IFCI shares fall 7% after net loss widens in March quarter

Shares of IFCI fell seven percent on Tuesday after the firm reported a net loss of Rs 848.97 crore in the March quarter due to a fall in income and a change in its accounting policy versus a loss of Rs 584.19 crore in the corresponding quarter year ago.

The stock fell as much as 6.9 percent to its day's low of Rs 13.85 on the BSE.

Total income of the lender in the March quarter plunged to Rs 15.76 crore as against Rs 858.99 crore in the same period last year and from Rs 610.12 crore in Q3 of the reported fiscal.

For the full FY21, the company's net loss ballooned to Rs 1,911.58 crore from Rs 223.21 crore in FY20, IFCI Ltd said in a regulatory filing. Income was also down at Rs 2,093.81 crore as against Rs 2,905.68 crore in 2019-20.

IFCI said it has changed its accounting policy whereby the income on stage 3 assets (non-performing assets/bad loans) shall not be recognised in books of accounts with effect from April 1, 2021.

"Also income already accrued up to March 31, 2021, shall be de-recognised on certain stage 3 assets. Accordingly, an amount of Rs 613.71 crore has been charged to the P&L account (profit and loss account). Thus, the loss for the year is higher by Rs 613.71 crore and loan assets are lower by Rs 1,447.08 crore," it said.

Meanwhile, recently, rating agency, ICRA Limited re-affirmed the ratings of debt instruments of IFCI. Fund-based bank limits have been reaffirmed to

"The negative outlook continues to reflect ICRA’s expectations of increasing liquidity pressure, which could emerge over the next one year, if the planned divestments and NPA recoveries do not materialise, given the sizeable repayment obligations," according to the report.