Il&fs presentation
- 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.
Editor's Notes
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