Shares of IFCI Ltd. continued to surge on Friday after the public sector term lender said that that its Board of Directors had appointed Ernst & Young (E&Y) for advising on the induction of a strategic investor in the company.

IFCI is in talks with some foreign banks to sell a strategic stake and E&Y has been appointed for choosing the strategic investor, a top IFCI official was quoted as saying by an international news agency.

Several foreign banks like Citigroup, Barclays and ABN Amro Bank have evinced interest in IFCI, The Hindustan Times newspaper reported earlier on Friday. IFCI shares climbed 7% to end at Rs31 after touching a high of Rs32.15 while the benchmark BSE Sensex was down 0.2% at 13,285.93 after being as high as 13,386.95 and as low as 13,196.9. IFCI shares are up 26.3% in the week while the Sensex gained close to 6.9% on the week.

IFCI has been in the thick of things of late and has been hitting the headlines quite often in the past few weeks amid reports of its turnaround and the Government's attempts at reviving the troubled term lender. In fact, the Centre has extended a helping hand by announcing a Rs13bn grant for IFCI in the Union Budget for the year 2007-08. The interest in the stock has increased after IFCI improved its financials last year.

IFCI posted a net profit of Rs2.3bn in the first nine months of the current financial year, compared with a loss of Rs1.6bn during the same period of the previous financial year. In 2005-06, it had posted a loss of Rs2.66bn. IFCI still has accumulated losses of about Rs43bn as of December 31, 2006.

IFCI has also received a boost after the company partly sold its stake in the National Stock Exchange (NSE) to the NYSE Group. It also plans to sell shares in credit rating agency ICRA, which has come out with its IPO. IFCI also holds stake in LIC Housing Finance Ltd., Stock Holding Corporation of India Ltd. (SHCIL), Discount and Finance House of India Ltd. (DFHI), OTCEI, Securities Trading Corporation of India (STCI), GIC Grih Vitta Ltd., and Bio-tech Consortium Ltd. (BCL).