However, with the IFCI stock quoting at only Rs 12.95, the issue is likely to face many hurdles. Also, it is not yet known whether IDBI, the largest shareholder with a 28.63 per cent stake, will subscribe to its rights portion. IDBI has in the past said that it is keen on reducing its holdings in IFCI.

IFCI's last equity issue was in 1993-94 at a premium of Rs 25. Investors who had subscribed to the issue got an exit opportunity after the scrip listed substantially higher than its offer price. In fact, the scrip even touched Rs 100 soon after listing. This time around, the going will be tough for IFCI. First, the investorappetite for primary issues has waned. Second, the IFCI' scrip has not been doing too well on the bourses. Third, post-rights, IFCI's equity will swell to a staggering Rs 706 crore. This is compared with Rs 660 crore in the case of IDBI and Rs 478 crore in the ICICI.

Till the nine-months ended December 1998, IFCI had already raised rupee resources amounting to Rs 2,951 crore largely through private placement of bonds with an average maturity of over 4 years. The average cost of raising these resources was 13.59 per cent, which was in tune with the current interest rate scenario. IFCI also raised preference share capital to the extent of Rs 214 crore with a coupon rate of 10.75 per cent for the period under consideration.

Disbursals during the period amounted to Rs 3159 crore as against Rs 3843 crore during the corresponding period of the previous year. The recession in certain industrial sectors including steel, cement, textiles and automobiles affected credit delivery.

The institution's net profit wasRs 106.57 crore for the first three quarters, after a provisioning of Rs 175 crore for NPAs.