IL&FS Engineering Shares Plummet 4% After Disclosing Rs 2,627 Cr Bank Loan Default

Synopsis: IL&FS Engineering and Construction Company has confirmed that as of March 31, 2026, the entire Rs. 2,627.51 crore of outstanding bank loans is in default, with total financial indebtedness at Rs. 3,097.07 crore; the stock fell over 4 percent on Monday as the numbers put the company’s deepening insolvency back in focus.

Shares of the BSE-listed infrastructure construction company declined sharply on Monday after the company filed its quarterly default disclosure with both exchanges, confirming that not a single rupee of its bank borrowings is being serviced. 

With a market capitalization of Rs. 302 crore, the shares of IL&FS Engineering and Construction Company Limited were trading at Rs. 23.01 per share, down 4.32 percent from its previous closing price of Rs. 24.05 apiece. 

Default disclosure update

The disclosure for the period ending March 31, 2026 presents an unambiguous picture: of the Rs. 2,627.51 crore in loans and revolving facilities outstanding from banks and financial institutions, the full amount is classified as in default. There are no unlisted debt securities outstanding. Total financial indebtedness, combining short-term and long-term debt, stood at Rs. 3,097.07 crore as of the same date.

One important accounting detail: the company has not been accruing or providing for interest on its debt since the “Cutoff Date” defined under the Hon’ble National Company Law Appellate Tribunal order dated March 12, 2020, the order that placed the IL&FS group under a structured resolution framework. The exception is interest on Funded Interest Term Loans (FITL), where accrual continues. This means the reported debt figures do not capture interest that has continued to run in economic terms since 2020, making the disclosed Rs. 3,097.07 crore an understatement of the true liability.

What the numbers say about the company’s condition

The gap between the company’s indebtedness and its capacity to repay has not narrowed. As of September 2025, total assets stood at Rs. 1,645 crore on the consolidated balance sheet, against borrowings of Rs. 2,672 crore alone. Reserves have turned deeply negative, standing at Rs. -3,331 crore, which puts the book value per share at Rs. -244. On any conventional measure, the company is insolvent; it remains listed and operational only within the framework of the ongoing NCLAT-supervised resolution process.

Revenue tells a similar story. The company generated Rs. 62.36 crore in revenue for the December 2025 quarter and Rs. 321 crore for the full year FY25, against Rs. 3,991 crore in FY2014. That is a revenue collapse of roughly 92 percent over a decade, with no meaningful recovery in sight. The company has also reported accumulated losses of Rs. 3,60,990 lakh as of December 31, 2025, with Rs. 2,96,535 lakh in interest unrecognised in the books since the cutoff date, per a February 2026 exchange filing. Active investigations by the SFIO and the Enforcement Directorate add a further overhang.

Business Overview

Incorporated in 1988, IL&FS Engineering and Construction Company is an infrastructure development and civil construction company operating across roads, buildings, irrigation, oil and gas pipelines, power projects, and water treatment. It is a subsidiary of IL&FS Limited, which itself has been under government-appointed board management since October 2018 following a debt default that rattled India’s financial system. 

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.

The post IL&FS Engineering Shares Plummet 4% After Disclosing Rs 2,627 Cr Bank Loan Default appeared first on Trade Brains.