No Indian company wants to be spoken of in the same breath as the embattled Infrastructure Leasing & Financial Services (IL&FS) Group. But that's the ignominy IDFC Ltd, the erstwhile infrastructure financier, is dealing with now. A shareholder, who's also a corporate finance expert, calls it "a slightly more legitimate version of the scam-ridden IL&FS." They are one of many investors enraged over how IDFC shares have languished since it de-merged itself from IDFC Bank in 2015, when its infra lending business was moved to the latter. The IDFC stock has since slid 8% while the bellwether BSE Sensex has doubled in the same period. More distressingly, IDFC's market value is just $1.2 billion—half the combined worth of its 36% holding in IDFC First Bank and 100% stake in IDFC Asset Management Company. Tired of delays in unlocking the value of these investments, IDFC investors booted out the chairman of the board, Vinod Rai, in September. But IDFC, in which the Indian government owns 16%, is caught between a rock and a hard place. A reverse merger with IDFC First Bank based on both entities' current share prices may not be ideal for IDFC investors since its shares are trading at a huge discount. And divesting its stakes in IDFC First Bank and IDFC AMC may be perceived as a distress sale. Simply put, no one would want to trade places with the board and management of IDFC right now
