IDFC –

INFRASTRUCTURE
DEVELOPMENT
FINANCE COMPANY
Presented By:
J.GAYATHRI
S.JUDE NAVIN
 FLOW OF PRESENTATION
• Introduction
• Products and Services
• Management Team
• Performance of IDFC over last 5
years
• Objectives and achievement
• Future of IDFC
•
•
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 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.
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 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
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 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
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 Urban Services, Rural Infrastructure,
 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
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 SUBSIDIARIES
IDFC 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)
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 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

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 PRODUCTS AND SERVICES
• Corporate Investment Alternative Asset
Banking Management
Public Market
Asset Management
•
 Project Finance IDFC Private Equity IDFC Mutual Fund

IDFC Investment IDFC Project Equity

Banking
IDFC Securities IDFC Capital

IDFC Projects

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 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

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 IDFC INVESTMENT BANKING
• Category-1 Merchant Bank
• Private placements of equity and
debt, public offerings and project
advisory to mergers and
acquisitions.

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 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.
•
•
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 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.
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 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.
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 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.
•

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 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.
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 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
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 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

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 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
04/18/11and financial institutions is currently in 19
 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 Board
 Mr. 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
04/18/11Member of the Board of Directors of IDFC 20
 PERFORMANCE OF IDFC

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 APPROVALS AND
DISBURSEMENTS
• Disbursements
has almost
doubled from
2006 to 2010
• Approvals have
almost tripled
from 2006 to
2010


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SHARE OF TOTAL EXPOSURE

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 APPROVALS AND
DISBURSEMENTS

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 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
•

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 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.
•
 

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 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
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FY 2009 27
 PERFORMANCE OF IDFC

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 PERFORMANCE OF IDFC

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 PERFORMANCE OF IDFC

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Profitability Ratios

2006 2007 2008 2009 2010

Gross Profit Margin(%) 41.27 38.43 92.78 91.39 91.4

Net Profit Margin(%) 37.46 30.74 26.4 22.16 28.25

Return On Capital Employed(%) 7.65 8.04 8.47 10.24 9.82

Return On Net Worth(%) 14.76 16.06 12.26 12.2 14.84

Return on Long Term Funds(%) 8.46 8.75 9.3 11.51 10.81

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Liquidity And Solvency Ratios

2006 2007 2008 2009 2010

Current Ratio 6.93 8.07 6.8 5.5 6.97

Quick Ratio 24.45 31.07 25.71 26.79 28.18

Debt Equity Ratio 3.68 5.17 4.09 3.91 3.89

Long Term Debt Equity Ratio 3.23 4.66 3.63 3.37 3.44

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Debt Coverage Ratios

2006 2007 2008 2009 2010

Interest Coverage 1.82 1.67 1.62 1.5 1.69

Total Debt to Owners Fund 3.68 5.17 4.09 3.91 3.89

Financial Charges Coverage Ratio 1.83 1.68 1.63 1.51 1.7

Financial Charges Coverage Ratio Post 1.76 1.55 1.46 1.37 1.54
Tax

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Management Efficiency Ratios

2006 2007 2008 2009 2010

Debtors Turnover Ratio 147.39 131.48 158.29 227.51 122.57

Fixed Assets Turnover Ratio 20.34 32.2 56.6351 8.572 9.977

Total Assets Turnover Ratio 0.08 0.08 0.09 0.11186 0.10706

Asset Turnover Ratio 13.7 20.2 34.36 7.64 8.38

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Cash Flow Indicator Ratios 2006 2007 2008 2009 2010

Dividend Payout Ratio Net Profit 34.14 28.53 27.19 23.8 21.45

Dividend Payout Ratio Cash Profit 33.83 28.28 27 23.16 20.78

Earning Retention Ratio 65.01 71.66 73.94 77.54 78.89

Cash Earning Retention Ratio 65.34 71.91 74.12 78.11 79.54

Adjusted Cash Flow Times 25.32 31.67 31.7 29.49 24.98

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 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

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Cash flow statement Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

Net Profit Before Tax 419.29 571.53 873.05 964.92 1317.14

Net Cash From Operating Activities 206.62 26.41 551.82 608.72 -3401.99

Net Cash (used in)/from Investing Activities -616.6 -955.8 -3265.15 -1543.5 57.63

Net Cash (used in)/from Financing Activities 17.73 1566.21 3346.58 -14.06 2720.08

Net (decrease)/increase In Cash and Cash -392.25 636.83 633.25 -948.84 -624.29
Equivalents

Opening Cash & Cash Equivalents 426.97 334.9 971.73 1604.98 655.55

Closing Cash & Cash Equivalents 34.72 971.73 1604.98 656.14 31.27

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 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% 38
•04/18/11
 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
•
•
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 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
04/18/11 40
 GIL’s ACQUISITION OF
WINDFARMS
• 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
04/18/11and Axis Bank. 41
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.
04/18/11 42
 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.
04/18/11 43
•
 REFERENCES
• Annual Reports for FY2006 to FY2010
• Quarterly Report for Q1 FY2011
• www.idfc.com
• www.rbi.org.in
• http://www.wikinvest.com/stock/Infrastru


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 THANK YOU

04/18/11 45