Big banks and Rakesh Jhunjhunwala line up to bid for IL&FS Securities

MUMBAI: Lenders including HDFC Bank, ICICI Bank and Axis Bank, and Rakesh Jhunjhunwala’s private equity firm Rare Enterprises are among a dozen bidders for the securities business of Infrastructure Leasing & Financial Services (IL&FS).

IL&FS Securities Services Ltd (ISSL) is the first IL&FS subsidiary to be put on the block, as the financially struggling infrastructure lender’s new management seeks to sell assets as part of plans to raise funds for paring its Rs 91,000-crore debt. It expects the sale of ISSL to bring in about Rs 400 crore, said a person with knowledge of the development.

A deal for the securities business was previously struck with IndusInd Bank and Securities & Exchange Board of India had approved the proposal. However, the new management wanted to follow a transparent bidding process and put the business up for rebidding. The procedure for selling the unit again started on November 12 and the last date for submission of response was November 23.


“A shortlist will happen soon. The valuation of the company should be around IndusInd Bank’s offer of Rs 400 crore,” said the person, speaking on the condition of anonymity.

ICICI Bank and HDFC Bank did not respond to emails seeking comment. Axis Bank said it did not want to comment on market speculation while Rare Enterprises could not be reached for comment. ISSL, incorporated in 2007, reported a profit of Rs 45 crore on revenue of Rs 324.5 crore in the last financial year, IL&FS said in its annual report for fiscal 2018.

The year before, its revenue was Rs 342.65 crore. It has more than 1,000 broker client accounts and has foreign portfolio investors and foreign institutional investors on its customer list. The company does more than 3 million transactions every day on stock exchanges the report said. ISSL’s volumes have grown consistently over the years and client acquisition remained strong in its three key verticals: clearing, custody and fund accounting, the report said.

Arpwood Capital and JM Financial were appointed the financial and transaction advisers for the sale. Alvarez & Marsal was named the resolution consultant.

IL&FS had approached the National Company Law Tribunal to resolve its problems with creditors without going in for liquidation.

The ministry of corporate affairs, meanwhile, filed an application seeking a moratorium on loan repayment. The tribunal on Monday deferred the hearing to Thursday.