A source said the government is looking to appoint a new management, which would turn around the company.
The Modi government had come under heavy criticism from the Opposition led by Congress for failing to contain IL&FS contagion.
Sources close to IL&FS said it is likely to support the application as it will help resolve all the pending issues and reach at a comprehensive solution for the benefit of all stakeholders.
The key shareholders of IL&FS include LIC, SBI and Central Bank of India.
IL&FS, where LIC is the largest shareholder with 25.34 per cent stake, has a debt burden of over Rs 900 billion.