Infrastructure term lender IFCI Ltd on Monday reported widening of its consolidated net loss to Rs 848.97 crore in the January-March quarter due to fall in income and change in its accounting policy.
The company had posted a consolidated net loss of Rs 584.19 crore in the corresponding quarter a year ago. Sequentially also, the loss was higher than Rs 717.99 crore in the third quarter ending December.
Total income of the lender during Q4FY21 plunged to Rs 15.76 crore as against Rs 858.99 crore in Q4FY20 and from Rs 610.12 crore in Q3 of the reported fiscal.
For the full FY2020-21, 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 upto March 31st 2021 shall be de-recognised on certain stage 3 assets. Accordingly, an amount of Rs 613.71 crore has been charged to 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.
The company reported a negative interest income of Rs (-)170.76 crore for the March quarter, to which it said the interest income is stated at net off expected credit loss (ECL) and for the current quarter it has become negative due to increase in LGD from 49.63 per cent (December 2020) to 57.59 per cent (March 2021).
LGD is the short form for loss given default. It is the amount of money a financial institution loses when a borrower defaults on a loan, calculated as a percentage of total exposure at the time of default.
IFCI shares closed 1.36 per cent higher at Rs 14.89 apiece on BSE.