IL&FS resolution process nears completion; Rs 45,281 cr debt discharged as of March’25

The resolution process for Infrastructure Leasing & Financial Services Limited (IL&FS) and its group entities has made significant progress, with Rs 45,281 crores discharged to creditors as of March 21, 2025, according to the latest status update report submitted to the National Company Law Appellate Tribunal (NCLAT). This amounts to approximately 61.39% of the total external debt outstanding of Rs 99,355 crores.

Key highlights of the resolution process

1. Debt Discharge Breakdown:
   • Monetization/Termination/InvIT Transfers: Rs 21,581 crores.
   • Auto Debits and Green Entity Servicing: Rs 9,026 crores.
   • Interim Distribution (Cash & InvIT Units): Rs 14,674 crores to external creditors.
2. Progress in Entity Resolution:
   • 197 out of 302 entities (65%) fully resolved.
   • 80 entities remain unresolved, with 68 yet to be filed with NCLT for closure or monetization.
3. Notable Resolutions:
   • Chenani Nasri Tunnelway Limited (CNTL): Approved for sale to Cube Highways in February 2025 after prolonged legal disputes.
   • Karyavattam Sports Facilities Limited (KSFL): Sale to Premier International approved, but delayed due to disputes with the Kerala government.
   • Mangalore SEZ Limited (MSEZ): ONGC and MRPL to acquire IL&FS’s 49.99% stake for Rs 121.77 crores.
4. InvIT Listing:
   • The Roadstar Infra Investment Trust (InvIT), holding key road assets, was listed on stock exchanges on March 11, 2025, marking a milestone in debt resolution.

Challenges and Litigations

• IECCL Resolution: Stalled due to disputes with lenders over the bid by Howen International, which faces scrutiny for its disqualification in the Pawan Hans divestment.
• Jharkhand Road Projects (JRPICL & JIICL): Delayed annuity payments by the Jharkhand government have hampered resolution. Contempt petitions are pending.
• TIFC Sale: Chronos Properties’ bid for The IL&FS Financial Centre (TIFC) faces hurdles over valuation disputes and MMRDA approvals.

Way forward

• The moratorium on 57 entities continues to prevent creditor actions that could derail the resolution.
• The New Board targets resolving the remaining entities by March 2026, with 65 filings planned post-March 2025.

Conclusion

The IL&FS resolution, one of India’s most complex debt restructuring exercises, is nearing its final stages. With over 60% of debt resolved and key assets monetized, the focus now shifts to addressing litigation bottlenecks and ensuring equitable creditor payouts. The NCLAT’s continued oversight remains critical to balancing stakeholder interests in this landmark case.

Also See: NCLAT restrains banks from declaring IL&FS from wilful defaulter