IL&FS Group Commences ₹5,000 Crore Payout to Creditors, Including InvIT Units
The IL&FS Group, one of India’s leading infrastructure conglomerates, has begun an interim distribution of ₹5,000 crore as part of its ongoing debt resolution efforts. This payout consists of ₹3,500 crore in Infrastructure Investment Trust (InvIT) units and ₹1,500 crore in cash, and is being distributed to eligible creditors. This marks a crucial step in the resolution of the group’s massive debt, and is a result of the ongoing efforts to reduce liabilities and recover funds for creditors.
The payout is being carried out primarily by three of IL&FS Group’s key holding companies—Infrastructure Leasing and Financial Services (IL&FS), IL&FS Financial Services (IFIN), and IL&FS Transportation Networks (ITNL). These entities collectively manage a significant portion of the group’s debt, and are responsible for the distribution to major creditors, including those holding public funds. A key feature of this payout is the issuance of InvIT units by Roadstar Infra Investment Trust, a body which holds six key road assets valued at ₹8,576 crore. The InvIT units are being distributed through a private placement, in compliance with Securities and Exchange Board of India (SEBI) regulations. These units will eventually be listed on the stock exchange, further facilitating the recovery process for the creditors.
The InvIT route, which allows for the pooling and monetisation of assets, is expected to provide liquidity to creditors sooner than the final resolution of all assets. This move resolves six Special Purpose Vehicles (SPVs), including IL&FS, IFIN, ITNL, and Sabarmati Capital One, which had previously extended loans to these entities. Following this payout, the total debt resolved across the IL&FS Group companies will amount to approximately ₹43,000 crore, surpassing 70% of the group’s overall debt resolution target of ₹61,000 crore. This payout adds to the ₹12,000 crore already disbursed to creditors across 12 IL&FS Group entities over the past two years under the approved interim distribution framework. The group has now distributed a total of over ₹17,000 crore across its entities.
Nand Kishore, Chairman and Managing Director of IL&FS Group, commented on the significance of this milestone. “This payout marks a crucial turning point for the group. It facilitates the timely release of funds to creditors, including several public funds at the holding company level, without waiting for the final resolution of the remaining assets. The public interest board is working tirelessly to expedite the resolution process and is confident of meeting the total debt resolution target of ₹61,000 crore,” he said. The payout also brings relief to a variety of creditors, including banks, financial institutions, and public funds, many of which had been waiting for funds from the distressed group. The resolution plan, with its focus on assets like road infrastructure, will significantly impact the creditors’ recoveries and aid in the group’s long-term financial rehabilitation.
For the creditors, especially those with public funds invested in the company, this payout is an encouraging sign that the group is making real progress. While many steps remain to fully resolve the group’s debt, the distribution of both cash and InvIT units signifies that the recovery process is moving forward, with greater transparency and a focus on timely releases of funds. IL&FS’s debt resolution journey is a critical one for the Indian economy, given the size and complexity of the group. This latest development brings a sense of optimism that the group’s liabilities will be addressed, benefiting both creditors and stakeholders in the coming months.
