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Rising NPAs and Debt - Early Indicators of IL&FS' Liquidity Crisis
Oct 4, 2018


Now, no doubt, rating agency ICRA kept upholding IL&FS' AAA rating until August 2018. But the rating documents over the years, that lay down financial numbers, clearly showed a risky trend.

Even as IL&FS Financial Services' debt to equity ratio shot up over the past six years, the ratio of NPA to networth kept ballooning. And as I have written earlier for PSU banks, the NPA to networth ratio is something I stay extremely wary of.

For IL&FS Financial Services, the NPA to networth ratio rang alarm bells by 2016 itself.

Data Source: IFIN Rating Documents

This Chart Of The Day was published in The 5 Minute WrapUp - How I Discovered IL&FS Wasn't a AAA Company

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