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Tuesday,30-November-2021

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IFIN recovers Rs 1,379 cr loan; gross NPA at 97%

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Crisis-hit IL&FS Financial Services (IFIN) has recovered around Rs 1,379.9 crore, including loans provided and investments made in third party borrowers and to IL&FS Group companies as of November 30.

Post the recovery, IFIN has a cash balance of Rs 1,450 crore which inlcudes and its gross non-performing asset (NPA) by the end of November standing at 97 per cent, according to a recent affidavit filed by the Ministry Corporate Affairs (MCA) at the the National Company Law Appellate Tribunal (NCLAT).

The MCA has submitted the fresh affidavit in the company law tribunal representing the new IL&FS Board which took over the group in 2018.

Out of the total recovery, around Rs 1,309.9 crore came from around 30 third party borrowers, it said.

“IFIN has been able to recover monies aggregating to Rs 13.1 billion from third party borrowers comprising recovery of Rs 10.5 billion under the credit exposure (including interest) and Rs 2.6 billion under the investment exposure,” the affidavit said.

“The cash balance as on November 30, 2019 stood at Rs 14.5 billion (including other income and net of operating expenses) vis a vis opening balance of Rs 2.37 billion.”

Further, it also mentioned that IFIN has entered into resolution with five third party borrowers wherein the entire principal outstanding of Rs 6,100 crore would be repaid along with the applicable interest. Of the Rs 6,100 crore an amount of Rs 1,300 crore towards principal along with applicable interest has been recovered as on November 30, 2019 and an amount ot Rs 4,800 crore along with applicable interest is expected to be recovered in future, it said.

The principal amount owed by third party borrowers to IFIN as of October 1, 2018 stood at Rs 8,356 crore.

As of November-end, IFIN initiated a total of 117 recovery actions against third party borrowers including 49 complaints and petitions against 14 parties under Section 138 of the Negotiable Instruments Act, 1881 and 27 recovery suits against 15 borrowers, among others.

In the revised affidavit, the Corporate Affairs Ministry has also urged the NCLAT to approve the revised formula for sharing resolution proceeds from the disposal of bankrupt IL&FS group firms among its creditors in a fair and equitable manner.

The revised mechanism would provide for the distribution of residual proceeds over and above liquidation value of assets to other than secured creditors.

The IL&FS Group and its subsidiary companies, which have about Rs 91,000 crore in debt, is in the bankruptcy court following its defaults in 2018 that shook the entire financial sector of the country and triggered the NBFC liquidity crisis.

During the period July 2018 to September 2018, two of its subsidiaries reported having trouble in paying back loans and inter-corporate deposits to lenders. This was followed by multiple subsidiaries defaulting and the group heading to bankruptcy.

In its 32nd Annual General Meeting (AGM) on December 31, Uday Kotak, the Chairman of the restructured IL&FS Board had said that the ongoing resolution process of the debt-ridden group is a “test case” for group-wide resolution of stressed assets in the country adding that the board expects to recover 50 per cent of the overall outstanding debt in its books as on September 30, 2018.

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Business

Maha has maximum GST dues pending with Centre, Congress says ‘stepmom treatment’

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Maharashtra, which contributes the highest to the Centre’s GST kitty, has the maximum amount outstanding for the past two years of the Covid-19 pandemic, a RTI reply has revealed.

The revelations came in response to a RTI query filed by activist Binod Agarwal from the Ministry of Finance, Under Secretary (State Taxes-II) and CPIO Mahendra Nath.

State Congress General Secretary Sachin Sawant said that the RTI reply has confirmed what the Maha Vikas Aghadi government has been saying always – that the Bharatiya Janata Party-led Centre is adopting a “step-motherly treatment” towards Maharashtra.

According to the RTI response, of the total GST compensation of Rs 277,752 crore due to states from April 2020-March 2021, Maharashtra’s share was the highest at Rs 40,398 crore.

From this amount, Rs 21,697.65 crore was released from cess proceeds and another Rs 11,977 crore, leaving an outstanding balance of Rs 6,723 crore to the state.

Similarly, for the period April 2021-July 2021, of the total GST compensation of Rs 111,419 crore due to states, Maharashtra accounted for Rs 15,060 crore, the highest.

From this amount, Rs 13,782.36 crore was by way of back to back loan, and Rs 1,278 crore is still outstanding to the state.

In fact, from April 2019 till November 2021, Maharashtra’s dues were Rs 50,374.68 crore, of which it received Rs 11,111.15 crore and Rs 13,782.30 crore as back to back loan, leaving a shortfall of Rs 25,481.23 crore.

In the past couple of years, the MVA government has been continuously pleading with the Centre to release its GST dues and Chief Minister Uddhav Thackeray had shot off a letter to Union Finance Minister Nirmala Sitharaman on the same in December 2019, a month after assuming office.

Thackeray met the PM in June to raise the issue along with other pending matters and Deputy Chief Minister Ajit Pawar and Congress have also raised the matter with the Centre on several occasions.

The ruling Shiv Sena-Nationalist Congress Party-Congress leaders, including NCP President Sharad Pawar, have demanded on several occasions that the Centre should expedite the release of the state’s GST dues to help it tackle the Covid-19 pandemic and other issues effectively.

In September 2020, Thackeray had slammed the Centre for not giving its GST dues and forcing the state to take loans, and a month later demanded that if the GST system has failed “then the Centre should it” and revert back to the old system.

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Diesel, petrol prices unchanged since early November

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Oil marketing companies have continued to keep prices of diesel and petrol unchanged across major Indian cities post revision of duties by the Centre and state governments on the Diwali eve in early November.

Accordingly, diesel and petrol prices in Delhi remained static at Rs 86.67 per litre and Rs 103.97 per litre, respectively on Monday.

In the financial capital Mumbai, they were priced at Rs 94.14 and Rs 109.98, respectively.

Prices also remained static in Kolkata at Rs 89.79 and Rs 104.67, respectively.

In Chennai, petrol and diesel rates remained at Rs 91.43 and Rs 101.40, respectively.

Across the country as well, the price of the fuel largely remained unchanged on Sunday but the retail rates varied depending on the level of local taxes.

The excise duty cut by the Centre on November 3 was the first such exercise since the onset of Covid pandemic.

In fact, the government had revised excise duty on petrol and diesel sharply in March and again in May 2020 to mobilise additional resources for the Covid relief measures.

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Business

Equity indices fall marginally in early trade

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The 30-scrip Sensitive Index (Sensex) declined marginally on early trade session on Monday.

At 9.45 a.m. the S&P BSE Sensex traded at 57,044 points, down 0.13 per cent.

It opened at 57,028 points from the previous close of 57,107 points.

Till now it touched a low of 56,382 points.

Besides, the broader 50-scrip Nifty at the National Stock Exchange (NSE) opened at 17,338 points after closing at 17,026 on Friday.

It traded at 16,985 points, down 0.21 per cent during the early-morning trade session.

Adani Green, Adani Transmission, Adani Ports, Bandhan Bank and General Insurance were some of the top losers.

On the contrary, Reliance Industries, Indusind Bank and Dr. Reddy’s Labs were the top gainers in early trade.

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