The state government is looking at offloading up to 49% equity stake in Andhra Pradesh State Financial Corporation (APSFC), a term lending institution for promoting small and medium scale industries. The government will be floating an IPO. Currently, the state government holds 100% stake in SFC, which was formed in 1956 through the merger of Andhra State Financial Corporation and Hyderabad State Financial Corporation.
According to the source, Crisil is in the process of rating the corporation and the exercise will be completed by mid-next year. This will be followed by a valuation of the enterprise by one of the rating agencies. The money raised through the proposed IPO will be used to increase our portfolio of advances portfolio.
Some of the other SFCs, such as Gujarat State Finance Corporation, are already listed on bourses. APSFC is targeting to raise its asset base from Rs 1,300 crore to Rs 3,000 crore ($1 billion) this fiscal. Of this, Rs 750 crore would be raised through non-SLR bonds next fiscal. Non-SLR bonds are bonds that do not fall in the SLR basket. Normally, non-SLR bonds have a lock-in period of 7-8 years. Earlier this year, SFC raised Rs 50 crore through the issuance of non-SLR bonds, carrying a coupon rate of 9.10%.
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