Now that the Reserve Bank of India has allowed the banks to accept requests from their borrowers for a moratorium on loan repayments, it is learnt that many companies, including large ones have approached their lenders, as per a report in BloombergQuint. A list of 328 such companies has been compiled by the rating agency ICRA as per guidelines issued by the Securities and Exchanges Board of India (SEBI).
The ICRA list shows there are companies like Air India Express, Bharat Aluminium and Tata Power which have sought the 3-month moratorium on loan repayments from their lenders. It is reported that many among this 328 have already received the approval from their lenders while the others are awaiting the nod.
ICRA will not classify the non-payment of the loan instalments during the moratorium as missed repayments for rating purposes. If the companies fail to get the approval from their lenders and the companies failed to make the repayments, the status will be reviewed later by ICRA.
It may be recalled that while the moratorium gives a temporary reprieve and preserving liquidity in the low or zero revenue period, the companies have to ultimately make the loan repayments and also bear the interest on them for the delayed period. The banks will escape the downgrading of the asset quality despite the loan defaults since the moratorium has been recognised in light of the severe situation faced by companies due to the coronavirus lockdown.
This need not be considered as the final one as far as ICRA is concerned.
Among the companies in the list, each has its own set of issues to deal with. Air India Express, the low-cost airline of the national carrier, has had to ground all its flights. The company says it is looking at operating cargo flights with essentials during this period.
There’s even a healthcare company, Aster DM Healthcare that runs a chain of clinics and pharmacies. The company has reportedly closed down its unit in Kuwait which was making losses.
Bharat Aluminium, now owned by the Vedanta Group of the Agarwals, has actually posted a 17% hike in turnover from ₹8,997 crore in 2017-18 to ₹10,549 crore in the year ending March 31, 2019.
JSW Steel, included in ICRA’s list of 328 companies, has a debt portfolio of ₹49,500 crore as on December 31, 2019.
Tata Power says it has debts to the tune of ₹9,900 crore outstanding in its books and the company is rated AA-/A1+.