IL&FS is sitting on a debt pile of around Rs 91,000 crore, out of which Rs 57,000 crore are bank loans alone.
Infrastructure Leasing & Financial Services or IL&FS is deep down in troubled waters. The IL&FS group has a debt burden of Rs 91,000 crore that has created havoc among the investors. Modi government on Monday replaced the board of IL&FS after its failure to honour debt obligations. But if you are still confused about the mess. Let us answer your queries about the huge mess.
What is IL&FS?
IL&FS or the Infrastructure Leasing & Financial Services is one of the leading infrastructure financing and construction firms. State-owned LIC is the largest shareholder with a fourth of the firm's equity, while Japan's Orix Corporation owns 23.5%. Other stakeholders are Abu Dhabi Investment Authority (12.5%), IL&FS Employees Welfare Trust (12%), HDFC (9.02%), Central Bank of India (7.67%) and State Bank of India (6.42%). These figures are till the end of March 2018.
What exactly happened?
IL&FS is sitting on a debt pile of around Rs 91,000 crore, out of which Rs 57,000 crore are bank loans alone. It has sent shockwaves through the NBFC sector when it defaulted on some of its debt obligations in recent weeks, leading to rating agency ICRA to downgrad ratings of its short-term and long-term borrowing programmes.
IL&FS has suffered a series of downgrades in recent months - and there are growing concerns that many of these firms took on excessive credit risk by lending to people with little means of paying them back. There are also growing questions about whether lax regulation has allowed some of these firms to be used for money laundering.
What did the government do?
The government seized the control of the debt-trapped company Monday in a Satyam Computer style takeover and superseded its board and appointed a new one led by banker Uday Kotak. The other members of the board include former Sebi chairman GN Bajpai, ICICI Bank non-executive chairman GC Chaturvedi, IAS officer and the director general of shipping Malini Shankar and Vineet Nayyar who turned around Satyam Computers for the government) and veteran auditor Nandkishore.
The finance ministry official said the priority for the board will to assess the company's financial situation and report the same to the government over the next 15 days. The government has also ordered an investigation by the Serious Fraud Investigation Office into the affairs of group and its over 160 subsidiaries, the source added. The official further said the board will look into long-term debts of the company and find out options to restructure the same.
The newly-constituted board of the crisis-ridden IL&FS is likely to hold its maiden meeting on Thursday to thrash out a turnaround plan.
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 "Rs 91,000-crore IL&FS crisis: What is it?")
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