Infrastructure Leasing & Financial Services Limited (IL&FS) is an Indian infrastructure development and finance company. IL&FS, incorporated in 1987, is a large Systemically Important Non-Deposit Accepting Core Investment Company (CIC-ND-SI). It has numerous infrastructure assets and has played a major role in infrastructure development and financing in the country. It has 169 group companies, as in 2017-2018, including subsidiaries, joint venture companies and associate entities.
A series of defaults by IL&FS Group companies in August and September, 2018 on term-deposits, short-term deposits, inter-corporate deposits, commercial paper and non-convertible debentures and the rating downgrades in some and default on some other financial instruments has resulted into massive effect in the financial markets causing redemption pressure on the mutual funds, which held such financial instruments and has also adversely impacted the sentiments on the stock markets, money markets and debt markets.
Its projects includes some of the largest infrastructure projects in India including India’s longest tunnel, Chenani-Nashri Tunnel, which was opened for traffic in April 2017.
There is an emergent need to immediately stop further financial defaults and also take measures to resolve defaulted dues to the claimants. This would require a combination of measures of
- asset sales,
- restructuring of some liabilities
- fresh infusion of funds by the investors and lenders.
The confidence of the financial market in the credibility of the IL& FS management and the company needs to be restored.