Rating agencies had red-flagged excessive leverage of IL&FS and its arms

The agencies did not flag the issues in time for investors to avoid losses on account of the default

A number of rating agencies had been flagging the excessive leverage of Infrastructure Leasing & Financial Services (IL&FS) and its arms for over a year before the crisis finally hit home.

A look at rating notes issued before the defaults show leverage and liquidity emerging as key risks for the company and its arms. Getting strategic partners, and selling off its assets were seen as important to meet future obligations. However, the plans either did not materialise or took too long to benefit the company.

The IL&FS Group has undergone multiple defaults following liquidity issues in recent times. This has