IFIN manages to recover Rs1,379 cr of bad loans; gross NPA at 97%

IL&FS Financial Services (IFIN), the non-banking financial arm of the beleaguered Infrastructure Leasing and Financial Services (IL&FS), has recovered Rs1,380 crore of overdue loans and dead investments, from around 30 third-party borrowers and group entities, as of end-November 2019.

IFIN has since reported a cash balance of Rs1,450 crore while its gross non-performing asset (NPA) by the end of November stood at 97 per cent, according to a recent affidavit filed by the Ministry Corporate Affairs (MCA) at the National Company Law Appellate Tribunal (NCLAT).
The MCA has submitted the fresh affidavit in the company law tribunal representing the new IL&FS board which took over the group in 2018.
Out of the total recovery, around Rs1,309.9 crore came from around 30 third party borrowers, it said.
"IFIN has been able to recover monies aggregating to Rs1,310 crore from third party borrowers comprising recovery of Rs1,050 crore under the credit exposure (including interest) and Rs260 crore under the investment exposure," the affidavit said.
"The cash balance as on November 30, 2019 stood at Rs1,450 crore (including other income and net of operating expenses) vis a vis opening balance of Rs237 crore."
Further, as of end-November, a total of 117 recovery actions had been initiated against third-party borrowers.
According to annual report of IFIN for 2018-19, the net loss was Rs13,272 crore, compared to a net profit of Rs9.5 crore in 2017-18. Net revenue fell 87 per cent to Rs288.9 crore, from Rs2,261.9 crore in FY18. Total borrowing as of end-March 2019 from various avenues (debt securities, bank loans, commercial paper, inter-corporate deposits) was Rs14,916 crore.
Further, it also mentioned that IFIN has entered into resolution with five third party borrowers wherein the entire principal outstanding of Rs6,100 crore would be repaid along with the applicable interest. Of the Rs6,100 crore an amount of Rs1,300 crore towards principal along with applicable interest has been recovered as on 30 November 2019 and an amount of Rs4,800 crore along with applicable interest is expected to be recovered in future, it said.
The principal amount owed by third party borrowers to IFIN as of 1 October 2018 stood at Rs8,356 crore.
In the revised affidavit, the Corporate Affairs Ministry has also urged the NCLAT to approve the revised formula for sharing resolution proceeds from the disposal of bankrupt IL&FS group firms among its creditors in a fair and equitable manner.
The revised mechanism would provide for the distribution of residual proceeds over and above liquidation value of assets to other than secured creditors.
The IL&FS Group and its subsidiary companies, which have about Rs91,000 crore in debt, is in the bankruptcy court following its defaults in 2018. This had a cascading effect on the entire financial sector in the country and triggered a liquidity crisis across NBFCs in the country.