Idfc

IDFC – INFRASTRUCTURE DEVELOPMENT FINANCE

COMPANYPresented By:

Niharika ReddyNitish MittalRuchi Gupta

Sashank ShahYogesh Gupta

April 8, 2023 IDFC 2

FLOW OF PRESENTATION

• Introduction• Products and Services• Management Team• Performance of IDFC over last 5 years• Objectives and achievement• Future of IDFC


INTRODUCTION

• It is provider of financial, advisory and management services in the infrastructure space.

• The Company also has interests in Asset Management, Investment Banking and Brokerage.

• Incorporated on January 30, 1997 in Chennai on the recommendations of the 'Expert Group on Commercialization of Infrastructure Projects' under the Chairmanship of Dr. Rakesh Mohan.

• As on 2010, IDFC had 192 employees


OBJECTIVES AND VISION

• Objective : To act as a catalyst for and help bankroll infrastructure projects in the private sector

• Vision : 'one firm' that looks after the diverse needs of infrastructure development

• India's leading integrated infrastructure finance player providing end to end infrastructure financing and project implementation services


4X4 STRATEGY

• Pursuit of four objectives Delivering profitability, pursuing innovation, growing its asset

base and promoting thought leadership.• Focus on four key sectors

Transport, Energy, Telecommunication (Telecom) and IT, and Industrial and Commercial infrastructure.

• Delivery of four main products Project Finance, Equity Finance, Structured Products and Advisory / Investment Banking services.

• Exploration of four new frontiers Urban Services, Rural Infrastructure, Healthcare and Education.


INFRASTRUCTURE FINANCE COMPANIES - IFC

• In 2009-2010, RBI introduced new category in NBFC called IFC• To qualify as IFC, 75% of its total assets should comprise

infrastructure assets

• Benefits to IFCs - lower risk weight on their bank borrowings (from a flat 100% to as

low as 20% for AAA rated borrowers)- The exposure of a bank to IFCs has been enhanced to 20% of its

capital funds- need to maintain a CAR of 15%, of which at least 10% should

comprise Tier I capital.- Exposure to a single project and a single business group limited to

25% and 40% respectively of their net owned funds


SUBSIDIARIESIDFC has ten direct wholly owned subsidiary companies• IDFC Private Equity Company Limited• IDFC Trustee Company Limited• IDFC Project Equity Company Limited• IDFC Finance Limited• IDFC Securities Limited *(earlier known as IDFC-SSKI Securities Limited)• IDFC Capital Company Limited• IDFC PPP Trusteeship Company Limited• IDFC Projects Limited• IDFC Asset Management Company Limited • IDFC AMC Trustee Company Limited

* In addition IDFC Securities Limited has two wholly owned subsidiary companies :

• IDFC Capital Limited (earlier known as IDFC-SSKI Limited)• IDFC - SSKI Stock Broking Limited.


JOINT VENTURES

IDFC has three joint ventures : Infrastructure Development Corporation

(Karnataka) Limited (iDeCK) in the state of Karnataka

Uttaranchal Infrastructure Development Company Limited (UDeC) in the state of Uttaranchal

Delhi Integrated Multi Modal Transit System Limited (DIMTS) in Delhi


PRODUCTS AND SERVICES

Corporate

Investment Banking

Alternative Asset

Management

Public Market

Asset Management

Project Finance IDFC Private Equity IDFC Mutual Fund

IDFC Investment

Banking

IDFC Project Equity

IDFC Securities IDFC Capital

IDFC Projects


CORPORATE INVESTMENT BANKING- PROJECT FINANCE

• Objective : Providing and promoting private financing of Indian infrastructure

• Products under Project Finance:- Senior Debt Financing- Mezzanine Products- Principal Investments- Non-Fund Based Products


IDFC INVESTMENT BANKING

• Category-1 Merchant Bank• Private placements of equity and debt, public

offerings and project advisory to mergers and acquisitions.


CORPORATE INVESTMENT BANKING- IDFC SECURITIES

• Amongst the most prominent Indian brokers for institutional investors.

• Cater to a wide variety of investors including Pension Funds, Long-only Funds, Hedge Funds, Mutual Funds, Banks, Insurance companies and Portfolio Management companies.


ALTERNATE ASSET MANAGEMENT-IDFC PRIVATE EQUITY

• Set up in 2002• IDFC is India’s largest and most active private

equity firm focused on infrastructure and manage a corpus of Rs. 60 billion (USD 1.3 billion).

• Through these funds, IDFC has invested in companies whose underlying assets range from ships, airports, trucks, power plants and telecom towers to hotel rooms, amusement parks, roads and bridges, gas pipeline, clean energy and rail container licenses.


ALTERNATE ASSET MANAGEMENT-IDFC PROJECT EQUITY

• IDFC manages the India Infrastructure Fund (IIF), a SEBI-registered domestic venture capital fund focused on infrastructure with a corpus of INR 38 billion(USD 927 million)

• IIF focuses on investing equity for the long-term in a diversified portfolio of infrastructure assets in India.


ALTERNATE ASSET MANAGEMENT-IDFC CAPITAL

• Objective : To identify and invest in exceptional mid-market growth-oriented private equity funds in the Asian emerging markets of China, India, Central Asia, and Southeast Asia.


ALTERNATE ASSET MANAGEMENT-IDFC PROJECTS

• IDFC Projects delivers a strong value proposition in developing and implementing infrastructure projects.

• IDFC works in active collaboration with Central and State Governments as well as private sectors to develop, finance, execute and manage infrastructure projects in India.


PUBLIC MARKET ASSET MANAGEMENT- IDFC MUTUAL FUND

• IDFC Mutual Fund was acquired in 2008-09• It manages different mutual fund products for

institutional and retail investors.• Generates income through asset management

fees • Focuses on growing the assets under

management by offering suitable products and channeling private and corporate savings into the debt and equity markets


RISK MANAGEMENT

• Three kinds of risks:- Market Risk- Credit Risk- Operational Risk• Implements an Enterprise Risk Management

(ERM) framework that adopts an integrated approach to manage all the three types of risks


RISK MANAGEMENT

• There is focus on loan portfolio assessment, Asset-Liability Management (ALM), and loan pricing

• On the credit risk front, there is a comprehensive portfolio review of all project assets and equity investments of the Company on a semi-annual basis.

• Management of Market Risk involves measuring interest rate risk on a regular basis as well as testing newer models for analysis

• With the regulatory framework for banks and financial institutions is currently in transition to the Basel II environment, the risk measurement and monitoring framework is being accordingly enhanced.


MANAGEMENT TEAM• Mr. Deepak Parekh, non-executive chairman of IDFC• Mr. G.C. Chaturvedi and Mr Surinder Singh Kohli, Director by

Government of India on the IDFC Board. • Mr. Abdul Rahim Abu Bakar and Mr. Dimitris Tsitsiragos, Nominated

as a Director to the IDFC Board by the Domestic Institutions and the Foreign Investors of the Company

• Independent Director on the IDFC BoardMr. Serajul Haq Khan

Mr. Gautam Kaji Mr. Donald Peck Mr. Shardul Shroff

• Dr. Rajiv B. Lall, Managing Director and Chief Executive Officer of IDFC• Mr. Vikram Limaye, Executive Director and a Member of the Board of

Directors of IDFC


PERFORMANCE OF IDFC


APPROVALS AND DISBURSEMENTS

• Disbursements has almost doubled from 2006 to 2010

• Approvals have almost tripled from 2006 to 2010

Approvals and Disbursements*


SHARE OF TOTAL EXPOSURE

38%

20%24%

8%9%

2009-2010

Energy

Transportation

Telecom & IT

Commercial & Industrial

Others

41%

24%11%

11%

14%

2008-2009

EnergyTransportationTelecom & ITCommercial & IndustrialOthers


APPROVALS AND DISBURSEMENTS


FINANCIAL PERFORMANCE OF IDFC

• The Net worth of the company has grown from Rs. 2544 cr to Rs. 6823 cr in the last five years

• The Total Assets of the company have also grown by almost 2.8 times in the last 5 years

2006 2007 2008 2009 20100.00

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00

35,000.00

40,000.00

11,910.73

17,771.01

27,742.8829,618.72

33,345.99

Total Assets

Financial Year

Rs. C

rore

s


PERFORMANCE OF IDFC

• The Sales of the company has been increasing over the years.

• Operating Profit for the company has increased by almost 3 times in the last 5 years.

2006 2007 2008 2009 20100.00

500.00

1,000.00

1,500.00

2,000.00

2,500.00

3,000.00

3,500.00

4,000.00

1,000.95

1,500.55

2,523.66

3,313.253,569.97

Sales Turnover

2006 2007 2008 2009 20100.00

500.00

1000.00

1500.00

2000.00

2500.00

3000.00

3500.00

912.83

1428.57

2346.40

3048.413296.03

Operating Profit


PERFORMANCE OF IDFC

• Over the last five years, the size of balance sheet has increased 132%

• It increased by 12.6% in FY 2010 compared to FY 2009 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

0

5000

10000

15000

20000

25000

30000

35000

40000

1446017850

2792129809

33562

Consolidated Balance Sheet Size

Financial Year

Rs. C

rore

s


PERFORMANCE OF IDFC

2005-2006 2006-2007 2007-2008 2008-2009 2009-20100.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

3.86% 3.70%

3.12%

2.60%

3.40%

ROA


PERFORMANCE OF IDFC

2005-2006 2006-2007 2007-2008 2008-2009 2009-20100

200

400

600

800

1000

1200

302428

694

922

1117

Total Net Interest Income

Financial Year

Rs. C

rore

s

2005-2006 2006-2007 2007-2008 2008-2009 2009-20100

100200300400500600700800900

1000

229 267

618 613

950

Total Non Interest Income

Financial Year

Rs. C

rore

s


PERFORMANCE OF IDFC

2005-2006 2006-2007 2007-2008 2008-2009 2009-20100

5

10

15

20

25

30

35

40

45

50

0 0

7

4643

Net NPA

Financial year

Rs. C

rore

s


2006 2007 2008 2009 2010

Earnings Per Share 3.35 4.11 5.17 5.68 7.79

Book Value 22.67 25.6 42.14 46.55 52.46

2006 2007 2008 2009 20100

1

2

3

4

5

6

7

8

9

Earnings Per Share

Financial Year Ended On

EPS


HIGHLIGHTS OF Q1 FY 2011• Profit After Tax of Rs. 335 crore in Q1 FY 2011 compared to Rs.272 crore in Q1

FY 2010 • EPS increased from Rs. 2.10 per share to Rs. 2.56 per share : an increase of

22% • IDFC is notified as an Infrastructure Finance Company by the Reserve Bank of

India • Gross Approvals tripled from Rs. 4,361 crore in Q1 FY 2010 to Rs. 13,046 crore

in Q1 FY 2011 • Gross Disbursements increased four times from Rs. 1,542 crore in Q1 FY 2010

to Rs. 6,204 crore in Q1 FY 2011 • Balance sheet size as on June 30, 2010 – Rs. 38,612 crore : an increase of 25% • Net NPAs at 0.15% of outstanding loans; No new NPA during Q1 FY 2011 • Net Interest income (NII) of Rs. 337 crore : an increase of 38% • Non Interest Income of Rs. 266 crore : an increase of 22%


OBJECTIVE AND ITS ACHIEVEMENTS

• Helping mid-cap companies to strengthen their business

• Providing legal support.• Financing projects to helping companies go

public through IPOs.• ‘One firm' philosophy


IDFC HELPS RAISE Rs. 500 cr FOR A JOINT VENTURE

• Wipro wins a contract for IT systems work at IGI Airport

• IDFC steps in to provide the finance needed.

• Seamless working between three IDFC verticals - IDFC Capital, IDFC Project Finance and IDFC Legal - saw the transaction being dealt with smoothly.

• Green Infra Ltd. (GIL) was with the objective of becoming India's leading renewable energy-focused independent power producer.

• How it worked at IDFC• IDFC Private Equity: Involved in the bid process with

GIL• IDFC Project Finance: Structured and fully underwrote

the entire long term loan. Provided full debt financing.• IDFC Capital: Syndicated the loan to Indian Renewable

Energy Development Agency and Axis Bank.

GIL’s ACQUISITION OF WINDFARMS


AWARDS AND RECOGNITION

• Project Finance International Asia Pacific Awards 2009- IDFC Project Finance ranked third as mandated lead arranger

for Project finance loans.• Private Equity International Awards 2009- IDFC Private Equity wins Best Private Equity Firm award.• Lipper Fund Awards 2010- IDFC AMC's IDFC Premier Equity Fund - Plan A wins award for

being the best fund over 3 years in the equity segment (India).• Infrastructure Investor Awards 2009- IDFC Private Equity declared Asian Infrastructure Fund

Manager of the year.


FUTURE OF IDFC• Likely to be at the center of India’s incipient

infrastructure build-up.• Accounts for a quarter of the total bank lending

to private projects in areas like roads, ports, power and airports.

• Many more deals in the pipeline• Lack of physical infrastructure is one of the most

serious problems facing the Indian economy today. IDFC could play a transformational role here.


REFERENCES

• Annual Reports for FY2006 to FY2010• Quarterly Report for Q1 FY2011• www.idfc.com• www.rbi.org.in• http://www.wikinvest.com/stock/Infrastructur

e_Development_Finance_(BOM:532659)

http://www.idfc.com/

http://www.rbi.org.in/

http://www.wikinvest.com/stock/Infrastructure_Development_Finance_(BOM:532659)

http://www.wikinvest.com/stock/Infrastructure_Development_Finance_(BOM:532659)


THANK YOU

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