The crisis-hit Infrastructure Leasing and Finance Ltd (IL&FS) group has initiated an interim distribution of Rs5,000 crore, comprising Rs3,500 crore in infrastructure investment trust (InvIT) units and Rs1,500 crore in cash, as part of its ongoing resolution strategy.
The payout is primarily being executed by three key holding companies—IL&FS Ltd, IL&FS Financial Services Ltd (IFIN), and IL&FS Transportation Networks Ltd (ITNL). These entities collectively account for the majority of the group’s debt and have a large number of creditors, including public funds.
Commenting on the development, IL&FS group chairman and managing director (CMD) Nand Kishore says, “This payout marks an important milestone for the group, it resolves six major road assets through the InvIT route. We are particularly pleased that this interim distribution will facilitate payouts to creditors, including several public funds, thereby enabling timely fund release without waiting for the final resolution of IL&FS Group entities. The public interest board remains committed to achieving the total debt resolution target of Rs61,000 crore.”
The InvIT units, issued by Roadstar Infra Investment Trust, are backed by six road assets, including Moradabad Bareilly Expressway Ltd (MBEL), Sikar Bikaner Highway Ltd (SBHL), Pune Sholapur Road Development Company Ltd (PSRDCL), Barwa Adda Expressway Ltd (BAEL), Thiruvananthapuram Road Development Company Ltd (TRDCL) and Hazaribagh Ranchi Expressway Ltd (HREL). The total enterprise valuation of these assets stands at Rs8,576 crore. These units are being allocated through a private placement, followed by a listing in compliance with Securities and Exchange Board of India (SEBI) regulations. This approach is expected to improve recoveries for creditors of the six special purpose vehicles (SPVs) associated with these road assets, IL&FS says in a release.
Following this distribution, the total discharged debt across IL&FS group companies will reach around Rs43,000 crore, accounting for over 70% of the targeted resolution amount of Rs61,000 crore. This also includes previous interim distributions, which now total more than Rs17,000 crore, of which Rs3,500 crore is in InvIT units.
The Rs1,500 crore cash payout is an addition to the Rs12,000 crore already distributed to eligible creditors across 12 IL&FS group entities in multiple phases over the past two years.
The record date for the allocation of InvIT units and cash distribution has been set as 17 February 2025. The IL&FS board opted for the InvIT model in 2019 after individual road asset monetisation efforts yielded lower-than-expected responses. The InvIT structure offered improved valuations for creditors and was subsequently approved by the relevant authorities.
As part of the InvIT structure, Roadstar Infra Investment Trust was established, with Roadstar Investment Managers Ltd serving as the investment manager and Elsamex Maintenance Services Ltd as the project manager. The six road assets were transferred to the InvIT, with IL&FS, IFIN, ITNL, and Sabarmati Capital One Ltd (SCOL) receiving units proportional to their debt exposure. These companies are now distributing the InvIT units and accumulated cash to creditors under the IL&FS resolution framework.
Several major banks and financial institutions stand to benefit from this distribution, including: Bank of Baroda, Canara Bank, State Bank of India (SBI), ICICI Bank, DBS, LIC Mutual Fund, and IndusInd Bank. Additionally, a wide range of public funds, such as Post Office Life Insurance Fund, NPS Trust, LIC P&G Fund, and pension and provident funds of organisations like Infosys, NTPC, and the Army Group Insurance Fund, will receive units or cash under this scheme.
The interim distribution framework was approved by the national company law appellate tribunal (NCLAT) in May 2022, following recommendations from the IL&FS board. The framework was designed to facilitate the timely release of funds and reduce outstanding debt obligations, particularly for public funds, while the final resolution of IL&FS group entities remains in progress.
With this latest payout, the IL&FS group says it continues to make significant strides in resolving its debt crisis and providing relief to its creditors.
