takeout Finance portfolio. Further, the company aims to offer products at competitive rates, raise funds of upto ₹15,000 crore from the market and continue its thrust in recovery of bad loans. Keeping with its strategic intent to strengthen the monitoring and surveillance systems through digitalization, IIFCL is in the process of putting in place an Online Project Monitoring System (OPMS), a first of its kind in India, for real-time project monitoring during construction phase by integrating high end solutions like Drones, AI etc. IIFCL is also making efforts to reduce the lead time in the entire value chain by implementing an Integrated IT Solution to enhance customer satisfaction. Further, IIFCL is in the process of establishing an in-house research and advisory wing, which would enable IIFCL in further bolstering its capabilities to provide policy advocacy, feedback, remedial action, innovative products and processes to Government, Regulatory Bodies, Project Authorities and other stakeholders.
