IL&FS is an Indian infrastructure development and financial company with over 250 subsidiaries that has taken on significant debt over time. In 2018, IL&FS began defaulting on some of its debt obligations, triggering fears of a liquidity crisis in financial markets. The government then superseded IL&FS's board and appointed a new board led by Uday Kotak to address the company's debt issues and stabilize the financial markets.

1. Presented By :
Subhasish Mahakud(18MBARB067)
Rajesh Mondal(18MBARB040)
Date- 12/09/2019

2. Introduction about the company
IL&FS (Infrastructure leasing & Financial service ltd) is an Indian
infrastructure development and financial company.
It operates through more than 250 subsidiaries including IL&FS
investment managers, IL&FS financial services and IL&FS
Transportation networks India Limited(ITNL).
It was formed in 1987 as an “RBI registered core investment
company” by 3 Financial Institutions to provide finance and loans for
major Infrastructure Projects.
1.Central bank of India(CBI)
2.Housing development finance corporation(HDFC)
3.Unit trust of India(UTI)

3. Introduction about the company
IL&FS has 256 group companies as of 2018 including subsidiaries,
joint venture companies and associate entities.
Through on the surface the company appears to have 24 direct
subsidiaries and 141 indirect subsidiaries.
IL&FS has several projects in different sectors including
Transportation, Area development, e-governance, Health Initiatives,
Cluster development, Finance, Power ports, water & waste water
management, Urban Infrastructure, Environment, Education and
Tourism.

4. Big Projects
GIFT CITY (Gujarat International Finance Tech- CITY)
Ladakh to Kashmir Tunnel(Asia’s largest Bi-directional tunnel)
Building oil Terminal(3rd largest petroleum storage & trading centre in
the world)
Jammu - Srinagar highway(India’s longest and safest road tunnel)
Chenani – Nashri Tunnel

5. SHARE HOLDING PATTERN
INSTITUTIONAL SHARE HOLDERS STAKE
LIC 24.34%
ORIX CORPORATION(JAPAN) 23.54%
ABU DHABI INVESTMENT AUTHORITIES 12.56%
HDFC 9.02%
CENTRAL BANK OF INDIA 7.67%
SBI 6.42%
GOVT. OWENED FIRMS 40%

6. HOW DO THEY FUND THEMSELVES
BORROWINGS
LONG TERM
SHORT TERM

7. WHAT WENT WRONG
• Total consolidated Debt – 91000cr.
• In June 2018 IL&FS Transport networks default the payment to bank
for the 1st time.
• IL&FS had problems in paying debt/interest to bank.
• IL&FS defaulted 4000cr. Debt obligation from bank and short term
deposites.
• It also defaulted 450cr. Worth of inter-corporate deposits to SIDBI.
• In 12th sept. 2018 IL&FS has defaulted in payment of interest more
than 7 times so far.
• The D/E ratio was 18(Hyper burden).

8. REASON FOR THE CRISIS
Improper management of company’s resources by top level
management.
Top managements get paid high amount of salary.
It’s a shadow bank, thus it has less regulatory compliance.
Cost escalation due to project delays.
Only 1 meeting of risk analysis of the firm from past 8-9 years.
Problems in land acquisitions for the project.
They were taking short term loans to pay the long term loans.

9. IMPACT OF THE CRISIS
• The market indices Sensex and Nifty fell due to it.
• The default in payments by certain group entities of IL&FS have
triggered fears of liquidity crisis in the financial markets.
• 60% fall in the shares of housing finance companies like DHFL.
• Shares of L&T Finance, Bajaj Finance etc. were down in the range of
14-15%.
• Many corporates, MFs, Insurance company have invested in CPs &
NCDs of the IL&FS group. So default in their payments affects the
overall sector.

10. STEPS TAKEN BY GOVERNMENT
• RBI is reportedly conducting a forensic audit into IL&FS books of
accounts.
• RBI infuse open market operations.
• On 1st oct 2018 Govt. of India took steps to take control of the
company .
• Govt. superseded the existing board of debt laden IL&FS with six new
board members, announcing Kotak Mahindra bank MD & CEO UDAY
KOTAK as chairman of the board.