(Bloomberg) -- Infrastructure Leasing & Financial Services Ltd., an Indian shadow banker that defaulted on its commercial paper obligation earlier this year, missed payments again on Friday.
The company, which helped fund India’s longest tunnel, defaulted on three non-convertible notes series, it said in a filing to the stock exchange, without disclosing the of the debt. It was also unable to meet an obligation for a letter of credit payable to IDBI Bank Ltd., the company said in a separate filing.
The mounting troubles at IL&FS have shaken confidence in the sector and rocked India’s stock markets on Friday. Investors jittery about the rare default in the nation’s money markets sold shares of financial companies. Dewan Housing Finance Corp. tumbled 43 percent, while the benchmark S&P BSE Sensex swung from a 1 percent gain to a decline of as much as 3 percent -- its wildest intraday move in more than four years -- before closing with a 0.8 percent loss.
IL&FS’s outstanding debentures and commercial paper accounted for 1 percent and 2 percent, respectively, of India’s domestic corporate debt market as of March 31, according to Moody’s Investor Services. Its bank loans made up about 0.5 percent to 0.7 percent of banking system loans, Moody’s said.
The beleaguered company first defaulted on commercial paper, then on short-term borrowings known as inter-corporate deposits. It has also failed to pay 4.5 billion rupees ($62 million) in ICDs to government-backed lender Small Industries Development Bank of India, people familiar with the matter said earlier this month.
Separately, the company’s unit IL&FS Financial Services Ltd. Managing Director Ramesh Bawa resigned, it said in a filing, without giving details.
©2018 Bloomberg L.P.
RECOMMENDED FOR YOU
POPULAR