IDFC, on Friday, said that the new bank would be the only subsidiary that would be listed from day one. The assets in the IDFC balance-sheet would move to the bank’s balance-sheet, it added.
“The existing shareholders will hold 100 per cent of the bank, partly through direct ownership of shares and partly indirectly through their ownership of their IDFC shares,” said Rajiv B. Lall, Executive Chairman, IDFC, while addressing a press conference here on Friday. The government has around 17 per cent holding in IDFC.
IDFC got the banking licence from the Reserve Bank of India on Wednesday last, along with the Kolkata-based Bandhan Financial Services Pvt. Ltd.
IDFC will transfer most of its assets to the bank, which will act as a subsidiary under a non-operating financial holding company (NOFHC).
A separate Infrastructure Debt Fund (IDF) subsidiary will be started under the holding company.
At present, “we are a listed entity…… We have three subsidiaries IDFC Alternative, IDFC Investment Banking, and IDFC AMC. Our existing subsidiaries will become the subsidiaries of NOFHC.
Mr. Lall said that non-performing assets and provisions for bad loans would also be transferred to the bank.
On foreign institutional investment (FII) limit, he said: “We have today, in IDFC, foreign ownership of 52-53 per cent, that has to be brought to under-50 per cent because regulations require that the promoter has to be a domestic entity, and cannot be a foreign entity. So, we have to do a preferential allotment at the level of IDFC-listed entity to bring the foreign ownership to under-50 per cent. So, we will be looking for domestic investors to take a preferential allotment in IDFC to that amount.”
On management of the new entity, he said that “we have quite a lot of existing bandwidth within IDFC management-wise, but our collective experience is not entirely appropriate for building the bank. So, we have already hired 2-3 people from outside IDFC, we will need to hire several more, and it will be a combination of existing and new team that will manage the bank and between Vikram Limea, Managing Director & CEO, and myself, we will manage both the bank and the rest of IDFC group”.
Mr. Lall also said that “we have already applied for housing finance company licences. So, in the next two months, we will get the licences, and start booking assets in housing. And then, we will migrate these assets into the bank”.