The Rajus-promoted Maytas Infra has started taking a toll on the banking system with non-banking finance company IFCI Ltd revoking a guarantee provided by ICICI Bank, to recover its dues.
In the coming days, other lenders are expected to initiate similar steps to recover their dues from the company, which is facing the prospects of a change of management.
"It is a matter of time before the company defaults in loan repayment to other lenders," said a banker.
IFCI executives said that the company revoked the guarantee earlier this month to recover its dues amounting to Rs 95 crore (Rs 950 million) from Maytas Infra.
They said that the NBFC had taken over the loan from another entity around October last year and the company was initially paying its dues on time. But in early January a default was seen, resulting in a serving of a notice to Maytas Infra. When Maytas Infra did not clear the dues, the guarantee given by ICICI Bank was revoked and the amount was recovered on February 10.
"We no longer have any debt exposure to Maytas Infra though we hold 17 per cent stake in the company," said an IFCI spokesperson.
When contacted, an ICICI Bank spokesperson said: "We are monitoring our exposure and exploring possible courses of action with other lenders." He, however, refused to disclose the level of exposure that the private sector lender had to Maytas Infra and Maytas Properties.
A host of Indian financial institutions ranging from State Bank of India (Rs 500 crore or Rs 5 billion) to IDBI Bank (Rs 300 crore or Rs 3 billion), Indian Overseas Bank (over Rs 90 crore or Rs 900 million), Central Bank of India (Rs 49 crore or Rs 490 milliom) and Bank of India (Rs 215 crore or Rs 2.15 billion by way of guarantees), and have exposure to the two companies for which the corporate affairs ministry has sought permission to supercede the board of directors.
Bank of India, however said that it has not seen any guarantees being revoked so far.
In addition, companies such as IDFC have provided to some of the infrastructure projects being put up by Maytas Infra.
In case of exposure to projects, which have been hived off into special purpose vehicles, sources said, financial institutions had adequate cover through the right to take management control.
In addition, Maytas was a co-promoter in a large number of cases, which provided additional comfort to the lenders.