IVRCL Limited, once one of the fastest growing infrastructure companies, and which ruled the sector for nearly two decades, today faces an uphill task to get back its mojo, bogged down as it is by piles of debt.

The latest move to bring the Hyderabad-based company back to normalcy is by the State Bank of India, which has initiated corporate insolvency proceedings to recover dues, and to possibly find a way out of the current mess.

The news of SBI invoking the provisions of the Insolvency and Bankruptcy Code 2016 (IBC) pushed the stock up to ₹6.45, up by 4.88 per cent.

As is the case with several major defaulting infrastructure companies going to the National Company Law Tribunal, SBI, the country’s biggest lender, has initiated Corporate Insolvency Resolution Process through an application against the company under Regulation 7 of the IBC 2016.

Divestment The company, which recently announced an agreement to sell two of its tollways in Kumarapalayam and Salem in Tamil Nadu to Singapore-based Cube Highways and Infrastructure for ₹726 crore, hinted it would divest stake in some of the other highways.

These include Jalandhar Amritsar Tollways Limited, IVRCL Chengapalli Tollways, IVRCL Chandrapur Tollways Limited and Indore Gujarat Tollways Limited, among others.

The IVRCL management had said it has initiated negotiations with some of the likely suitors, and that it would be able to strike a deal subject to lenders’ and regulatory approvals.

The Insolvency Resolution Professional, appointed by NCLT, would have about six months to work out ways to divest some of the projects and transfer the proceeds to lenders.

The management of the company would be transferred to the Resolution Professional and explore ways to find buyers of its assets.

IVRCL’s business has drastically slipped over the past 12 quarters due to paucity of funds, and its revenues, too, nosedived to ₹2,015 crore in 2016-2017.

With the debtors converting debt into equity, the promoter holding, which was about 13 per cent a couple of years ago, has slid to about 5.37 per cent with the rest with the public. Moves through CDR and SDR also failed.

In spite of having a strong order-book, questions arise on whether the company would be able to revert to normalcy.

While the hearing on the banker’s application was undertaken on January 8, the orders were reserved by NCLT.