IL&FS gives presentation on Rights Issue of Rs 4,500 crore to investors: Sources

The debt-ridden firm, Infrastructure Leasing & Financial Services (IL&FS), a non-banking finance company (NBFC), is looking forward to come up with the rights issue of Rs 4,500 crore. For the purpose, the company has also given a presentation on the rights issue to its shareholders.

According to our exclusive sources, the presentation was given to investors on August 14 and 15, 2018. However, HDFC, SBI and Central Bank, who is the major investor in the firm, have not been able to make its mind on investing in it. The local lender SBI owns 6.42 per cent stake in the company while Central Bank and HDFC own 7.67 per cent and 9.02 per cent stakes, respectively.

"We don't have any opinion on IL&FS but will decide as an when the proposal comes", says Rajnish Kumar, Chairman, State Bank of India

One of the shareholders, who is also one of the founding members of the IL&FS group, has informed that shareholders won't subscribe to the rights at a rate above Rs 500 per share.  

Rates at which shares have been issued till date:

- 2014: LIC bought a part of the company at the rate of Rs 1,100 per share; however, it suffered huge losses at this rate.

- 2015: Orix Corporation took a part of the company at the rate of Rs 763 per share.

Besides, the Reserve Bank of India (RBI) has asked IL&FS Financial Services to reduce debt exposure in all IL&FS group entities by March 2019. It should be done in conformity with the regulations on group debt exposure for non-banking financial companies (NBFCs). Currently, IL&FS is facing liquidity issues, which made the central bank to issue the directive.

Earlier, questions were also raised on Life Insurance Corporation of India's (LIC's) interest in investing in the debt-ridden company although it is a public sector.

Mails sent to HDFC, IL&FS and LIC didn’t elicit any response.