IL&FS Engineering and Construction Company Limited has disclosed substantial defaults on loan repayments and interest payments to banks and financial institutions as of December 31, 2025. The company submitted this disclosure to both BSE Limited and National Stock Exchange of India Ltd on January 5, 2026, in compliance with SEBI Circular No. SEBI/HO/CFD/CMD1/CIR/P/2019/140 dated November 21, 2019.

Financial Indebtedness Overview

The company's financial position reveals significant stress across its loan portfolio. The disclosure provides a comprehensive breakdown of the company's outstanding obligations and defaults across different categories of financial instruments.

Loan Defaults and Outstanding Amounts

The most striking aspect of the disclosure is that the default amount of ₹2,727.72 crores exceeds the total outstanding amount of ₹2,627.72 crores from banks and financial institutions. This indicates the severity of the company's financial distress and the accumulation of unpaid obligations over time.

Regarding unlisted debt securities, including Non-Convertible Debentures (NCDs) and Non-Convertible Redeemable Preference Shares (NCRPS), the company reported nil amounts for both total outstanding and defaults in this category.

Regulatory Context and Interest Provisions

The company has provided an important clarification regarding interest calculations. No interest is being accrued or provided post the cutoff date, which was defined in the National Company Law Appellate Tribunal order dated March 12, 2020. The only exception to this policy is interest on Funded Interest Term Loan (FITL), which continues to be calculated.

Compliance and Disclosure

The disclosure was signed by Rajib Kumar Routray, Company Secretary and Compliance Officer, and submitted to both major stock exchanges where the company's shares are listed. The formal communication was addressed to BSE Limited at Phiroze Jeejeehoy Towers, Dalal Street, Mumbai and National Stock Exchange of India Ltd at Exchange Plaza, Bandra-Kurla Complex, Mumbai.

This regulatory filing underscores the ongoing financial challenges faced by IL&FS Engineering and Construction Company Limited, with total financial indebtedness reaching ₹3,097.28 crores as of December 31, 2025.

IL&FS Engg & Const Company , a company grappling with severe financial challenges, has reported a net loss of Rs 1,119.00 crore for the six months ended September 30, 2025. This figure, while substantial, shows a marginal improvement from the Rs 1,377.00 crore loss reported in the same period last year.

Financial Performance Overview

The company's financial results paint a picture of ongoing distress:

Quarterly Performance

For the quarter ended September 30, 2025:

Key Observations

1. Revenue Decline: The company's revenue has seen a significant year-on-year decrease, both on a half-yearly and quarterly basis.

2. Loss Reduction: Despite the revenue decline, IL&FS Engineering has managed to reduce its net losses compared to the previous year.

3. Operational Challenges: The operating profit margin (OPM) for Q2 2025 stood at -16.19%, indicating ongoing operational difficulties.

4. Debt Burden: The company continues to face a heavy debt burden, with interest expenses of Rs 0.90 crore in Q2 2025, up from Rs 0.60 crore in Q2 2024.

Going Concern Issues

IL&FS Engineering's ability to continue as a going concern remains in question due to several factors:

• Fully eroded net worth
• Current liabilities exceeding current assets by Rs 3,85,192.00 lakhs
• Ongoing resolution proceedings under the NCLAT framework
• Significant reduction in operating revenue over the past three years
• Continued defaults on loan payments to lenders, including promoter group entities

The company's management has prepared the financial results on a going concern basis, considering the status of the resolution process initiated by the Reconstituted Board of IL&FS.

Resolution Process

The Reconstituted Board of IL&FS is in the process of finalizing a comprehensive approach to manage the current situation, including:

• Potential sale of existing equity shareholding by the IL&FS Group
• Inviting expressions of interest for acquiring equity stake in the company
• Approval of a bid by the Committee of Creditors (CoC)

The successful bid is now awaiting approval from Justice D.K. Jain (Retd.) and subsequent submission to the National Company Law Tribunal (NCLT).

Conclusion

While IL&FS Engineering shows some signs of reducing its losses, the company's financial position remains precarious. The success of the ongoing resolution process will be crucial in determining the company's future viability and its ability to overcome its current financial distress.