Tfci lecture

Prepared by: Sajan N Thomas
Asst Professor
Marian College, Kuttikkanam

Intro
 The TFCI was set up on 1 February 1989 as public
limited company under the companies act by the
IFCI and some banks.
 It had paid up capital of Rs.50 crore. (now 80.72
crores)
 It is specialized in all India development financing
institutions, which provide assistance in the form of
rupee loans, underwriting and subscription to
industrial securities.
 Other form of assistance is foreign loans ,
guarantees, supplier credit.
 Head office: New Delhi

 Tourism Finance Corporation of India
Ltd.(TFCI) has been set-up as an All India
Financial Institution, pursuant to the
recommendations of “National Committee on
Tourism” set-up under the aegis of Planning
Commission in 1988.
 The main object of setting-up the specialised
financial institution was to expedite the growth
of tourism infrastructure in the country by
providing dedicated line of credit on long term

The philosophy behind
 “Tourism Finance Corporation of India
Ltd (TFCI)” was formed to function as a
specialised All India Development Financial
Institution to cater to the financial needs of
tourism industry.
TFCI’s VISION
 Help India in exploring the potential of Tourism as an engine
for economic growth including generation of employment
opportunities.
 Help India showcase her tourism treasure to the world
through creation of Tourism Infrastructure.
 Make India a preferred destination for globe-trotters by
expanding the horizon of Tourism.
 To make long term resources available for creation /

Institutes involved behind setting
up of TFCI are:-
The responsibility for setting-up of TFCI was
initially entrusted to IFCI Ltd. in participation
with other All India Financial Institutions and
Banks.
 IFCI
 SBI
 LIC
 Bank Of India
 United India Assurance Company

 TFCI has been operating profitably since its
inception.
 As on date, more than 60% of its equity is
jointly held by IFCI / LIC / State Bank of India /
Bank of India and other banks and financial
institutions,
 The majority being with IFCI who holds 39.10%
of equity.
 TFCI raises long term resources from the
market by way of Issue of Bonds besides
utilising internal accruals.

 The assistance sanctioned so far has helped
in creating over 46,000 rooms in approved
category of hotels which represents
approximately 1/3rd of the total rooms capacity
in the country.

 TFCI has successfully cumulatively sanctioned
assistance aggregating Rs.7815 crore upto 30th
September, 2015 to 773 projects mainly in
tourism.
 TFCI provides financial assistance by way of
rupee loan, subscription to equity / debentures
and corporate loans mainly to hotel projects,
amusement parks, ropeways, multiplexes,
restaurants etc.
 TFCI has expanded the scope of its activities by
including financing of infrastructure projects, real

Name of Shareholder %
I.Promoters/Promoters Group
(i)IFCI Ltd. 2.09
(ii)Life Insurance Corporation of India 5.72
(iii)The Oriental Insurance Co. Ltd 1.07
Total Promoters Holding 8.87
II.Non Promoters Shareholders
2.Mutual und 0.71
3.other Banks/Financial institutions 0.05
4.Foreign Portfolio Investors 10.67
5.Govt of India-IEPF Account 0.77
5.Bodies Corporates 31.42
6.Individual Shareholding (General Public) 42.53
7.Trust & Cooperative Society 0.02
8.NRI 4.96
Total Public shareholding 91.13
Grand Total 100

 Recently Delhi-based Non-Banking Finance
Company (NBFC) Redkite Capital Pvt Ltd and
Sajeeve Thomas purchased shares from IFCI

5 functional areas of TFCI
 Financial Services
 Advisory services
 Planning and policy support
 Developmental role
 Research & Consultancy

Tourism Project Financing
 TFCI provides all forms of financial assistance
for new, expansion, diversification, renovation /
modernization projects in tourism sector
services sector and related activities, facilities
and services.

Types of Financial Assistance
 Rupee Loans (including short-term, medium-
term & long-term loans).
 Subscription to equity / debentures.
 Guarantee of deferred payments.
 Advance against Credit Card Receivables.
 Takeover financing or Refinancing.
 Bridge Loan.

Norms for Financial Assistance
 TFCI normally considers financial assistance to
projects with capital cost of at least Rs.20 crore.
 But for providing financial assistance to heritage
hotels, restaurants, food courts, pubs, tour
operators, travel agents, transport sector, health
spa / centers, recreational facilities and renovation
/ upgradation / expansion, lower project cost could
also be considered.
 The repayment of the loan shall be over a period
of 8-10 years after allowing moratorium upto 2
years from the date of commencement of
commercial operations.

Other Financing
 TFCI provides all forms of financial assistance
for new, expansion, diversification, renovation /
modernization projects in industrial /
manufacturing sector, real-estate sector on
selective basis, services sector and related
activities, facilities and services.

Advisory Services
 Since its inception, TFCI provides high-quality
research and Consultancy services to the tourism
industry.
 In line with this, TFCI has been providing
Consultancy services to different central and state
agencies by to facilitate identification,
conceptualization, promotion / implementation of
specific tourism-related projects
 Besides, TFCI has been providing specific project-
related services to various private sector clients.
TFCI has also successfully handled projects
involving development of viable project concepts
around lakes / water bodies, development of a
multi-facility amusement park complex etc.

Project-related Services for Private
Sector
 Site evaluation studies.
 Market-potential assessment for tourism projects.
 Techno-economic feasibility studies.
 Loan / Equity syndication services.
 Financial restructuring of project proposals, review
and appraisal.
 Project implementation and monitoring services.
 Pre-opening technical and facility planning
services.
 Other project related services transfer of
management, franchise tie-ups, selection of
design / project / architectural consultants etc.

Planning and policy support
TFCI also co-ordinates and formulates
guidelines and policies related to financing of
projects. TFCI has pioneered and innovated
various products in financing the diverse
needs of the industry such as:
 the first Amusement-cum-Water Park at Mumbai,
 the first Water Sports Complex at Goa,
 the Palace on Wheels,
 the highly acclaimed spa The Ananda at Himalayas,
 the restoration of heritage resorts namely the Devigarh
Palace at Udaipur,
 conversion of Umaid Bhawan Palace into a resort hotel
etc.

Developmental role
 TFCI organizes seminars /participates in
tourism-related activities organized by Ministry
of Tourism, Government of India and by the
trade bodies /associations etc.
 TFCI supports Central government, State
Governments and Private Sector.

Research & Consultancy
TFCI also provides high-quality research and consultancy
services to the tourism industry in general and to the
investors in tourism industry in particular. Some of them
are:
 Tourism-potential studies and identification of tourism circuits.
 Preparation of tourism-development Master Plans for state /
travel circuit / destination.
 Tourist profiles and image-rating studies.
 Tourist-flow surveys to assess destination draws, infrastructure
gaps and defining agenda for development.
 Carrying out accommodation and other infrastructure
assessment, augmentation improvement studies.
 Sustainable tourism development, environment impact
assessment studies carrying capacity of studies of wild-life
sanctuaries, national parks and other sensitive / critical areas.
 Transaction advisory services for PPP projects.

Tfci lecture

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