IFCI Ltd is seeking to become a development financial institution as it would lower its cost of funds. The company will place a proposal with the government seeking the tag of a 'developmental financial institution' which could raise its credit rating and make its securities attractive to investors.
IFCI is turning around its fortunes with a net profit of Rs 508 crore in the last fiscal year. It raised about Rs 300 crore in a tax-free bond sale. This year, it is seeking to raise about Rs 2,000 crore through same securities, if the government permits. IFCI continued with its lending with funding from the wholesale market, but shrunk its size as more competitive banks were taking its clients away.