Categories: Business

india ratings estimates corporate stress could rise by FY22

Photo: PTI

Corona crisis

new Delhi. Due to the economic impact of the Kovid-19 pandemic, out of the loans taken by the top-500 companies, a loan of Rs 1.67 lakh crore may raise the concern of banks by March 2022. Companies can lag behind repaying this debt on time and it may fall into the category of stressed debt. This apprehension has been expressed in a report released on Monday. India Ratings and Research has said in its report that the total amount of such loans, including this amount, can reach Rs 4.21 lakh crore, which will be 11 percent of the total debt.

Earlier this year, when the corona virus started spreading, there was a concern about the quality of loans of banks. The Reserve Bank gave an exemption on payment of various loans till August 2020, which will further increase the pressure due to the impact of Kovid-19 on the economy. The government has also announced an incentive package of Rs 21 lakh crore to reduce the economic impact of the epidemic.

The rating agency believes that out of the loans taken by the top 500 companies due to the epidemic and along with other policy measures, loans worth Rs 1.67 lakh crore may prove to be additional pressure for banks. The agency has said that at the time of the onset of the epidemic, it had projected a debt of Rs 2.54 lakh crore to be converted into stranded debt by March 2022. Now, with the conversion of additional loan of Rs 1.67 lakh crore, this figure can reach a total of Rs 4.21 lakh crore. This would be up to 18.21 percent of the total debt of the entire corporate sector. This figure is higher than the 11.57 percent figure currently considered pressurized. The agency has warned that the pressure to refinance may increase in the coming times and it can continue to be challenging for companies to raise financial resources on time.

This post was published on July 6, 2020 7:47 pm

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