Company chairman Deepak Parekh said that the IPO proposal was discussed by the board and kept on the backburner. Board members, however, will discuss valuation issues with investment bankers. The book value of a Rs 10 face value IDFC share today stands at Rs 17.
Meantime, Parekh said IDFC will remain an autonomous, independent body and retain its private sector characteristic. "This has been reaffirmed by the board of directors," Parekh told Business Standard immediately after the board meeting on Tuesday. There is no proposal to merge or further realign the shareholding in IDFC, he added.
He said a four-member committee chaired by American International Group country head Sunil Mehta will identify a new CEO in the next three months. "We are using headhunters and looking at candidates in the banking and financial sector," said Parekh.
Responding to the drama that took place recently at IDFC with regards to the seven management team putting in their papers, Parekh said:
"That is now behind us."
The board accepted the resignation of IDFC managing director Nasser Munjee, while the other six members of the top brass had earlier withdrawn their resignation letters.
The importance of IDFC's IPO was to give some shareholders an exit option, while at the same time listing of the shares would give shareholders a fair valuation of their investment.
According to the original shareholder agreement, the IPO was to be done five years back, and subsequently a two-year grace period was given which expires in 2005.
With IDFC expected to play a greater role in the area of infrastructure funding, the institution will need additional capital. "IDFC will increase its operations as it has been given the role of a nodal agency for the Rs 50,000-crore (Rs 500 billion) infrastructure fund," said Parekh.
He added that in fiscal 2005 IDFC is expected to sanction Rs 7,000 crore (Rs 70 billion) worth of projects and disburse about Rs 3,000-4,000 crore (Rs 30-40 billion) in loans.
