Mumbai: As many as 240 of the largest 500 corporate borrowers owing nearly 42 per cent of the overall corporate debt are expo-sed to a significant risk of refinancing Rs 1.4 lakh debt in FY17, said India Ratings and Research. Together, 240 companies owe Rs 11.8 lakh crore of the total corporate debt of Rs 28.1 lakh crore in India.
The research agency has bucketed these 240 entities into the ERR (elevated risk of refinancing) and stressed (already in default) categories. Of Rs 11.8 lakh crore, Rs 5.1 lakh crore debt falls under the stressed category and the rest of Rs 6.7 lakh crore debt is under ERR for FY17.
The companies, which are under ERR category holding Rs 4.6 lakh crore debt, could already be delinquent while the other entities holding the balance Rs 2.1 lakh crore debt are solvent and may be able to raise financing with additional collateral. Of this, Rs 1.7 lakh crore or 80 per cent of the FY17 refinancing requirements pertain to 100 entities.
Among the sectors that need refinancing are metal and mining, infrastructure and construction, telecom, oil and gas and power which account for 47 per cent of total refinancing requirement and contribute to 60 per cent of the total debt.
Capital intensive and commodity-linked sectors are primarily in the stressed and ERR categories and would continue to pose risks to creditors during the course of FY17, says Ind-Ra.
The banking sector exposure to the ERR is 24.9 per cent and to the stressed sector 18.7 per cent. These two categories of corporates continue to have a high dependence on the domestic banking system as they have limited access to the capital markets or foreign currency markets.
In the case of the top 10 mutual fund firms, their exposure to the 500 corporates is Rs 67,000 crore and their exposure in the ERR category is four per cent and 0.3 per cent in the stressed category.
