Tourism Finance Corporation Of India (TFCI): Spanning A Trek Alongside TFCI’s Illustrious Journey As India’s Premium NBFC

The Swift Rise of the Tourism Sector in India

India has been a travel haven, for tourists and travelers throughout the world, right from ancient times to the present day, owing to its rich cultural heritage and boundless beauty. With a diverse mix of majestic mountains, roaring rivers, valleys, deserts, forests, lustrous lakes, breathtaking beaches and tropical islands, this country has all that a vacationer seeks and is bound to cherish for a lifetime.

Hence, owing to this fact and the limitless possibilities it presents, the Tourism Sector in India became one of the most crucial in the country, spearheading the nation’s economy. According to The World Travel and Tourism Council (WTTC), tourism generated $194 bn or 6.8% of India’s GDP in 2019 and supported 39.80 Mn jobs which is 8 % of its total employment, in the Pre-COVID World.

TFCI - India’s Premium Tourism Financing Institution

Given the extraordinary growth that tourism in India was likely to undertake, it was only natural for the leaders of Independent India to lay groundwork on building a structure that will continue to bring in revenue and boost the economy of the country. With this end in mind, the National Committee on Tourism began to lay brick upon brick in the form of policies to boost Tourism in India.

The final outcome of this work was the birth of Tourism Finance Corporation of India (TFCI), a specialized financing institution, set-up in 1989, which has since been instrumental in the creation of tourism infrastructure throughout the country, generating thousands of employment opportunities and buzzing tourism hubs.

Over the last three decades, TFCI played a pivotal role in developing tourism infrastructure in the country through funding to diverse segments including niche areas such as – heritage tourism, cruises, adventure, medical, wellness, sports, MICE, eco-tourism, film, rural and religious tourism etc.

TFCI: A Catalyst in Countless Flourishing Tourism Projects

TFCI has acted as a catalyst in the creation of infrastructure in the Indian hospitality segment since its inception. It has also enabled various businesses to channelize their investments into different segments and locations of the tourism industry. Set-up by a group of government organizations like IFCI, LIC, OIC, SBI, BOI, Canara Bank, etc., TFCI played an active role in creating many firsts in the Tourism sector for the country, with projects that have proved to be some of the most popular tourism attractions in India. Some of these firsts include the Indian Railways’ Palace on Wheels, Esselworld, Spa cum wellness resort Ananda in the Himalayas and many more, that are indeed known as one-of-a-kind offerings in the hospitality sector globally today.

The premier financing institution has assisted plethora of branded hotels in India till date and has been associated with almost all major domestic as well as international brands like ITC, Leela, Taj, Lalit, Lemon Tree, Hyatt, Marriott, Hilton, Radisson, Holiday Inn, etc.

With a view to create the necessary infrastructure and augment demand, TFCI has also acted as an advisor to the Central Government of India & multiple State Governments and their affiliated agencies to help tourism flourish in the country.  

To name a few undertakings, it has been associated with Ministry of Environment & Forests (GoI), Government of Gujarat, Gujarat State Tourism Development Corporation, Tamil Nadu Tourism Development Corporation, MP State Tourism Development Corporation Ltd., Delhi Tourism Transport Development Corporation, Jharkhand Tourism Development Corporation, Government of Himachal Pradesh etc. TFCI had also advised Ministry of Railways for launching and managing pan-India luxury train services.

An all-inclusive growth

TFCI has been in the forefront to assist in building a sustainable infrastructure to bridge the divide between financial constraints and upcoming projects.  In order to drive an inclusive growth, one of the key long-term visions of TFCI is to build sustainable growth strongholds for Micro, Small and Medium Enterprises (MSME) in the country. MSME segment continues to benefit and strengthen itself with ample assistance in the form of financial lending from TFCI, which has nearly 90% of its hospitality portfolio from the MSME category itself.

As a specialized NBFC, TFCI has a vision to fully utilize the potential of tourism in India and roll the wheels of economic growth faster to enable generating more opportunities for employment and sustainable livelihood. This has paved the way for successful execution of promotional activities at tourist attractions, clarity in true assessment of market potentials, building of sustainable infrastructure and feasibility studies. As a part of its lending philosophy, TFCI continues to provide financial services and create value within the Hospitality and allied sectors.  These are believed to not just create the right environment towards better tourism but also generate more employment, thereby giving another boost to the economy.

Providing Exceptional Service Amidst COVID-19

Dreams are fulfilled with hard work and TFCI has been able to expand its foothold onto the tourism landscape by assisting more than 900 projects till date. Further, as the country starts to recover from the COVID impact, several affected tourist destinations are getting back on their feet. In these unprecedent times, TFCI has proactively assisted its existing portfolio by extending support through additional financing under various schemes like Government guaranteed ECLGS scheme, RBI Covid package besides extending additional financing wherever required to enable the borrowers to tide over temporary liquidity mismatches till stabilization of operations.

During the pandemic, its exceptional service led by eminent leaders with diverse experience became the greatest asset and strongest pillar of support to cross over the Covid 19 situation, providing a firm backbone for the hospitality domain amidst tough times.

Whilst continually offering its services amidst the crisis, TFCI also managed to continue healthy profitability. As on 31st March 2021, its Loan Book stood at Rs 1,977 Cr (of which 84% is towards MSME segment) with fresh disbursements of Rs 457 Cr in FY21. It remained robust financially, despite the challenging environment, with a Profit After Tax of Rs. 81 Cr.  during FY21.

Furthermore, around 79 % of its asset under management was towards tourism and allied sectors with exposure in hotels, resorts, convention centers, restaurant chains, amusement park, etc. Government led initiatives like introduction of ECLGS scheme, providing great relief to contact intensive sectors like hospitality, etc. are likely to play pivotal role in quickly reviving the growth numbers to what they were before the pandemic, through the proactive assistance of TFCI.

TFCI: A Unique Success Story Creating Countless Success Stories:

The Tourism sector has been recognized as a key contributor to the country’s GDP, with an ever-increasing capacity to employ millions in the strong MSME segment. TFCI has been instrumental in the same, through its role in funding countless MSME Projects across the country.

India’s leading Financial Institution was also instrumental in funding the restoration and transformation of Royal Heritage sites such as Umaid Bhavan, Devigarh Fort, Chomu Haveli, Jehan Numa Palace into successful Renovation projects. Entertainment Centers and Waterparks such as Nicco Park, Shanku’s Water Park, Kishkinta – Kingdom of Fun, Black Thunder Water Park, Worlds of Wonder, to name a few, were made a reality with the assistance of TFCI. Premier hospitality properties like Taj Exotica in Goa and CHG Marari Beach in Kerala are stellar examples of efforts that saw immense success with assistance from TFCI.

What makes TFCI stand out, is the brilliant and highly experienced and professional/independent team of board members. The executive team, led by Mr Anirban Chakraborty (MD&CEO) has the required sectoral knowledge that ensures that feasible tourism projects are flawlessly conceptualized and structured to yield value to all stakeholders. A key benefit of partnering with TFCI is that it is well aware and takes due recognition of the unique funding requirements of this industry including longer gestation period, seasonal cashflows etc. thereby appropriately structuring each deal.

Flying Higher…

As a premier institution that has extensively promoted the infinite scope of Indian Tourism, TFCI is in an exciting place today. It is also aiming to diversify further post Covid-19, with a view to expand its offerings in other related sectors viz., healthcare, education, logistics, etc., without compromising on its strength as a major lender for tourism sector. The institution is now looking forward to go beyond tourism financing and is looking at TFCI 2.0: Diversifying for Growth.

At TFCI, the Aatmanirbhar Bharat mission is increasingly becoming the leading voice that witnesses a passion to drive growth amongst MSME segments and ensure that the backbone of the country’s economy is well funded and provided with diligent guidance. In line with its boundless growth and ambitious expansion plans, TFCI will be looking at various financing options for the MSME sector, including acquisition financing, structure financing and also pursue activities to enhance the fee-based income. The Company intends to grow its balance sheet size by aggressively pursuing the emerging opportunities which would enable it to leverage its capital (CAR of 39.87% as on March 31, 2021) and thereby improve return on equity.

With three decades of Industry leadership, robust growth and committed allied partners, TFCI embarks and continues to achieve its objective of making India the most favored and loved travel destination for tourists around the globe. On the asset side, it has a portfolio of long-standing relationships who greatly value the association and the support shown by TFCI during this pandemic.

As India and the world recover from the recent crisis, TFCI remains a great pillar of strength for the country’s Tourism Segment, as it bounces back from its COVID aftermath. With a solid foundation, TFCI has a steady vision to actively back and fiercely support upcoming ventures in the Indian Hospitality domain and allied sectors. It continues to create a legacy of spearheading exceptional projects that have transformed Indian Tourism, whilst being synonymous with expansion, diversification, and modernization.