<p>Government may initially infuse Rs 1,000 crore in the proposed Telecom Finance Corporation (TFC) to address funding challenges facing the sector.<br /><br /></p>.<p>"The Authorised capital is proposed as Rs 10,000 crore, out of which the initial paid up capital shall be Rs 1,000 crore," an official source told PTI.<br /><br />"The initial equity capital is proposed to be sought through budgetary support. Initially, the government of India will have 100 per cent shareholding in TFC," he added.<br /><br />TFC is proposed to be set-up on the lines of sectoral finance bodies such as Power Finance Corporation and Tourism Finance Corporation of India.<br /><br />As per the plan, TFC will be registered as non-banking financial corporation and non deposit infrastructure finance company.<br /><br />"Other financial institutions and banks could be offered equity participation later on in order to spread the financial burden and encourage broader participation of the financial community," the source said.<br /><br />The fund infusion for TFC is proposed to be done through taxable as well as tax-free bonds, term loans from banks and other financial instruments, off-shore borrowings from multilateral agencies such as Asian Development Bank, International Monetary Fund and the World Bank.<br /><br />The government estimates that the debt market in telecom sector under the 12th Five Year Plan (2012-17) should be around Rs 7.55 lakh crore and TFC will initially target 5 per cent of this debt market.<br /><br />"This will translate into a loan portfolio of Rs 38,000 crore in 5 year period, approximately Rs 7,000 crore annually," the source said.<br /><br />According to recent presentation given by GSM industry body COAI to DoT, the debt on telecom sector stood at Rs 1,85,720 crore at end of 2011-12, which included debt of Rs 93,594 crore from domestic source and Rs 92,126 crore from external sources.<br /><br />TFC will target to maintain debt equity ration of 5 for first five year of its establishment.<br /><br />"The other sectoral finance corporation operate on spread between borrowing and lending rates of approximately 200 to 250 basis points. The TFC will target a similar interest margin in its operations," the source said.<br /><br />TFC will look in to financing need in the sector mainly related spectrum, network roll-out and telecom equipment manufacturing.</p>
<p>Government may initially infuse Rs 1,000 crore in the proposed Telecom Finance Corporation (TFC) to address funding challenges facing the sector.<br /><br /></p>.<p>"The Authorised capital is proposed as Rs 10,000 crore, out of which the initial paid up capital shall be Rs 1,000 crore," an official source told PTI.<br /><br />"The initial equity capital is proposed to be sought through budgetary support. Initially, the government of India will have 100 per cent shareholding in TFC," he added.<br /><br />TFC is proposed to be set-up on the lines of sectoral finance bodies such as Power Finance Corporation and Tourism Finance Corporation of India.<br /><br />As per the plan, TFC will be registered as non-banking financial corporation and non deposit infrastructure finance company.<br /><br />"Other financial institutions and banks could be offered equity participation later on in order to spread the financial burden and encourage broader participation of the financial community," the source said.<br /><br />The fund infusion for TFC is proposed to be done through taxable as well as tax-free bonds, term loans from banks and other financial instruments, off-shore borrowings from multilateral agencies such as Asian Development Bank, International Monetary Fund and the World Bank.<br /><br />The government estimates that the debt market in telecom sector under the 12th Five Year Plan (2012-17) should be around Rs 7.55 lakh crore and TFC will initially target 5 per cent of this debt market.<br /><br />"This will translate into a loan portfolio of Rs 38,000 crore in 5 year period, approximately Rs 7,000 crore annually," the source said.<br /><br />According to recent presentation given by GSM industry body COAI to DoT, the debt on telecom sector stood at Rs 1,85,720 crore at end of 2011-12, which included debt of Rs 93,594 crore from domestic source and Rs 92,126 crore from external sources.<br /><br />TFC will target to maintain debt equity ration of 5 for first five year of its establishment.<br /><br />"The other sectoral finance corporation operate on spread between borrowing and lending rates of approximately 200 to 250 basis points. The TFC will target a similar interest margin in its operations," the source said.<br /><br />TFC will look in to financing need in the sector mainly related spectrum, network roll-out and telecom equipment manufacturing.</p>