IL&FS group company shares that include stocks of IL&FS Transportation Networks, IL&FS Investment Managers and IL&FS Engineering in intra-day trade on Wednesday was trading higher by 10-20% after government took over the control of IL&FS board.
After getting a nod from the Insolvency & Bankruptcy Court in Mumbai, the government has taken control of Infrastructure Leasing & Finance (IL&FS). The government upon approval by the National Company Law Tribunal (NCLT) will work on constituting a new board for the debt-ridden NBFC company that is asked to draw a plan and file a response latest by October 15.
The new board will include six members with Uday Kotak as the head and other members include ICICI Bank Chairman Girish Chandra Chaturvedi, former head of the Securities and Exchange Board of India GN Bajpai, former IAS officer and Tech Mahindra chief Vineet Nayyar and former IAS officers Malini Shankar and Nanda Kishore.
The next hearing on the matter is scheduled for October 31.
Nomura opines that government's intervention in IL&FS group case is a welcome move and it will watch who offers liquidity in the short term. Real value of assets as well as level of haircuts is to be assessed. Axis bank, HDFC Bank and ICICI Bank are among the top bets, it added.