KOLKATA: Project financier IFCI Ltd.’s decision to sell its entire
ownership of about 33.5% in India’s only dedicated lender to the tourism
industry has stoked concerns that the move may enhance credit flow to other
sectors at the expense of hotels, recreation, and travel-related companies.
“There is no guarantee that whoever IFCI sells its stake to would want to
continue with lending only in the tourism sector. We fear becoming one of the
many non-banking financial companies, with interests in other lucrative sectors
such as real estate or retail,” said a senior officer at the Tourism Finance Corp. of India (TFCI), the
company IFCI wants to exit.
In existence for more than 25 years, TFCI is the only governmentpromoted
financial institution for funding tourism projects. Besides providing
assistance to 758 projects and helping add 45,910 rooms to the hotel inventory,
TFCI has also assisted in projects such as amusement parks, theme parks,
tourist trains, and restaurants. “If the stakes are sold off to a private
player, the tourism industry will be deprived of the isolated public financial
institution dedicated to the sector,” the officer added on conditions of
anonymity.
While IFCI has decided to offload its entire stake in four associate units to
focus on its core business of term lending, the lender has already sold off its
45.5 % stake in associate firm Hardicon. The board is scheduled to meet
Tuesday, and its members are likely to consider the offloading of TFCI’s stake
at the meeting.
Other shareholders at TFCI include Life Insurance Corporation of India (6.71%), Bank of India (4.70%), United India Insurance
Company (1.48%), Oriental
Insurance Company (1.07%).
Public shareholding is 52%. It remains to be seen whether TFCI retains the
character of a public financial institution and whether the finance and tourism
ministries will step in to protect the status of the company as a dedicated
entity for developing the tourism infrastructure.
Hoteliers,
too, do not want to let go off the only public financial institution dedicated
to tourism.
"The objective of TFCI might be completely lost because no one knows who
would take over after IFCI's stake sale,” said Yogesh Joshi, managing director
at New Light Hotels and Resorts that owns Vadodara’s Gateway Hotels.
Source: Economic Times
More will update soon!!
