Six months after taking charge of the troubled IL&FS, its new board — led by Uday Kotak, Kotak Mahindra Bank MD — on Wednesday said despite launching a number of resolution processes, it continues to face tough challenges since there are layers of verticals across geographies with multiple stakeholders.
Citing the challenges, Kotak said the gross non-performing assets of IL&FS Financial Services has gone up to a staggering 90 per cent by the end of December 2018 compared to 5.3 per cent in March 2018. He said as on March 31, 2019, IFIN’s external exposure is Rs 10,656 crore whereas its group exposure is Rs 6,849 crore.
“One of the things that would have struck many of you is that a company which reported a GNPA of 5 per cent in March 2018, has reported 90 per cent GNPA in December 2018. This is quite unusual by any standards. That’s the challenge we have faced,” Kotak, who is the non-executive chairman of the IL&FS board, said.
The board members, who briefed the media, said they have already received planned binding bids for renewable energy assets and will have such bids for arms like ITNL, IIML, IETS and ITPCL in the next two months. The IL&FS group has already launched resolution processes for IPTF Fujairah, Parkline Dubai and IIPL USA, and plans for OTPC, Paradip Refinery Water, ILFS Tech, LARES Philippines, ILFS Envt, Mangalore SEZ, Chonqing Yuhe Expressway, GIFTCL, Tamil Nadu Water & New Tirupur and CPG BPO are under discussion. The board also said it has appointed CS Rajan as the managing director and Vineet Nayyar has been re-designated as executive vice-chairman.
IL&FS, which has an outstanding debt of Rs 99,354 crore, sees recovery of loans a big challenge as a “large portion of external lending is to relatively weak clients”. The firm has a debt to equity ratio of 10:1 as on March 31, 2019. The group as an operational action has classified 169 domestic entities of the group into ‘Green’, ‘Amber’and ‘Red’ categories.—FE