IL&FS Investment Managers FY26: A ₹260 Crore Fund House That Stopped Earning Fund Fees

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1 — At a Glance

FY26 closes with a tidy contradiction sitting on the books. Revenue rose to ₹54.91 crore from ₹44.92 crore — a 22.2% climb. Profit after tax went the other way, falling to ₹3.86 crore from ₹13.15 crore, a 70.6% drop. A company growing its top line while its bottom line shrinks by two-thirds has arranged its numbers in a way that asks to be read twice.

The operating line explains the strain: the operating margin sat at -2.77% for the year, meaning the core business lost money before ₹10.62 crore of other income carried profit before tax to ₹8.91 crore. The auditors signed off with a qualified opinion and a material-uncertainty note on going concern — the formal observation that a fund manager whose funds have run out their extended tenure has stopped generating fee income.

The market values all of this at ₹260 crore, or 67.4 times those earnings, against a peer median near 39.7x and an industry multiple of 39.7. The promoter, IL&FS itself, has had its 50.42% stake up for sale since December 2023.

A fund house lives on fees. This one, for FY26, recorded almost none from its holding entity. The record of what filled the gap is below.

2 — Introduction

IL&FS Investment Managers Limited — IIML on its letterhead, IVC on the exchange — was incorporated in 1987 and is one of India’s oldest private equity fund managers, having raised and managed over $3.5 billion across its life. It is a subsidiary of Infrastructure Leasing & Financial Services Limited, the same IL&FS whose 2018 collapse triggered a Serious Fraud Investigation Office probe that still shadows every audit report the group files.

The business was, historically, an early mover. The dump records first-investor positions across telecom, city gas distribution, shipyards, retail and media, with portfolio names including Indraprastha Gas, Shoppers Stop, Noida Toll Bridge and Gujarat Pipavav Port. Funds spanned general private equity, real estate and infrastructure.

The recent record is one of contraction rather than expansion. Per the Screener-extracted insights, funds managed fell from 15 to 5 and headcount from the mid-40s to 15. Assets under management stood at ₹1,055 crore as of March 2025, down a long staircase from earlier years.

Management changed hands across FY25 and FY26: CEO & CFO Manoj Borkar superannuated on December 31, 2024, with Lubna Usman appointed in his place; the Company Secretary role turned over; and a nominee director, Jayashree Ramaswamy, was appointed on February 13, 2026.

3 — Business Model: WTF Do They Even Do?

Strip the verticals — Private Equity, Real Estate, Infrastructure, InvIT — and the model is simple: IIML manages other people’s money for a fee, over the multi-year life of a fund. It raises a fund, invests it, charges management and advisory fees while the fund lives, and divests when the fund matures.

That last word is the problem. A fund has a tenure; when it ends, so does the fee. The going-concern note states plainly that the extended term of the funds it managed ended during the year, producing no fee income at the holding company and a sharp drop at certain subsidiaries. A fee-based manager that has run out of live funds to charge is a tollbooth on a road that has been closed for repaving.

The revenue mix, per the dump, was 100% management and consultancy services, 100% within India in FY25. There is no product to sell, no inventory, no factory — which is why the balance sheet carries fixed assets of just ₹0.30 crore. The entire enterprise is people, mandates and a track record.

The structure is a Russian-doll of entities: subsidiaries including IL&FS Urban Infrastructure Managers, IL&FS Infra Asset Management, a Mauritius investment manager, and Andhra Pradesh Urban Infrastructure Asset Management (a 51:49 JV with the Andhra government), plus a joint venture, IL&FS Milestone Realty Advisors, whose accounts are no longer prepared on a going-concern basis at all.

Reader question: if a fund manager’s funds have all reached the end of their tenure, what exactly is the ₹260 crore market cap pricing — the mandates, or the cash and the stake sale?

4 — Financials Overview

Figures are consolidated, in ₹ crore.

The top-line rise is concentrated: the March quarter alone booked ₹35.21 crore of sales against ₹7.58 crore in the same quarter a year earlier,