ADVERTISEMENT

Large Firms Start Seeking Loan Moratorium From Banks

A look at some of the top firms that have approached their lenders for the moratorium.

A customer uses an automated teller machine (ATM) at a State Bank of India Ltd. (SBI) branch at night in Bengaluru, India. (Photographer: Karen Dias/Bloomberg)
A customer uses an automated teller machine (ATM) at a State Bank of India Ltd. (SBI) branch at night in Bengaluru, India. (Photographer: Karen Dias/Bloomberg)

At least 328 companies have sought a three-month loan repayment moratorium from their respective lenders, a note prepared by rating agency ICRA Ltd. showed on Friday.

The list comprises firms that have either received an approval for the moratorium after the due date for repayments, or are still awaiting confirmation from their lenders.

The ratings agency is required to disclose the entities which it rates and have sought the moratorium, as per guidelines issued by the Securities and Exchanges Board of India. ICRA, however, hasn’t classified the repayments under the moratorium period as missed repayments.

“However, it may be noted that for the entities that are yet to receive an approval for the moratorium from their Lending Institutions, if the same is not received in due course, ICRA would review its stance on default recognition,” it said in the note.

On March 27, Reserve Bank of India Governor Shaktikanta Das announced that banks and other lending institutions in India would be allowed to provide a three-month repayment moratorium to their term loan borrowers, without attracting any asset quality downgrades or change in credit rating of the borrowers. While repayments would be deferred, the moratorium would increase the repayment period of the borrowers and add to their interest cost.

In its note, ICRA said the list it has provided isn’t comprehensive as information regarding certain rated entities isn’t readily available. For those which are not part of the list, the ratings agency would be making separate disclosures, it said.

Here’s a look at some of the top companies which have approached their lenders for the moratorium:

Air India Express

Air India’s low-cost operation is facing cashflow problems as domestic air travel has been completely suspended under the national lockdown. Earlier this week, the carrier said that it will be operating to transport perishable essential items, even though it doesn’t have cargo planes in its fleet.

Aster DM Healthcare

The Dubai-based private sector healthcare services provider has recently shuttered its loss-making subsidiary in Kuwait. The company runs 116 clinics and more then 238 pharmacies across India. It has recently promised to provide its facilities for treatment of Covid-19 patients in Kerala.

Bharat Aluminium Company

The New Delhi-headquartered aluminium producer is currently owned by Vedanta Resources Ltd. In the year ended March 31, 2019, the company reported total income of Rs 10,549 crore, compared with Rs 8,997 crore a year ago.

Jindal Steel & Power

The steel producer owned by Naveen Jindal has presence in steel, power, mining and infrastructure sectors, and is part of the $25-billion OP Jindal Group. The company recently disclosed to stock exchanges that its promoter entities Opelina Sustainable Services Ltd., OPJ Trading Pvt. Ltd., and Gagan Infra Energy Ltd have repaid Rs 391 crore out of their Rs 747 crore debt.

JSW Steel

The Sajjan Jindal-owned company is one of India’s largest steel producers. It recently received legal approvals to purchase assets of Bhushan Power & Steel Ltd. under the Insolvency and Bankruptcy Code for Rs 19,700 crore. JSW Steel’s net debt as on December 31 stood at over Rs 49,500 crore.

Also Read: Why Loan Moratorium May Be A Problem For Mutual Funds

Tata Power

With over 30 percent of the power it produces coming from renewable sources, Tata Power is one of the largest renewable power producers in the country. In March the company disclosed that its long term borrowings are in the range of Rs 9,900 crore for financial year 2019-20. It has an installed capacity of 10,763 MW.