IL&FS - Too Big to Fail? - Chart Of The Day 27 September 2018 - Equitymaster

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IL&FS - Too Big to Fail?
Sep 27, 2018

A look at the share holding pattern of IL&FS underlines the scale of the problem.

Two of India's biggest entities comprise of the top 5 shareholders in IL&FS. LIC has a 25.3% stake. HDFC Ltd owns 9%. Along with Central bank of India (7.7%) and State Bank of India (6.4%), these entities own almost half of IL&FS.

That explains the determination of LIC to stop the situation from worsening further.

The chairman of LIC has hinted at increasing LIC's exposure to IL&FS.

IL&FS' long-term and short-term debt were recently downgraded to 'D' i.e. 'default' or 'junk' after it failed to repay its obligations.

In such a scenario, finding a buyer for its debt instruments will be difficult.

A lot of these loans to IL&FS were given by banks who till recently were grappling with NPA issues.

Adding all these stakeholders signifies how much is at stake on the revival of IL&FS.

Data Source: IL&FS 2018 Annual report

This Chart Of The Day was published in The 5 Minute WrapUp - The Market Correction Might Be Just Starting Due to the IL&FS Domino

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