Around 14 funds and institutions, including eight from overseas, have shown interest in buying a strategic stake in India's oldest term lending institution, IFCI Ltd, with a few even ready to pick up 51 per cent equity.

According to market sources, 5-6 Indian funds and institutions and 7-8 foreign entities have approached Ernst and Young, which has been appointed as advisor by IFCI for strategic investment in the company.

The response is so good that every second or third day, Ernst and Young is approached by a fund or institution expressing interest in buying stake in IFCI, the sources said.

Though E&Y has been appointed for advising IFCI on induction of strategic investors, the sources said the country's oldest financial institution is even ready to sell controlling 51 per cent stake with management rights.

The decision to sell 51 per cent stake will be taken after receipt of firm offers from the suitors, sources said. Those interested in buying a stake in IFCI has sounded E&Y to include them in Investors Memorandum, to be prepared by the consultant.

However, Punjab National Bank and IDBI have so far not evinced interest in buying strategic/controlling in IFCI. Earlier there was a proposal to merge IFCI with PNB or IDBI, but it was not pursued.

After reports of the appointment of E&Y as consultant, the IFCI share has been witnessing buying interest in the markets. The share, which closed at Rs 28.95 a day before the news, is trading at Rs 36.70.

Financial institutions hold about 40.32 per cent stake in the company as on December 2006, which includes 8.4 per cent stake of LIC.

The IFCI, which has been ailing for quite some time, has accumulated losses of Rs 4,300 crore as on December 31, 2006.

The institution, however, did well in the current financial year posting a net profit of Rs 230 crore in April-December 2006 as against a loss of Rs 160 crore during the corresponding period last year.

The government in Budget 2007-08 announced Rs 1,300 crore to meet restructuring liabilities of IFCI including payment for outstanding loan of Rs 880 crore.