Broken Promise on India Shadow Lender Shakes Investor Confidence
- IndusInd Bank, L&T Finance loans to IL&FS drive stock losses
- IL&FS has missed debt payments even after government assurance
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Indian lenders are being punished for their exposure to a shadow lender as the government fails to make good on its promise to halt defaults by the distressed financier.
IndusInd Bank Ltd. has lost more than $1.9 billion of market value since it announced quarterly earnings as net income growth missed expectations and provisions for doubtful loans shot up. Investors also penalized the lender for not detailing all its loans to Infrastructure Leasing and Financial Services Ltd. L&T Finance Holdings Ltd. has lost nearly 6 percent after disclosing exposure to the beleaguered infrastructure firm while Yes Bank slumped 11 percent.