Road construction takes place near the IL&FS building in Mumbai. (Photographer: Abhijit Bhatlekar/Bloomberg News)

ICRA Junks Rs 12,000-Crore Of IL&FS Group’s Borrowing Programmes

Domestic rating agency ICRA junked debt programmes of the already crippled Infrastructure Lending & Financial Services Ltd. group and one of its arm, while removing the entire group’s firms from its rating watch.

IL&FS’ short-term and long-term borrowing programmes, worth over Rs 12,000 crore, were junked by the rating agency. This includes an non-convertible debenture issue of Rs 5,225, a commercial paper programme of Rs 2,500 crore and long term loans of Rs 350 crore. These have been removed from rating watch as well.

This is the second successive downgrade to junk status by ICRA in a fortnight. The IL&FS group is sitting over a debt pile of over Rs 91,000 crore.

The infrastructure financier has been facing liquidity issues for some time and has defaulted on a Rs 1,000 crore loan from the Small Industries Development Bank of India earlier this month. Again, on September 14, it defaulted on a Rs 105-crore CP redemption and the next day, it defaulted on Rs 80-crore inter-corporate deposits.

Its subsidiary IL&FS Financial Services has a combined borrowing plan of Rs 4,000 crore through commercial papers and this has also been junked to D. It has a standalone debt of Rs 17,000 crore.

The rating revision takes into account the recent regularities in debt servicing by the company. The liquidity position at the group level remains under challenge given the delays in raising funds from the promoters in accordance with the earlier stated plans, deterioration in the credit profile of key investee companies and sizeable debt repayment obligations
ICRA

It can be noted that the group had planned a Rs 4,500 crore rights issue and Rs 3,500 crore long-term credit from its shareholders. But these plans are yet to be finalised. An emergency board meeting on Saturday failed to secure immediate liquidity support.

Also read: IL&FS Fundraising Plans May Have To Wait For At Least A Month