IL&FS Financial Services (IFIN), a wholly-owned subsidiary of IL&FS, is looking to sell its external corporate loan book worth close to ₹5,000 crore, people familiar with the matter said. The process, aimed at reducing the overall debt of IL&FS, will be launched this week.
As of March 31, 2019, the non-banking finance company’s asset under management stood at ₹18,000 crore which includes external, internal loans and internal investments. The company is yet to declare its results for 2019-20.
“Entire external corporate loans of IFIN of around ₹5,000 crore will be auctioned through the bid process. The sale of the loans would be on cash consideration,” the report said.
The company’s external corporate loan book includes loans to over 70 companies that have become non-performing assets, the report said.
When contacted, IL&FS spokesperson said, “The company is launching a public process this week to invite bids for the sale of IFIN external corporate loan book.” According to the annual report of IFIN for 2018-19, it had a net loss of ₹13,272 crore as compared to a net profit of ₹9.5 crore in 2017-18. Its total borrowing as at end-March 2019 from various avenues (debt securities, bank loans, commercial paper, inter-corporate deposits) stood at ₹14,916 crore.
Last month, the debt-laden IL&FS Group had said it was able to address debt of just around ₹1,460 crore in the second quarter of 2020-21 as against an earlier estimate of around ₹8,800 crore during the period. It said the ₹7,300 crore shortfall in September quarter target has been rolled over for resolution in subsequent quarters.
The group, however, maintained its earlier estimates of addressing more than 50 per cent of the overall debt of over ₹99,000 crore as of October 2018, by the end of 2020-21.
