Mumbai, Jan. 17: Close on the heels of its agreement to offload the 7 per cent stake in the National Stock Exchange, IFCI Ltd has decided to sell its equity holding of 21 per cent in rating agency Icra through an initial public offering.

The company will sell its 21 per cent stake along with Specified Undertaking of UTI’s holding of 8 per cent in Icra, the institution has informed the stock exchanges.

IFCI and UTI’s collective stake sale in Icra would amount to 29 per cent, which would be sold off through the IPO. Reacting to the news, the shares of IFCI gained nearly 7 per cent to close at Rs 26.70 on the Bombay Stock Exchange today.

Last year, Icra, which is an associate of global rating agency Moody’s Investors Service, filed a draft prospectus with the Securities and Exchange Board of India for a public offer of 2,581,100 equity shares. The shares were to be offloaded by the existing shareholders.

While IFCI was then slated to sell more than 18.60 lakh shares, the financial institution today informed the stock exchanges that it would sell its entire holding.

IFCI was recently in the news when it offloaded 7 per cent of NSE’s equity to four institutional investors that included Goldman Sachs, NYSE, General Atlantic & Soft Bank. Prior to the sale, IFCI held 56,00,000 shares constituting 12.44 per cent of NSE's equity

Besides the above two, the company has not entered into any agreement, so far, to sell any strategic investments, including equity, in its associates or subsidiary companies, it said.

“However, in normal course of business, the company keeps on disinvesting, in small quantities, its holding in listed companies through stock exchanges and unlisted equity of borrower companies through negotiations,” it added.

IFCI is now in a turnaround mode and its financial performance has shown signs of improvement. The loss of Rs 325 crore in 2004-05 was brought down to Rs 74 crore at the end of March 2006. This, coupled with a sharp drop in NPAs and the recent stake sale in NSE, saw its shares climbing on the bourses on hopes that the company would stand to gain from unlocking its investments in various entities.