Large companies such as JSW Steel Ltd, Tata Power Ltd and Piramal Enterprises Ltd are among at least 328 companies that have requested a moratorium on loans, according to data compiled by rating agency Icra Ltd. Most applicants have a relatively secure credit score of AA or less.
While some businesses could face cash flow issues due to the ongoing nationwide foreclosure – which has nearly crippled economic activity – others may simply be looking to save money as they prepare for months. harder to come, Icra said. “These companies believe it is best to preserve liquidity until new funding and sanctions are clarified. You are not sure when the sanction will be imposed, ”said Anil Gupta, vice president, sector manager, financial ratings, Icra.
Of course, borrowers will have to pay full interest accrued during the moratorium period once it ends.
The list includes the names of companies that have requested relief from banks and for which approval was received after the due date or is pending. The list was published by Icra as part of new guidelines established by the Securities and Exchange Board of India (Sebi) on relaxing compliance with acknowledgment of default, as part of the moratorium on loans granted by the Reserve Bank of India. On March 27, the RBI authorized banks to defer payment of maturities on working capital loans, which were due between March 1 and May 31.
Companies on Icra’s list come from industries such as hospitality, airports, non-bank financial corporations (NBFCs) including microfinance companies (MFIs), hospitals and real estate. Big names in the hospitality and aviation industries include Taj GVK Hotels, Lemon Tree Hotels Ltd and GMR Hyderabad Aviation SEZ Ltd. In the steel sector, Jindal Steel and Power Ltd and JSW Steel Ltd have called for a moratorium. The large real estate group Prestige Group is also on the list.
NBFCs and MFIs on the list include Indostar Capital Finance Ltd, Piramal Capital and Housing Finance Ltd, and Spandana Sphoorty Financial Ltd.
Even as companies line up for a moratorium, banks remain divided on whether NBFCs should get the benefit. The State Bank of India is not very keen on granting a moratorium on NBFCs and would prefer that they borrow under the Targeted Term Repurchase Window (TLTRO). Some banks, however, have said businesses in need should benefit from a moratorium. “If there is a need, then we are open to giving the NBFC a moratorium,” said the director of a public sector bank, on condition of anonymity.
Banks are also considering restructuring loans to companies affected by covid-19. Bankers have said businesses will take at least a year to recover and will need more help.
“We are considering reducing the margins, increasing the coverage period to 120 days instead of 90 days and determining the interchangeability between fund-financed and non-fund-based loans,” the banker added.
Businesses have raised ??51,989 crore via bonds and commercial papers since the announcement of the TLTRO facility in March, according to ESB data.
About 27 companies raised ??26,666 crore in commercial papers, while 18 raised ??25,323 crore via medium and long term bonds.
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