MUMBAI: Shares of three listed IL&FS group entities traded higher on Wednesday, buoyed by the government’s move inducting a new Board at the parent entity.
Shares of IL&FS Transportation Networks Ltd (ITNL), IL&FS Engineering and Construction Co Ltd (IECC) and IL&FS Investment Managers Ltd (IIML) surged higher between 10 and 20 per cent on BSE.
While ITNL closed at 32.20 per cent up from its previous close, IECC and IIML ended the day with 20 and 10 per cent gains respectively.
Prior to this week, ITNL was down 68 per cent till date in 2018, while IECC fell 71 per cent and IIML erased 73 per cent of the year’s gains.
On Monday, the government suspended the Board of the troubled infrastructure major in order to restore credibility and protect the country’s financial system and markets from a potential collapse. It inducted six new directors, who took charge on Wednesday. Most of the IL&FS directors have common presence in Boards of the group’s subsidiaries and consequently, ITNL said two of its directors from the parent entity, namely Hari Sankaran and Arun Saha, have stepped down from its Board. Both these directors also ceased to be Board members at unlisted entity IL&FS Financial Services Ltd.
Meanwhile, the government said it was fully committed to ensure the needed liquidity for IL&FS to ensure there won’t be further defaults. The new Board will have to submit a rescue and revival plan to NCLT by October 31.