IL&FS financial arm's GNPAs touch 90% in Dec against 5% in Mar 2018: Board

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The Infrastructure Leasing & Financial Services (IL&FS) board on Wednesday presented a status report on the group’s financials and the asset monetisation plan, six months after the government-appointed panel took over the reins of the company. The board said the asset monetisation plan for the beleaguered infrastructure finance player was in good shape as far as the assets put up for sale were concerned, and that it expected the resolution process to accelerate.

The board also said the financial arm of the group had posted gross non-performing assets (GNPA) of 90 per cent in December 2018 as against 5.3 per cent in March 2018, and the group’s net worth had seen significant erosion. IL&FS Financial Services’ (IFIN’s) GNPA as a percentage of advances would be the highest by any financial institution involved in lending.

“I have heard of double-digit NPAs but 90 per cent GNPA is very unusual by any standards. That's the challenge that we have faced,” said Kotak Mahindra Bank MD & CEO Uday Kotak, who is also non-executive chairman of the IL&FS group.

The total external exposure of IFIN was estimated at Rs 10,656 crore at the end of March 2019, of which its exposure to group companies stood at Rs 6,849 crore. The board said it was exploring all options, including legal process and one-time settlement, to recover the dues.

The net worth of the group, which was around Rs 9,000 crore in March 2018, has reduced sharply. “It is reasonable to assume that there is significant erosion to net worth and in many many cases there could be a significant in negative value," said Kotak.


 At consolidated level, the IL&FS group had an outstanding debt of Rs 99,354 crore at the end of September 2018. About half of this, or Rs 48,470 crore, was in just four holding companies -- ILFS, IFIN, IL&FS Energy Development Co, and IL&FS Transportation Networks (ITNL)...Read More