India's infrastructure finance giant files for public offer

India's Infrastructure Development Finance Company (IDFC) has filed for an initial public offer (IPO) to meet capital adequacy requirements and finance more projects in a country in need of money for roads and power plants.

According to IPO papers filed yesterday with the market regulator, the eight-year-old IDFC plans to offer 403.6 million shares, comprising about 36 per cent of its post-issue equity.

It will price the 120 million new shares and 283.6 million shares to be sold by existing shareholders at a later date.

The project lender approved plans for an IPO last September in which existing shareholders would sell up to 30 per cent, and bankers said at the time it could raise up to Rs5 billion (Dh419 million).

With its fresh funds, IDFC will find plenty of lending opportunities, whether it be to improve roads, telecom or power generation in a country trying to attract money from abroad.

Foreign companies commonly cite poor infrastructure as one of the biggest business obstacles in India, which attracted about a twelfth of the $55 billion (Dh202 billion) in foreign direct investment that poured into China in the 11 months to the end of February. The government relies on the private sector to help finance roads, ports and other infrastructure.

Multinational agencies such as the Asian Development Bank and the International Finance Corporation, an arm of the World Bank, own another 40 percent. The rest is held by ICICI Bank, State Bank of India and other Indian financial groups.

The company

Providing channel funding since 1997