A REPORT SUBMITTED ON

“Infrastructure Leasing & Financial Services”

Submitted To:
Professor: Tulika Sharma

Submitted By: Group 1

Shashank Agarwal - 19A2HP435
Apurva Gupta - 19A3HP613
Siddharth Singh - 19A1HP072
Parth Gupta- 19A3HP641
P.R Sai Sanath - 19A1HP106
Gyanesh Singh -18A3HP619
 Contents
Page No
Acknowledgement 2
Executive Summary 3
1.0 Vision of the company 4
2.0 Background of the company 5
2.0.1 Sectors in which IL&FS is present 5
3.0 How IL&FS works 5
3.0.1 Major projects of IL&FS since 1987 6
4.0 NBFC 7
4.0.1 What is the Non-Banking Financial Company? 7
4.0.2 What are different types/categories of NBFC registered with RBI? 7
4.0.3 What are the powers of reserve bank regards to NBFC? 8
5.0 Structuring Of IL&FS 8
5.0.1 IL&FS Subsidiaries 9
5.0.2 Rating Of IL&FS after Crash 11
6.0 The magenirial and economic decision that led to downfall of IL&FS 11
7.0 Repercussion on market 13
7.0.1 IL&FS crisis impact 13
REFERENCES 14

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 Acknowledgement

We would like to express our sincere gratitude to Professor Tulika Sharma, for
providing her invaluable guidance, instructions, and suggestion throughout the
course of the report. She was very specific and prompt in stating the instruction
about the report.

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 Executive summary

This report is based on a Non-Banking Financial Company (NBFC) known as

Infrastructure Leasing & Financial Services (IL&FS). This Company was a Non-
Banking Financial Corporation which used to fund various industrial as well as
agricultural projects all around the world as the tag line of the company suggest
“Pioneering partnership“. The company used to partner with private firms and fund
their projects. Many big institution like LIC and HDFC has major share in this
company. As our tittle suggest “fall of “IL&FS” and its repercussion on Market” this
company saw a downfall in 2018 because of various managerial and structural
problem that existed in the company, these problems are further discussed in the
report. Being a megacorp it’s down fall had effect all around the country. It has all
kind of effects ranging from political to economical but in this report we have
discussed only the economical repercussions that downfall of company had. Loop
Holes showed by the company’s downfall are helping the government and
associated agencies to make new laws for the country. In this report we have also
discussed about the structuring of the company before the downfall and after the
downfall with the effect it had on its rating.

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IL&FS “Pioneering Partnership”
1.0 Vision of company –

An Instrument of State

Widely acknowledged as the pioneer of Public Private Partnership in India, IL&FS has turned infrastructure
building into a sustainable and commercially viable proposition. We have consistently demonstrated the
potential of the private sector as an instrument of State for the development, implementation, and
management of large-scale infrastructure projects. Since its inception, IL&FS has been aligned with India’s
National Missions — from skilling for employment, to clean energy and waste management. Through
strategic partnerships in 22 states, IL&FS has worked with the government not just on projects but at the
policy level.

An Array of Stakeholders

Successful infrastructure projects require the close involvement of an array of stakeholders. Our
infrastructure projects are developed in conjunction with a range of partners - governments, financing
agencies, private sector partners and communities. This unique Public Private Partnership helps to
leverage limited public funds, reduce life cycle cost, develop and execute more projects on a sustainable
basis. We have harnessed the power of such partnerships to foster local, community-level solutions while
integrating technical and financial expertise from professionals.

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2.0 Background of the company
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 projects.
IL&FS is one of India's pioneering infrastructure development and finance companies. Set up initially by
Indian Financial Institutions with other pedigreed investors, IL&FS has the twin business mandates of
commercializing infrastructure projects and setting up value added financial services. IL&FS, since 1987,
has played a catalytic role in setting up and developing the policy framework for privatizing of
Infrastructure Projects in India

The shareholders of IL&FS include Life Insurance Corporation of India, Central Bank of India, State Bank
of India, Housing and Development Finance Corporation Limited, Orix Corporation of Japan and Abu
Dhabi Investment Authority

IL&FS is a type of NBFC as it funds various projects around the country. NBFC is a shadow bank that fund
various sectors of business and most of the stake in IL&FS is of NBFC type companies so any so any type
Of downfall in IL&fs will result in fall of NBFC market. NBFC’s in detail is discussed further in the report.

2.0.1 Sectors in which IL&FS is present

1. Transport
2. Maritime
3. Energy
4. Water & Wastewater
5. Urban Asset management
6. Financial Services
7. Environment
8. Education and Technology
9. Skill development

3.0 How IL&fs Work

In collaboration with the government, we identify need-driven projects that can be commercially viable,
such as roads, bridges, power, ports, water supply and area development. We then use innovative
structural and financial techniques to enhance project viability and impact. Numerous IL&FS projects
which have been pioneering in their sectors are testament to the success of this approach. With a rigorous
project development process that raises non-budgetary resources to make projects viable, IL&FS has
broken traditional moulds in the infrastructure sector. We are also able to leverage a wide variety of in-
house skills and experience through our subsidiary company to deliver cross sector mandates.

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3.0.1 Major Projects by IL&fs since 1987
Delhi-Noida toll Bridge
This toll bridge connects Delhi with Noida across the Yamuna River. It was developed and constructed
on a build-own-operator-transfer (BOOT) format by the Noida Toll Bridge Company Limited incorporated
as a special purpose vehicle, with equity participation from NOIDA (New Okhla Industrial Development
Authority). Promoted by IL&FS, it is also India’s first project to have Toll Collection.

Ranchi - Patratu Dam Road

Conceived to provide better connectivity between towns of Jharkhand, this 4/2 lane road connects the
cities of Ranchi and Patratu. It has five major bridges, and covers 35 Kms. It has improved inter-city
accessibility boosting local businesses. The Road passes through hilly terrain and has some aesthetically
designed curves.

Chenani - Nashri Tunnel

Known also as the Patnitop Tunnel, it creates reliable all-weather connectivity between Chennai and
Nashri. It cuts down 31 Kms of the Jammu-Srinagar distance and is the fastest project to be completed in
India’s Himalayan region. At 9.28, this is the longest road tunnel in India, and Asia’s longest bi- directional
tunnel.

Baleshwar Kharagpur Expressway

It is a four lane project situated on National Highway 60. The National Highway Authority of India
mandated ITNL to develop existing 119Km of the National Highway 60 from Baleshwar to Kharagpur.
The length of the expressway is 119.30Km. It has 4 major bridges and 48 minor bridges with two toll
plazas.

4.0 NBFC
4.0.1 What is Non-Banking Financial Company (NBFCs)?

Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956
engaged in the business of loans and advances, acquisition of
shares/stocks/bonds/debentures/securities issued by Government or local authority or other
marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but does
not include any institution whose principal business is that of agriculture activity, industrial activity,
purchase or sale of any goods (other than securities) or providing any services and
sale/purchase/construction of immovable property.
A non-banking institution which is a company and has principal business of receiving deposits under any
scheme or arrangement in one lump sum or in installments by way of contributions or in any other
manner, is also a non-banking financial company (Residuary non-banking company).

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4.0.2 What are the different types/categories of NBFCs registered with RBI?

NBFCs are categorized a) in terms of the type of liabilities into Deposit and Non-Deposit accepting
NBFCs, b) non deposit taking NBFCs by their size into systemically important and other non-deposit
holding companies (NBFC-NDSI and NBFC-ND) and c) by the kind of activity they conduct. Within this
broad categorization the different types of NBFCs are as follows:

I. Asset Finance Company (AFC) : An AFC is a company which is a financial institution carrying on as its
principal business the financing of physical assets supporting productive/economic activity, such as
automobiles, tractors, lathe machines, generator sets, earth moving and material handling equipment,
moving on own power and general purpose industrial machines. Principal business for this purpose is
defined as aggregate of financing real/physical assets supporting economic activity and income arising
therefrom is not less than 60% of its total assets and total income respectively.

II. Investment Company (IC): IC means any company which a financial institution is carrying on as its
principal business the acquisition of securities,

III. Loan Company (LC): LC means any company which a financial institution is carrying on as its principal
business the providing of finance whether by making loans or advances or otherwise for any activity other
than its own but does not include an Asset Finance Company.

IV. Infrastructure Finance Company (IFC): IFC is a non-banking finance company a) which deploys at least
75 per cent of its total assets in infrastructure loans, b) has a minimum Net Owned Funds of ₹ 300 Crore,
c) has a minimum credit rating of ‘A ‘or equivalent d) and a CRAR of 15%.

V. Systemically Important Core Investment Company (CIC-ND-SI): CIC-ND-SI is an NBFC carrying on the
business of acquisition of shares and securities which satisfies the following conditions: -

1. It holds not less than 90% of its Total Assets in the form of investment in equity shares, preference
shares, debt or loans in group companies;
2. its investments in the equity shares (including instruments compulsorily convertible into equity
shares within a period not exceeding 10 years from the date of issue) in group companies
constitutes not less than 60% of its Total Assets;
3. It does not trade in its investments in shares, debt or loans in group companies except through
block sale for the purpose of dilution or disinvestment. it does not carry on any other financial
activity referred to in Section 45I(c) and 45I(f) of the RBI act, 1934 except investment in bank
deposits, money market instruments, government securities, loans to and investments in debt
issuances of group companies or guarantees issued on behalf of group companies.

VI. Infrastructure Debt Fund: Non- Banking Financial Company (IDF-NBFC): IDF-NBFC is a company
registered as NBFC to facilitate the flow of long-term debt into infrastructure projects. IDF-NBFC raise
resources through issue of Rupee or Dollar denominated bonds of minimum 5-year maturity. Only
Infrastructure Finance Companies (IFC) can sponsor IDF-NBFCs.

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VII. Non-Banking Financial Company - Micro Finance Institution (NBFC-MFI): NBFC-MFI is a non-deposit
taking NBFC having not less than 85% of its assets in the nature of qualifying assets which satisfy the
following criteria:

loan disbursed by an NBFC-MFI to a borrower with a rural household annual income not exceeding ₹
1,00,000 or urban and semi-urban household income not exceeding ₹ 1,60,000;

1. loan amount does not exceed ₹ 50,000 in the first cycle and ₹ 1, 00,000 in subsequent cycles;
2. total indebtedness of the borrower does not exceed ₹ 1, 00,000;
3. tenure of the loan not to be less than 24 months for loan amount in excess of ₹ 15,000 with
prepayment without penalty;
4. loan to be extended without collateral;
5. aggregate amount of loans, given for income generation, is not less than 50 per cent of the total
loans given by the MFIs;
6. loan is repayable on weekly, fortnightly or monthly instalments at the choice of the borrower

VIII. Non-Banking Financial Company – Factors (NBFC-Factors): NBFC-Factor is a non-deposit taking NBFC
engaged in the principal business of factoring. The financial assets in the factoring business should
constitute at least 50 percent of its total assets and its income derived from factoring business should not
be less than 50 percent of its gross income.

IX. Mortgage Guarantee Companies (MGC) - MGC are financial institutions for which at least 90% of the
business turnover is mortgage guarantee business or at least 90% of the gross income is from mortgage
guarantee business and net owned fund is ₹ 100 crore.

X. NBFC- Non-Operative Financial Holding Company (NOFHC) is financial institution through which
promoter / promoter groups will be permitted to set up a new bank .It’s a wholly-owned Non-Operative
Financial Holding Company (NOFHC) which will hold the bank as well as all other financial services
companies regulated by RBI or other financial sector regulators, to the extent permissible under the
applicable regulatory prescriptions.

4.0.3 11. What are the powers of the Reserve Bank regarding 'Non-Bank Financial Companies’, that is,
companies that meet the 50-50 Principal Business Criteria?

The Reserve Bank has been given the powers under the RBI Act 1934 to register, lay down policy, issue
directions, inspect, regulate, supervise and exercise surveillance over NBFCs that meet the 50-50 criteria
of principal business. The Reserve Bank can penalize NBFCs for violating the provisions of the RBI Act or
the directions or orders issued by RBI under RBI Act. The penal action can also result in RBI cancelling the
Certificate of Registration issued to the NBFC or prohibiting them from accepting deposits and alienating
their assets or filing a winding up petition.

4.0.4 NBFCs are doing functions like banks. What is difference between banks & NBFCs?

NBFCs lend and make investments and hence their activities are akin to that of banks; however, there are
a few differences as given below:

1. NBFC cannot accept demand deposits.

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 2. NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn
on itself.

3. Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available
to depositors of NBFCs, unlike in case of banks.

5.0 Structuring of IL&FS

Infrastructure Leasing & Financial Services Limited is an Indian infrastructure development and finance
company. It operates through more than 250 subsidiaries including IL&FS Investment managers, IL&FS
financial services and IL&FS Transportation networks India Limited being three major subsidiaries.

IL&FS investment manager: IL&FS Investment Managers Limited (IIML), a subsidiary of Infrastructure
Leasing & Financial Services Limited (IL&FS), is one of the oldest and largest private equity fund
managers in India and has raised and managed over $3.5 billion.
IIML has been an early and in many instances, the first investor across various sectors such as Telecom,
City Gas Distribution, Shipyards, Retail, and Media. Funds managed by IIML now span General Purpose
Private Equity, Real Estate and Infrastructure.
Investors to IIML managed Funds include most of the major Indian Banks & Institutions, and marquee
Global Institutional Investors including major U.S. Pension Funds, Endowments, Foundations and SWF's.
IIML is listed on the National Stock Exchange and The Bombay Stock Exchange.

IL&FS financial services: IL&FS Financial Service Limited (IFIN) is one of India's leading Non- Banking
Finance Company providing a wide range of financial and advisory solutions under one umbrella. IFIN is
a 100% subsidiary of Infrastructure Leasing and Financial Services Limited (IL&FS).
IFIN specializes in infrastructure financing transactions, with a combination of Investment Banking skill
sets comprising of Debt Syndication, Corporate advisory and lending capabilities.
IFIN has also established its international presence through its wholly owned subsidiaries IL&FS Global
Financial Services Pvt Ltd. at Singapore, IL&FS Global Financial Services (UK) Ltd at London and IL&FS
Global Financial Services (ME) Limited at Dubai and IL&FS Global Financial Services HK Ltd - Hong Kong.

IL&FS Transportation networks India Limited: INTL is an integrated platform with the technical,
managerial, financial, and governance framework to support and participate in the highway
development programme of the Government of India.
After successfully demonstrating the viability of the PPP approach to develop, finance, and implement
road projects, IL&FS incorporated ITNL in 2000. ITNL acts as developer, sponsor, construction manager,
and operator of surface transportation infrastructure, taking Greenfield projects from conceptualization,
through commissioning, to operations and maintenance. It also identifies investment opportunities in
existing road infrastructure.
ITNL leads the market in the Indian transport infrastructure sector with more than 14,000 lane-
kilometers in a portfolio of over 30 projects.

5.0.1 Infrastructure Leasing & Financial Services Subsidiaries

1. IL&FS Transportation Networks Limited

2. IL&FS Financial Services Ltd

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 3. IL&FS Technologies Limited

4. IL&FS Wind Energy Limited

5. IL&FS Energy Development Company Limited

6. IL&FS Townships & Urban Assets Limited

7. IL&FS Water Limited

8. IL&FS Maritime Infrastructure Company Limited

9. IL&FS Infrastructure Development Corporation Ltd.

10. Pune Sholapur Road Development Company Limited

11. Porto Novo Maritime Limited

12. IL&FS Property Management & Services Limited

13. IL&FS Solar Power Limited

14. IL&FS Ecosmart Limited

15. Bhopal E-Governance Limited

16. IL&FS Cluster Development Initiative Limited

17. Mahidad Wind Energy Private Limited

18. Unique Waste Processing Company Limited

19. IL&FS Education & Technology Services Limited

20. Chhattisgarh Highway Development Company Limited

21. Jogihali Wind Energy Private Limited

ILFS is a share listed company. Market capitalization is different for different subsidiaries some are
shown in table below

Subsidiaries of IL&FS Market cap (Rs. Crore) Average share price (Rs.)
IL&FS engineering & 48.25 3.70
construction co company
IL&FS financial services 97.66 3.11
IL&FS 71.71 2.18
Table 1.0

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5.0.2 Ratings of IL&FS after crash:

IRCA RATING: IL&FS Group shares crash up to 16% as ICRA assigns junk rating to parent. ICRA has cut the
rating on Rs 5,225-crore in non-convertible debentures and Rs 350 Crore in loans of IL&FS sharply to BB
from AA+.

CRISIL RATING: Way back in 2011, CRISIL had assigned 'CRISIL A/Stable/CRISIL A1' rating to the bank loan
facilities of IL&FS Transportation Network Ltd (ITNL). As per the rating definitions standardized by SEBI,
the ‘A’ category refers to ‘Adequate Safety’. The rating was withdrawn in July 2016 and since then, CRISIL
has had no outstanding rating on ITNL either.

5.0.3 POWER HOLDERS IN IL&FS BEFORE its fall:

1. Ravi Parthasarthy (Chairman Upto July 20, 2018)

2. Hari Sankaran (Vice Chairman and managing director)

3. Arun Saha (joint managing director and ceo)

4. Hemant Bhargava (From April 26, 2017) Appointed as Chairman July 21, 2018

After the fall of IL&FS government intervened and changed the authorities who were in the top
management of various IL&FS firms.

1. Mr. Uday Kotak (CHAIRMAN, IL&FS)

2. Mr. Vineet Nayyar (VICE CHAIRMAN, IL&FS)

3. Mr. GC Chaturvedi (DIRECTOR)

4. Mr. Srinivasan Natarajan (DIRECTOR)

5. Mr. Bijay Kumar (DIRECTOR)

6. Mr. Nand Kishore (DIRECTOR)

6.0 The managerial and banking decisions that led to the Downfall of
IL&FS –
In July to September 2018, it was reported that two out of the 256 subsidiaries of IL&FS had trouble paying
back the loans and incorporate deposits to the other banks and lenders that resulted in the RBI requesting
its major shareholders to rescue it. It was reported that one of its subsidiaries was unable to repay Rs.
1000 crore short term loan and another defaulted-on repaying Rs. 450 crore worth of intercorporate
deposits to Small Industries Development Bank of India (SIDBI). And the dept pile reached to more than
Rs. 91,000 crores. Therefore, on 1st October 2018, the Government had to intervene and take control over

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the company. A new Board was formed as the earlier board was deemed to have failed to discharge its
duties. The SFIO-Serious Fraud Investigation Office started investigating the case and on 2 April 2019, Hari
Sankaran, the former vice chairman of IL&FS was arrested in Mumbai for Fraud and causing loss to the
troubled infrastructure lender.

The reasons that led to the downfall of the IL&FS initiated from its major problems with the government
from 2012, due to creation of a new legislation that changed the way land acquisitions works. This act
made it mandatory to compensate the landowners at very high rates. Due to involvement of the IL&FS
group, especially its subsidiaries IL&FS Engineering and Construction Company and IL&FS Transport
Networks into several major projects, it had to continue building them. And it had to compensate all
landowners based on the new laws. This resulted in a significant escalation of the cost in lot of the project.
The cost escalations were further exacerbated by the extremely high leverage that was part of the capital
structure of IL&FS. Regulatory cost overruns and high leverage proved to be the cocktail that led to the
downfall of IL&FS.

Also, it was a known fact that the higher executives of IL&FS knew about the problems but reacted late to
it. And the share market did not have any clue about these problems as maximum of its subsidiaries were
not listed. And even due to large number of the subsidiaries the senior management was negligent and
did not meet often to review the financial statements of the firm in entirety. It is only when the company
started running out of cash and defaulting on its debts that the media started to pay attention to the
irregularities. But, by then it was already too late, and IL&FS was trapped in a spiral that pulled it so down
that it became difficult for it to get out.

IL&FS PROFIT AND REVENUE

500 244 249 20000
142 18799
45 18000
17157
0 16000
15098
14000

in RS crores
in Rs crores

-500 11561 11641 12000

10000
-1000 8000
6000
-1500 4000
2000
-2000 0
1 2 3 4 -1887
5
Profits(rs cr) 244 249 45 142 -1887
REVENUE(rs cr) 11561 11641 15098 17157 18799
Axis Title

Profits(rs cr) REVENUE(rs cr)

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7.0 Repercussions on Market
IL&FS has shareholders including SBI, LIC, ORIX Corporation of Japan and Abu Dhabi Investment Authority
(AIDA).LIC and OIX Corporation as the largest shareholders in IL&FS with their stake holding at 25.34 and
23.54% respectively. IL&FS defaulted in payment obligations of bank loans which included interest, long
term and short term deposits and failed to payback as on september14 2018.The Company reported that
it has received notices for delay and default on September 15 2018 and as consequence of these defaults
ICRA rating agency downgraded its short term and long term borrowing programs. These defaults have
put many investors, banks and mutual fund agencies jeopardy and it created a lot of panic among equity
investors.

IL&FS is a private firm but 40% of its shares are held by government -owned firms which means the
government needs to ensure the solvency of IL&FS to maintain financial stability in the country. IL&FS has
assets worth more than$15.77 billion but its debt are the result of mismanaged borrowings in the past.
IL&FS have a total debt of $12 billion. The Government took the measure to replace IL&FS board with six
selected nominees and said it would ensure no more defaults takes place and the infrastructure projects
are implemented smoothly. The government blames the board and management the main problems are
those relating to IL&FS which are quite real, and we expect some resolution given that the government,
RBI and SEBI are very serious about it. As of now, IL&FS has already defaulted on some payments. There
has been a ripple effect, as was seen last Friday with DHFL when DSP sold some paper at a high yield and
then the rumors mills started, and the sentiment was impacted. It will be relatively difficult for NBFCs to
raise money at the right kind of pricing in the immediate future. That will trouble the market further. Once
we solve the IL&FS problem, sanity should return to the market and sentiments will improve. But as of
now, these are tough times.

7.0.1 IL&FS crisis impact:

1. Following the IL&FS crisis, corporate borrowers are back to banks for loans and avoid bond markets,
according to the data released by Reserve Bank Of India (RBI) which shows non-food credit growth
at over a four - year high with 14.5% year-on-year to be specific which is non-food credit grew from
78.15 trillion RS in fortnight ended 12 October 2017 to 89.47 trillion RS in the 12 October 2018
fortnight. Double digit growth in this segment has been observed since December2017 by banks and
it has been recovering since April 2017 when it touched all tie low of 2%.

2. Due to the following crisis the gap between lending rates by the banks and the borrowing rates from
the bond market has been nullified and in some cases bank loans are turning out to be cheaper when
compared with bonds.

PK Gupta, managing director, State Bank of India has said that rate transmission in the bond market is
faster than the bank lending rate.SBI’S one-year marginal cost of funds-based lending rate as on October
2018 is at 8.5% and an AA-rated corporate borrower can get loans from SBI at a rate between 8.6-8.9%.
Rajat Monga, senior group president, Yes Bank, has said that bank loan growth is increasing as issuers are
not actively looking at the bond market and this creates huge market for Yes Bank. The Data from
securities and Exchange Board of India (SEBI) shows that the outstanding corporate bonds were at28.38
trillion RS as of September 2018. The first signs of the liquidity crisis took place when IL&FS defaulted its
payment obligations and due to this it followed downgrades by credit agencies. Banks has grabbed the

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opportunity presented by the falling risk appetite of the bond market after the IL&FS crisis. It is observed
that investors are going slow on investing in financial companies and this has led to higher spreads for
other bond issuers at this present moment.RBI is encouraging bank lending to non-banking financial
companies (NBFCs) by easing liquidity terms and re increasing the ceiling for lending to single NBFC.

Moody’s a global rating agency said that extended liquidity crisis will hit economy very badly, following
defaults by IL&FS and its group entities, will erode the credit profile of Non-banking financial companies
(NBFMs).Regulators are taking enough measures to limit the scope and duration of the liquidity crisis and
it is expected that most of the finance companies an deal with multi-week tight liquidity conditions
however this will affect the NBFI’s credit standing and prove negative for the broader economy and
structured finance sector. Liquidity tightness could lead to a higher financing costs for NBFIs, they may
face difficulty in rolling over their liabilities because of their heavy reliability on market borrowing to fund
asset growth. This highlights the structural vulnerabilities in the liquidity management, these incidents
show that the companies have very little liquidity back up and their liquidity management mainly involves
matching their short-term liabilities with assets. Any effects on the NBFIs will spill over to the broader
economy mainly through the credit channel because NBFIs are credit providers for the economy, all these
incidents show that companies are capable of coping with multi-week liquidity distress but when
prolonged period of liquidity will weaken the NBFI’s credit standings.

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References
https://www.rbi.org.in/Scripts/FAQView.aspx?Id=92

https://www.managementstudyguide.com/sudden-downfall-of-il-and-fs.htm

https://www.ndtv.com/business/il-fs-downfall-largely-due-to-wrong-decisions-before-2014-
government-1925185

https://www.business-standard.com/article/economy-policy/il-fs-impact-prolonged-liquidity-crisis-will-
hit-economy-says-moody-s-118101600015_1.html

https://www.business-standard.com/article/economy-policy/il-fs-impact-prolonged-liquidity-crisis-will-
hit-economy-says-moody-s-118101600015_1.html

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