Overview We have been an integral part of the country's development story since 1997, when our company was formed with the specific mandate to build the nation. Since 2005, we have built on our vision to be the 'one firm' that looks after the diverse needs of infrastructure development. Whether it is financial intermediation for infrastructure projects and services, adding value through innovative products to the infrastructure value chain or asset maintenance of existing infrastructure projects, we focus on supporting companies to get the best return on investments. Our growth has been driven by the substantial investment requirements of the infrastructure sector in India combined with the growth in the Indian economy over the last several years. Our ability to tap global as well as Indian financial resources makes us the acknowledged experts in infrastructure finance. This, coupled with a strong synergy between the company management and key shareholders, and a dedicated team of over 550 people makes us an organization that is committed to improving the face of India's infrastructure sector. At IDFC, our commitment to building India's infrastructure goes beyond business. We work closely with government entities and regulators to advise and assist them in formulating policy and regulatory frameworks that support private investment and public-private partnerships in infrastructure development. Mission “To be the leading knowledge-driven financial services platform, creating enduring value, promoting infrastructure and nation building, in India and beyond” Values Integrity We engage in honest and straight forward communication with all stakeholders and adhere to the highest ethical standards in everything we do. Our reputation is paramount. We will act in the best interests of our clients but without compromising our values and principles.
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Overview
We have been an integral part of the country's development story since 1997, when our company was
formed with the specific mandate to build the nation.
Since 2005, we have built on our vision to be the 'one firm' that looks after the diverse needs of
infrastructure development. Whether it is financial intermediation for infrastructure projects and
services, adding value through innovative products to the infrastructure value chain or asset
maintenance of existing infrastructure projects, we focus on supporting companies to get the best return
on investments.
Our growth has been driven by the substantial investment requirements of the infrastructure sector in
India combined with the growth in the Indian economy over the last several years. Our ability to tap
global as well as Indian financial resources makes us the acknowledged experts in infrastructure finance.
This, coupled with a strong synergy between the company management and key shareholders, and a
dedicated team of over 550 people makes us an organization that is committed to improving the face of
India's infrastructure sector.
At IDFC, our commitment to building India's infrastructure goes beyond business. We work closely with
government entities and regulators to advise and assist them in formulating policy and regulatory
frameworks that support private investment and public-private partnerships in infrastructure
development.
Mission“To be the leading knowledge-driven financial services platform, creating enduring value, promoting infrastructure and nation building, in India and beyond”Values
Integrity
We engage in honest and straight forward communication with all stakeholders and adhere to the
highest ethical standards in everything we do. Our reputation is paramount. We will act in the best
interests of our clients but without compromising our values and principles.
Nurturing Humility
We are modest enough to know that we can be wrong and smart enough to learn from our mistakes. We
treat everyone as an equal— no task is beneath us.
Stewardship
We act as custodians of our firm and accept the charge of passing on a better business than the one we
inherited. Our actions will be guided by rules and ethical principles creating long term value with due
care for society and environment.
Partnership
We emphasize a ONE FIRM culture. We foster mutual respect and proactively collaborate with each
other, with clients, and with partners keeping just one thing in mind – to be the best at what we do.
Initiative
We encourage new ideas and independent action within a culture that fosters sharing knowledge and
information, critical debate and constructive dissent.
Responsibility
We take complete ownership for our actions, emphasizing a results-oriented and problem-solving
approach to business. We are personally accountable to the communities that we serve.
Excellence
We constantly strive to raise industry standards, be the employer of choice, and work to be the best
rather than the biggest. Dedication to excellence results in superior execution and generates creative,
History & TimelinesOur Group was born out of the need for a specialized financial intermediary for infrastructure.
Incorporated on January 30, 1997 in Chennai, our company was set up on the recommendations of the
'Expert Group on Commercialisation of Infrastructure Projects' under the Chairmanship of Dr. Rakesh
Mohan.
Since then, we have been a leading catalyst for providing private sector infrastructure development in
India. We focus on developing and leveraging our knowledge base in the infrastructure space to devise
and provide appropriate financing solutions to our customers. Our strong capitalization reflects the
crucial role that we play in infrastructure development.
1997 IDFC is founded on the recommendations of the 'Expert Group on Commercialization of
Infrastructure Projects' under the Chairmanship of Dr. Rakesh Mohan. The group is conceptualized to channel private capital into commercially viable projects.
1999 Is notified as a Public Financial Institution under Section 4A of the Companies Act.
2000 Gets registered with SEBI as a merchant banker.
2001 Gets registered with SEBI as a debenture trustee. Sets up Infrastructure Development Corporation (Karnataka) Limited (iDeCK).
2002 Sets up IDFC Private Equity as an investment manager for private equity funds. Sets up Uttaranchal Infrastructure Development Company Limited (UDEC).
2003 Successfully raises $200 million for the India Development Fund, the first infrastructure-focused
private equity fund.2005
Becomes a public company after listing its shares on NSE and BSE.2006
Successfully raises $450 million for its second infrastructure - focused private equity fund.2007
Raises Rs. 2,100 crore through QIP. Sets up IDFC Project Equity Company Limited as a specialized project finance entity focused on
developing Indian infrastructure projects. Establishes IDFC Projects to develop, implement, own and operate projects in the infrastructure
space.2008
Successfully raises $930 million through the India Infrastructure Fund to invest equity capital in infrastructure projects and $700 million in its third private equity fund.
Enters into asset management by acquiring the AMC business of Standard Chartered Bank in India.
Incorporates IDFC Capital (Singapore) Pte Limited, for an emerging markets private equity fund-of-funds business.
2009 The company's loan book crosses Rs. 20,000 crore with more than 200 infrastructure projects
funded. Establishes IDFC Foundation to focus on capacity building, policy advisory and sustainability
initiatives. Becomes part of Nifty 50.
2010 Raises additional capital of Rs. 26,542 million through a Qualified Institution Placement at
Rs.168.25 per share and CCPS at a conversion price of Rs.176 per share. Government shareholding reduces to 18%
Classified as an Infrastructure Finance Company (IFC) Raises Rs. 480 crores in the first tranche of its Long Term Infrastructure Bonds
Environment ManagementOverview
Our Environment Management and Social Development Group provides support in assessing the
environmental and social issues and risks associated with infrastructure projects. They help us to make
our investments environmentally sustainable and socially viable.
This group also assists in the monitoring and reviewing of projects throughout their term from an
environmental and social perspective. In addition, it also provides evaluation and assessment services in
environment management and sustainable development areas to third parties.
Sustainable Infrastructure Development
We have initiated the Inclusive Infrastructure Fund, a small corpus formed out of
our own funds to support social enterprises and innovative environmental
projects.
The Fund made its first equity investment in Ziqitza Healthcare Ltd., a company
that provides emergency response ambulance services under an innovative
business model where better-off patients cross-subsidize poorer patients.
Through this fund we have also approved a second investment in a company
that imparts civil construction skills to unemployed rural youth and places them
directly with construction companies after training.
We are considering several other investment opportunities in areas such as rural
solar lighting, municipal solid waste based biomethanation plants and innovative rural community
sanitation upgradation systems.
Management of environmental and social issues
At IDFC we firmly believe that small steps go a long way in saving the
environment. Our environment management systems assess and mitigate the
environmental and social impacts of our investments in infrastructure projects,
and minimize the environmental impact and carbon footprint of our operations
through resource efficiency and conservation.
We also help investors integrate consideration of environmental, social, and
governance (ESG) issues into their investment decision-making and ownership
practices, and thereby improve long-term returns to beneficiaries. Our active
volunteering program aimed at sensitizing our employees towards
environmental and social issues, is just another small step towards preserving
our planet.
Environment policy framework
Under the “Go Green” initiative, we have launched an internal environment
policy aimed at minimizing the environmental impact and carbon footprint of our
projects. We are on course for obtaining the US Green Business Council’s LEED
Gold Certification (Commercial Interiors) for our new office at Chennai and
(possibly India’s first) certification for an Energy-Efficient Data Centre from TUV
Rhineland, Germany.
Risk ManagementOverview
A comprehensive Enterprise Risk Management (ERM) framework ensures that we assess the extent of
these risks in our aggregate credit portfolio on a regular basis by adopting an integrated approach to
managing all the three types of risks across entities within our Group Companies.
Our focus on loan portfolio management, asset liability management (ALM) and loan pricing ensures a
strong risk management framework for market and credit risks. In addition to this, we are in the process
of developing various market risk modules to strengthen our risk management processes.
A comprehensive portfolio review of all project assets and equity investments of the Group on a semi-
annual basis helps us to effectively manage credit risks. Our Risk Group also closely focuses on ALM to
enhance the effectiveness of the current process of regular monitoring of liquidity and interest rate risks.
Our sophisticated software-based ALM system enables us to capture data from various disparate
platforms and allows for more detailed and comprehensive analysis.
Our ALM-based risk management system is supported by customized software which:
Allows real-time tracking and monitoring of all types of risks
Provides precise information on activities, risks and controls to all
Has the capability to track, understand and manage information across the organization
Generates risk heat maps at all levels of the business
Shows the list of open issues at any point of time
Enables setting up central repository for all policy and procedures
Enables standardizing of all group policies and procedures
Provides trend analysis on risk history to take proactive measures
TreasuryThe treasury function is primarily the back-bone for project financing in our organization. It focuses on
liquidity management to provide sufficient funds at optimal costs. In addition, it also generates returns
by taking calls in the fixed-income trading space.
Our treasury operations have assumed greater importance as a source of income. While the investment
strategy for treasury operations continues to ensure adequate levels of liquidity to support core business
requirements, it has started focusing on optimizing levels of return and functioning as a profit centre
investing in fixed income assets, while maintaining prudent safety norms.
Overview
IDFC Project Finance is a pioneer in lending for infrastructure projects. We were founded with the sole
objective of providing and promoting private financing of Indian infrastructure. Our business is capital
intensive and focuses on managing the loan book for IDFC, making us the bridge between our parent
company and its clients to build a larger and wider customer engagement.
Our business has shown robust growth in the last year through our focus on creating a more stable asset
base.
We have developed extensive domain knowledge, particularly for project structuring, appraisal and risk
evaluation. We played a key role in introducing innovative financial products and structures such as take-
out financing and risk participation facilities, which allow a broader cross-section of lenders and investors
to participate in infrastructure financing.
PRODUCTS
Senior Debt FinancingSenior Debt Financing forms the largest component of our financing portfolio. It is provided through loans
or in the form of subscriptions to debentures, making up 56% of our loan portfolio. It ranks ahead of
other debt obligations of the borrower with respect to security and right of payment.
Our senior debt financing is fully secured and has recourse to the project assets in the event of any
default. In most cases, senior debt provided by us is substantially collateralized through documents such
as pledge of all or part of the sponsors' equity holding in the borrower or an assignment of rights under
the various project contracts.
We also provide securitized debt that is collateralized by the cash flow receivables of the project. Our
senior debt financing typically bears fixed rate interest with re-pricing mechanisms that usually come
into effect after five years to adjust to changes in interest rates. Additionally, senior loans may also be
re-priced for changes in the credit quality of the borrower.
Mezzanine ProductsWe provide financing in the form of mezzanine products to strengthen project structures. These products
comprise of preference capital and subordinated debt. Our Mezzanine products are layered in a firm's
capital structure between equity and senior debt and act as an additional tier to the capital structure.
Our Mezzanine instruments are subordinated in right of payment to senior debt and have only a second
charge on the borrower’s assets. These subordinated financing structures carry higher risk as compared
to senior debt but have the potential of earning higher returns.
Principal InvestmentsOur Principal equity investments in infrastructure companies provide financing to them and help us to
continuously explore opportunities that result in accepting a higher level of risk. Through this business,
we also focus on exploring and developing innovative financing structures for our investments.
Our principal investment business plays a key role in generating non-interest income for us. These
investments could be strategic in nature and we may also make them through our treasury operations.
We could also invest in non-infrastructure related businesses that in our view are capable of generating
attractive returns.
The focus of our principal investments is on companies that have high quality sponsorship, good growth
prospects and well defined exit opportunities. We have made principal investments in infrastructure-
related companies that subsequently listed on stock exchanges, such as Gateway Distriparks,
Indraprastha Gas and PTC India Limited.
Non-Fund Based ProductsThrough our non-fund based products, we issue guarantees for a project’s performance and payment
obligations. Our guarantees enhance the credit ratings of the underlying financial instruments and
enable projects to secure financing from a wider spectrum of sources. These include borrowings from
commercial banks, foreign lenders and the debt capital markets. We also issue guarantees to enable
project companies to open letters of credit.
Our non-fund based products also consist of Take-out financing. This product is designed to address the
maturity mismatches and the risk appetite of certain categories of lenders, allowing them to participate
in infrastructure financing. It also helps us to take over outstanding loans from project lenders after 5
years because of our access to funds with long-term maturity.
The amount of debt funding provided by a bank, financial institution or NBFC participating in project
funding is constrained by industry, group and borrower limits on exposures that apply to them. To
address this constraint we may assume a portion of the credit risk in an underlying instrument through
our risk participation product.
IDFC INVESTMENT BANKING
OverviewIDFC Capital is IDFC’s all-inclusive investment banking division. We provide a full suite of
investment banking services to a diverse group of Indian and multinational corporations,
banks and financial institutions across major industry sectors.
We aim to build substantial value for entrepreneurs and mature companies by helping them accomplish
accurate capitalization strategies.
Our clientele ranges from early stage private companies to well established corporate, which are
recognised leaders in their respective sectors.
The IDFC Capital team comprises of committed experts with in-depth sector knowledge and
understanding to meet our clients’ varied needs for corporate finance. Our team works closely with
senior leaders and company management to prepare effective and investment-worthy business plans.
IDFC SECURITIESOverviewIDFC Institutional Securities has been one of India’s leading equities broker for institutional investors
catering to domestic as well as overseas financial institutions investing in Indian equities.
We are empanelled with over 1,200 institutional clients across India, Southeast Asia, the UK and USA. We
are renowned for our pioneering role in institutionalizing the concept of equity research in India. A
thorough research-based approach continues to remain the corner stone of our business model - a
legacy in which we take considerable pride.
The IDFC Institutional Securities team consists of best-in-class professionals and is one of the leaders in
Indian equity market advisory and execution. We specialize in providing investment solutions tailored to
client needs. We have one of the best and largest research teams, which include dedicated technical and
derivative analysts who together with the sales team form a formidable combination in the equities and
securities markets. IDFC Institutional Securities had held a leadership position in the QIP league
demonstrating strong selling ability to Institutional Investors.
IDFC PE
IntroductionIDFC Private Equity (IDFC PE) was set up in 2002, and is India’s largest and most active private equity
fund focused on infrastructure (including social infrastructure) and allied enablers and services. IDFC PE
manages a corpus of
INR 57 billion (USD 1.3 billion).
IDFC PE manages three funds:
India Development Fund, an INR 8.4 billion (USD 192 million) fund
IDFC Private Equity Fund II, an INR 19.9 billion (USD 440 million) fund
IDFC Private Equity Fund III, an INR 29.0 billion (USD 644 million) fund
IDFC PE is a 100% subsidiary of IDFC (Infrastructure Development Finance Company Ltd.), India’s
leading financial institution focused on providing a full spectrum of financial and advisory services for
infrastructure development, with a balance sheet size of more than USD 10 billion.
IDFC PROJECT EQUITY
ProfileIDFC Project Equity is a leading 'Infrastructure Equity' Investment Manager based in India.
We manage the India Infrastructure Fund (IIF), a SEBI-registered domestic venture capital fund focused
on infrastructure with a corpus of INR 38 billion (USD 927 million1). IIF focuses on investing equity for the
long-term in a diversified portfolio of infrastructure assets in India.