Financials including Yes Bank and Bandhan Bank have said their exposure to IL&FS is about 25.30 billion rupees ($355.75 million) and 3.85 billion rupees, respectively. The benchmark BSE index closed down 1.02 percent at 35,656.7. The broader NSE index ended 1.10 percent weaker at 10,661.55. The BSE and NSE indexes are the top drags among major Asian peers, closing at their lowest in 25 days.
Yes Bank closed 5.5 percent lower, while ICICI Bank ended down 3.82 percent. ICICI Bank Ltd, the top laggard on the broader NSE index, fell nearly four percent ahead of its December-quarter results, while SBI traded 2.47 percent lower. Dewan Housing Finance Ltd fell as much as 7.6 percent after reporting a drop in net profit last week, while housing finance company Indiabulls Housing Finance slipped 5.5 percent.
"The issue with Infrastructure Leasing and Financial Service Ltd (IL&FS) is not over, contrary to earlier beliefs and that is why we see housing finance companies in the red today," said AK Prabhakar, head of research, IDBI Capital - Mumbai. A string of defaults at the major Indian infrastructure financing and building company had triggered sharp falls in the stock and debt markets last year amid fears of contagion within the rest of the country's financial sector. On Friday, IL&FS Transportation Networks Ltd unit Elsamex said it would initiate insolvency proceedings in Spain.