• Infrastructure Leasing & Finance
• IL&FS was founded in 1987.
• initially promoted by the Central Bank of
India (CBI), HDFC, UTI, .
• Its international presence includes
offices in Singapore, Spain, London and
Dubai, as well as strong network partners
in the USA, Tokyo, Philippines and Abu
5. WHO OWNS IL&FS ?
• IL&FS has institutional shareholders
including SBI, LIC, ORIX Corporation of
Japan and Abu Dhabi Investment Authority
• As on March 31, 2018, LIC and ORIX
Corporation are the largest shareholders in
IL&FS with their stakeholding at 25.34 per
cent and 23.54 per cent, respectively.
• Other prominent shareholders include ADIA
(12.56 per cent), HDFC (9.02 per cent), CBI
(7.67 per cent) and SBI (6.42 per cent).
6. What hit IL&FS ?
Defaulted in payment obligations of-
• Bank loans (including interest),
• Term and short-term deposits and
• Failed to meet the commercial paper
(Due on September 14).
On September 15, the company reported that it
had received notices for delays and defaults in
servicing some of the inter corporate deposits
accepted by it.
Rating agency ICRA downgraded the ratings
7. WHAT AILS IL&FS ?
IL&FS used its first mover advantage to lap up projects.
It has built up a debt-to-equity ratio of 18.7.
The group with at least 24 direct subsidiaries, 135 indirect
subsidiaries, six joint ventures and four associate companies is
sitting on a debt of about Rs 91,000 crore.
Troubles of IL&FS is complications in land acquisition.
The 2013 land acquisition law made many of its projects
Lack of timely action exacerbated the problems.
8. The way Ahead ……
Leaving it at the mercy of shareholders — Life Insurance Corp of India,
Housing Development Finance Corp, Japan’s Orix Corp and Abu Dhabi
Investment Authority — who have yet to sign off on the Rs 4,500-crore rights
Received firm offers for 14 projects,
(it would be able to bring down debt by about Rs 30,000 crore).
Domestic credit crisis inflicting wounds on banks and mutual fund.
long-term debt facilities of IL&FS dropped from AA+ (investment grade) to
BB (below investment grade).
short-term ratings sank to A4 from A1+ on September 8th/9th by ICRA and
9. BIGGER LOSSER IN THE EPISODE ?
Mutual Fund investors who are investing in Mutual
Fund Schemes was the biggest losers.
(Mutual Funds are investing in commercial papers, NCDs, Corporate Deposits
with such companies in large size).
Investors of stock markets were also the biggest
Many infra company stocks have fallen up to 60%
of its share prices.
(IL&FS Transport, IL&FS Investment Managers, IL&FS Engineering, DHFL,
Indiabulls real estate, YES Bank, Reliance Infra).
If Govt of India would not have
taken the control of IL&FS board,
entire Indian mutual fund
industry would have been
10. ACTION TAKEN
The government has moved National Company Law
Tribunal (NCLT) to supersede the IL&FS board and
change the company management
It has proposed to appoint 10 nominee directors who
will report to the NCLT
The NCLT has appointed a six-member panel to take
over the management at IL&FS with immediate
The panel was headed by managing director of Kotak
Mahindra Bank - Uday Kotak.