IL&FS sells GIFT City Properties to tackle debt crisis
29 Feb 2024
2 Min Read
CW Team
Infrastructure Leasing & Financial Services (IL&FS), a non-banking finance company in trouble, sells commercial properties in GIFT City, Gujarat. These properties are owned by IL&FS subsidiary Sabarmati Capital Two Ltd (SCTL) and span over 540,000 sq ft. They will be put up for auction through the Swiss Challenge process. The sale includes 58 commercial offices across 21 floors of the GIFT TWO tower, including spaces already leased to Tata Consultancy Services.
SCTL was created to develop commercial spaces in GIFT City and has constructed two towers, GIFT ONE and GIFT TWO, totalling over 1.61 million sq ft. GIFT TWO, which started operations in 2016, comprises a basement, ground floor, and 28 upper floors, covering 0.8 million sq ft. Although GIFT City owns the land, the built-up area belongs to IL&FS subsidiaries under a 99-year lease since 2013.
"Monetisation of real estate assets is an important part of IL&FS resolution, and sale of office space in GIFT City 2 forms part of the same process," said an IL&FS spokesperson.
IL&FS has been working to address its debt crisis since it failed to meet repayment obligations in September 2018, which significantly affected India's non-banking finance sector. The government replaced the IL&FS board to initiate debt resolution efforts.
Recent disclosures indicate that IL&FS has addressed debts exceeding Rs 560 billion and discharged Rs 360 billion across group companies while estimating the overall resolution at Rs 610 billion. In 2022, Brookfield Asset Management successfully bid over Rs 10.8 billion to acquire IL&FS' headquarters in Mumbai's Bandra-Kurla Complex.
GIFT City has experienced a surge in momentum due to government initiatives and private sector interest. A July clarification by the Central Board of Direct Taxes exempts income generated by non-resident investors from offshore investments routed through an AIF in an IFSC from taxation. Additionally, Gujarat exempted GIFT City from a long-standing liquor prohibition law to attract foreign investments.
GIFT City is becoming a financial hub, hosting over 500 entities, including fintech companies, banks, stock exchanges, and alternative investment funds. It also has India's first bullion exchange with over 100 qualified jewellers on board, indicating its growing significance in the financial landscape.
Infrastructure Leasing & Financial Services (IL&FS), a non-banking finance company in trouble, sells commercial properties in GIFT City, Gujarat. These properties are owned by IL&FS subsidiary Sabarmati Capital Two Ltd (SCTL) and span over 540,000 sq ft. They will be put up for auction through the Swiss Challenge process. The sale includes 58 commercial offices across 21 floors of the GIFT TWO tower, including spaces already leased to Tata Consultancy Services.
SCTL was created to develop commercial spaces in GIFT City and has constructed two towers, GIFT ONE and GIFT TWO, totalling over 1.61 million sq ft. GIFT TWO, which started operations in 2016, comprises a basement, ground floor, and 28 upper floors, covering 0.8 million sq ft. Although GIFT City owns the land, the built-up area belongs to IL&FS subsidiaries under a 99-year lease since 2013.
Monetisation of real estate assets is an important part of IL&FS resolution, and sale of office space in GIFT City 2 forms part of the same process, said an IL&FS spokesperson.
IL&FS has been working to address its debt crisis since it failed to meet repayment obligations in September 2018, which significantly affected India's non-banking finance sector. The government replaced the IL&FS board to initiate debt resolution efforts.
Recent disclosures indicate that IL&FS has addressed debts exceeding Rs 560 billion and discharged Rs 360 billion across group companies while estimating the overall resolution at Rs 610 billion. In 2022, Brookfield Asset Management successfully bid over Rs 10.8 billion to acquire IL&FS' headquarters in Mumbai's Bandra-Kurla Complex.
GIFT City has experienced a surge in momentum due to government initiatives and private sector interest. A July clarification by the Central Board of Direct Taxes exempts income generated by non-resident investors from offshore investments routed through an AIF in an IFSC from taxation. Additionally, Gujarat exempted GIFT City from a long-standing liquor prohibition law to attract foreign investments.
GIFT City is becoming a financial hub, hosting over 500 entities, including fintech companies, banks, stock exchanges, and alternative investment funds. It also has India's first bullion exchange with over 100 qualified jewellers on board, indicating its growing significance in the financial landscape.
Next Story
MoHUA Plans New Role for Smart City SPVs
In a significant policy move, the Ministry of Housing and Urban Affairs (MoHUA) has issued an advisory encouraging the continued use and repurposing of Special Purpose Vehicles (SPVs) formed under the Smart Cities Mission (SCM). This marks a step toward sustaining urban transformation by leveraging institutional capabilities and infrastructure developed over the past decade.Initiated in 2015, the Smart Cities Mission introduced a new era of urban planning in India, with each of the 100 selected cities forming SPVs under the Companies Act, 2013. These entities, jointly owned by state government..
Next Story
ADB Approves $110 Million Loan to Boost Skills in Gujarat
The Asian Development Bank (ADB) has approved a USD 109.97 million (Rs 9.27 billion) results-based loan to support Gujarat鈥檚 efforts to become a global industrial hub by developing a future-ready, skilled workforce.The funding will back the Gujarat skills development programme, led by the Department of Labour, Skill Development and Employment in collaboration with Kaushalya: The Skill University (KSU). The initiative aims to equip the workforce with advanced, industry-aligned skills to meet rising employment demand in high-growth sectors.According to ADB, the programme seeks to strengthen in..
Next Story
SDAL Tests Rudrastra UAV and Bhargavastra Defence System
Solar Defence and Aerospace Limited (SDAL) has successfully completed a key flight test of its indigenous Hybrid VTOL UAV Rudrastra at the Pokharan Firing Range, aligning with Indian Army performance benchmarks for mission adaptability, high endurance, precision engagement, and vertical take-off and landing (VTOL) capability.The trial marks a notable achievement in India鈥檚 Aatmanirbhar Bharat initiative, underscoring advancements in home-grown military technology. The Rudrastra UAV demonstrated a mission radius exceeding 50 km with uninterrupted video relay, a total operational range of over..
