Debt-laden Infrastructure Leasing and Financial Services (ILFS) has sought to roll over its corporate deposits as it has failed to repay more than three-fourths of the institutional, one-year term deposit of Rs 250 crore, a market source with direct knowledge of the matter told ET.Small Industries and Development Bank of India (SIDBI) has received only Rs 50 crore while the remaining Rs 200 crore is not yet credited, said the person, who did not wish to be identified.Email queries sent to ILFS and SIDBI remained unanswered until the publication of this report.Although a formal request for rollover is yet to arrive, they have sounded out to SIDBI executives, said the source.A formal communication may come this weekend.SIDBI, the government-owned lender to small enterprises, invested the entire sum out of its surplus money.The term deposit was for one-year maturity, and the term was over in the past few weeks.On August 28, ILFS Financial Services, a wholly owned subsidiary of ILFS, defaulted on repaying about a few hundred crores of rupees to its commercial-paper investors.
Two days later, the company settled the dues, which some market participants termed as a technical default.Two small-sized mutual funds including LIC and BOI AXA are said to have bought those CPs, said two market sources.
They could not be contacted immediately for comments.In compliance with the Reserve Bank Commercial Paper Directions, 2017, the company will not access CP market up to Feb 28 next year, the company told the BSE.The RBI asked ILFS Financial Services to cut debt exposure in all ILFS group entities by March next year, complying with the regulations on group debt exposure for non-banking financial companies.The board of ILFS called a meeting on Friday to take a call on fundraising, sale of assets, including road projects, and default by its subsidiary ILFS Financial Services (IFIN) on commercial paper.The group has been trying to trim Rs 80,000-crore consolidated debt (until a year ago) by selling assets, refinancing existing loans at the holding company and operating companies, and trying to merge the group with rivals.On July 24, ET reported that LIC of India may invest more money into the group.
Hemant Bhargava, LIC managing director and its nominee on ILFS board, has stepped in as ILFS new non-executive chairman.