15th Finance Commission recommends grants to RLBs in 28 States (See 'Corpbrief') Moong and Urad prices registered jump in April (See 'Corpbrief') IBC - Adjudicating authority can interfere on merit with commercial decision taken by Committee of Creditors (CoC): SC (See 'Legal Desk') Arbitration and Conciliation Act - Enforcement of Malaysian arbitral award doesn't offend public policy of India: SC (See 'Legal Desk') PMLA - In absence of compelling grounds accused can be denied bail on purely speculative and conjectural grounds: HC (See 'Legal Desk') Alstom gets CCI nod for acquisition of Bombardier Transport (See 'Brief') CCI nod to International Flavours for stake in Nutrition & Biosciences (See 'Brief') COVID-19 cases in para-military - Fatality rate is less than 1%: MoS (See 'Brief') Govt quarterly debt up by over 6 lakh crore (See 'Brief') GST - e-Commerce operators liable to be registered (See 'Corpbrief') Dual listing clause in regulations throw problem for startups planning for public offer Users of Practo's platform rose to 17.5 crore due to covid pandemic Citigroup Inc to hire 6,000 young people in Asia over next three years Constitution of the Company Law Committee (See 'Dashboard') BRICS resolves to continue to cooperate in ICT activities on ITU Forum: MoS (See 'Brief') Constitution of India - E-commerce entity is obliged to display information regarding source of goods on its platform: HC (See 'Legal Desk') Arbitration and Conciliation Act - If there are two arbitration clauses in two related agreements between parties, parties should get disputes resolved under main agreement: SC (See 'Legal Desk') Companies Act - Special law IBC, 2016 overrides general law (Companies Acts, 1956 and 2013) in case of winding up petition filed before IBC came into operation: HC (See 'Legal Desk') Extension of tenure upto 16.10.20 of chairperson NCLAT (See 'Dashboard') Circular on Mutual Fund (See 'Dashboard') BHEL inks MoU with SwissRapide AG to bring Maglev Trains to India (See 'Brief') IBBI (Annual Report) Amendment Rules, 2020 (See 'Dashboard') Jindal Steel and Power expects to produce 7.5 million tonnes of alloy this fiscal year to meet overseas and domestic demand Amazon India set up all-women delivery station in Kadi, Gujarat Tata Projects Limited bags project to construct new parliament building at cost of Rs 861.90 crore GST - Breezily e-invoicing amidst COVID-19 - Voicing concerns crawling lately! (See 'The Cob(Web)' Column) Trade Marks Act - Concealment of material facts can lead to modifying/vacating interim relief of injunction: HC (See 'Legal Desk') Arbitration and Conciliation Act - Person rendered incapable of functioning as an arbitrator u/s 12(5) of Act can appoint/nominate an arbitrator in matter: HC (See 'Legal Desk') Listing and trading of units of Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs) on recognized stock exchanges in International Financial Services Centres (IFSC) (See 'Dashboard')

Cabinet nod for increase in authorised capital for IIFCL

Published: Dec 11, 2019


NEW DELHI, DEC 11, 2019: THE Union Cabinet chaired by Prime Minister Mr Narendra Modi has approved the proposal for providing additional equity support to IIFCL to the tune of Rs. 5,300 crore in financial year 2019-20 and Rs. 10,000 crore in financial year 2020-21. This will be done through regular Budgetary support and / or through issuance of recapitalization bonds. The timing, terms and conditions will be decided by the Department of Economic Affairs. The Cabinet has also approved for increasing the authorized capital of IIFCL from Rs. 6,000 crore to Rs. 25,000 crore.

Major Impact:

This will enable IIFCL to create requisite headroom for borrowing, thus enabling it to finance big ticket infrastructure projects in line with Government of India's target to invest Rs. 100 lakh crore in infrastructure sector over the next five years.


IIFCL, a wholly-owned Government of India (Gol) company set up in 2006, is the principal entity which provides long term finance to viable infrastructure   projects   across   sectors.   It   is   a   Non-Banking   Financial Company - Infrastructure Finance Company (NBFC-IFC) registered with RBI since September, 2013.   The authorised capital and the paid up capital of the company as on date stand at Rs. 6000 crore and Rs. 4702.32 crore respectively.

Government has announced its intention to invest Rs. 100 lakh crore in infrastructure over the next five years. Infrastructure investment to this extent will require large amount of equity and debt. The role of IIFCL in making debt funding possible will be crucial as participation by IIFCL in funding a project opens up possibilities of co-financing by other lenders including larger banks. It is therefore necessary to infuse additional capital in IIFCL to enable it to fulfil its mandated role of financing major infrastructure projects.