“Never Too Big To Fail” by Sandeep Hasurkar

Events I write about are not too far away to have faded from our memories. When the stock market in India went into a tizzy starting October 2018 after a long period of growth, analysts said the ripple had been cast by the IL & FS Story. Some of us had some information in the media about things that followed. Many may not know what the story was about.

In this context, the book I read recently gives you an accurate picture of what happened over the decades in Infrastructure and Financial Services (IL & FS), the gigantic infrastructure financing company in India. “Never Too Big To Fail” is the catchy title given by author, Sandeep Hasurkar for this book, published by Rupa in November 2020. Hasurkar has over three decades experience as an investment banker, term lender and policy adviser with leading financial institutions.

You have to read the book for yourself to understand the issues involved. It describes events that led to bankers, Government officials, industrialists and more than anyone else- the common investor being shocked one fine day to hear that such a well-known name in corporate circles had run up borrowings of Rs 91,000 crores and begun to default on re-payments. The IL & FS had grown since its inception in 1987 to become a conglomerate in their chosen space with as many as 340 subsidiary companies – which had made these borrowings! Perhaps the bankers gave willingly to these subsidiaries because of the so-called impeccable credentials of the parent company and its enviable AAA rating.

There is some repetition in the 245 page book. One area where the author could have done better, in my opinion, is to set the context for the mind-boggling figures. What exactly does Rs 91,000 crores mean, to the layman? To put things in perspective, understand this:- The per capita income in India its Rs 11, 254 per month or Rs, 1,35,000 during the year 2019-20. The median price for buying a house in a metro city is Rs 15,00,000 and in a developed rural area Rs 5,00,000. The healthcare allocation in the Union Budget for 2020-21 is Rs 67,484 crores.

For those not familiar with the terminology, in India we often use ” crores” to denote a figure of 10 million. A crore is made up of 100 lakhs ( 100,00,000). This means the borrowings mentioned in this book by IL & FS can be written as 910, 000 million or 910 billion. It tires me to write this out but if I am not mistaken that is- and hold your breath: – Rs, 910,000,000,000.

There are many lessons in this book. As a common man, I can only hope that some heed is paid to them.