Infrastructure Leasing & Financial Services
Introduction
Infrastructure Leasing & Financial Services Limited (IL&FS) is an Indian state-
funded infrastructure development and finance company. It was created by
public sector banks and insurance companies.
It operates through more than 250 subsidiaries including IL&FS Investment
managers, IL&FS financial services and IL&FS Transportation networks India
Limited (ITNL).Its projects include some of the largest infrastructure projects
in India including India's longest tunnel, Dr. Syama Prasad Mookerjee Tunnel,
which opened for traffic in April [Link] the company defaulted on its loans in
2018, the Government of India took control of the company and appointed a
new board.
Overview of IL&FS' business model
Infrastructure Leasing & Financial Services (IL&FS) is a non-banking financial company
(NBFC) that specializes in infrastructure financing and development. Its business model
revolves around identifying, financing, and developing infrastructure projects in India.
IL&FS provides financial services such as debt and equity financing, project advisory,
investment banking, and asset management for infrastructure projects in various
sectors such as transportation, energy, urban infrastructure, and financial services.
IL&FS has a presence in over 80 countries, providing its services through a network of
international offices and strategic partnerships.
Overall, IL&FS' business model is centered on financing and developing infrastructure
projects that support economic growth and improve the quality of life for people in
India.
History of IL&FS
IL&FS was formed in 1987 as an "RBI registered Core Investment Company"
by three financial institutions, namely the Central Bank of India, Housing
Development Finance Corporation (HDFC) and Unit Trust of India (UTI), to
provide finance and loans for major infrastructure [Link], as the
organisation needed better financing, it additionally opened itself to two large
international players,namely Mitsubishi(through Orix corporation Japan) and
the Abu Dhabi Investment authority. Subsequently, Life Insurance Corporation
India, Orix and ADIA became its largest shareholders, a pattern that continues
to this day.
Currently, its institutional shareholders include Life Insurance Corporation of
India(LIC), ORIX and Abu Dhabi Investment Authority, with small shareholdings
by a few Indian banks. State Bank of India (SBI) was a share holder till 2017,
after which it sold its stake in the company.
Importance of IL&FS in India's
infrastructure development
Financing: IL&FS has provided financing for various infrastructure projects in India,
including roads, railways, airports, and power plants. Its financing has helped to
bridge the infrastructure funding gap in India, which is critical for the country's
economic development.
Development: IL&FS has been involved in developing infrastructure projects, from
conceptualization to commissioning, in various sectors such as transportation,
energy, and urban infrastructure. Its development capabilities have helped to
improve the quality and reliability of infrastructure services in India.
Employment: IL&FS' infrastructure projects have created job opportunities across
various sectors, from construction workers to engineers and project managers. This
has contributed to employment generation and economic growth in India.
IL&FS' business segments
Transportation
Energy
Urban Infrastructure
Financial Services
IL&FS' role in infrastructure
development
Financing and developing infrastructure projects in India.
Contribution to the growth of India's economy.
Impact on employment and livelihoods.
IL&FS' debt crisis
Factors that led to the crisis
IL&FS' mounting debt and liquidity problems
Government intervention and resolution plan
Consequences of the debt crisis
Impact on India's financial sector
Losses suffered by investors and creditors
Repercussions on IL&FS' reputation and credibility
Conclusion
In conclusion, Infrastructure Leasing & Financial Services (IL&FS) has been an
important player in India's infrastructure development and financing
landscape. Its business model, which revolves around identifying, financing,
and developing infrastructure projects, has helped bridge the infrastructure
funding gap in India and improve the quality and reliability of infrastructure
services in the country.
Potential for IL&FS to regain its position as a leading infrastructure
development and finance company
Role of IL&FS in India's future infrastructure development plans.
