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Bad Loans Crisis : Biggest Actions in Indian Corporate Houses

Bad Loan Crisis
Written by Team Maffat

RBI (Reserve Bank of India) asked Indian Banks to recall the Bad Loans from Corporate Houses.

The Reserve Bank of India (RBI) has decided to clean the balance sheets of Indian Banks. The Indian Banks collectively saddled with 5,00,000 Crore of bad loans by end of this year. So, the banks started collecting payments from Corporate Houses.

We may see ‘for sale’ tags on airports, roads, ports, steel plants, cement units, refineries, malls, corporate parks, land banks, coal mines, oil blocks, express highways, airwaves, Formula One teams, hotels, private jets, and even status symbol corporate HQs. Substantial stakes in firms, and in some cases entire companies, are on the block.

The top 10 business house debtors alone owe Rs 5,00,000 crore to the banks. They will be forced to sell assets worth over Rs 2,00,000 crore.

Now, Let’s Check how much these corporate houses are having debt.

Reliance Group (Anil Ambani)

The Anil Ambani-led Reliance Group alone owes Rs 1,21,000 crore of loans to the banks and had an annual interest liability of Rs 8,299 crore.

Reliance Group Anil Ambani Debt

Reliance Group Anil Ambani Debt

Total Loan : INR 1,24,956 Crore

Assets for Sale : INR 60,000 Crore

Ruia’s Essar group (Shashi and Ravi Ruia)

Shashi and Ravi Ruia’s Essar group has gross debt of Rs 1,01,461 crore. The group is looking to sell about 50 per cent stake of its family silver.

Ruia Essar group

Ruia Essar group

Total Loan : INR 1,01,461 Crore

Assets for Sale : INR 50,000 Crore

Adani group (Gautam Adani)

The billionaire Gautam Adani’s Adani group, with Rs 96,031 crore debt, is under pressure to sell its stake in the Abbott Point coal mines, port and rail project.

Adani Debt

Adani Debt

Total Debt : INR 96,031 Crore

Assets for Sale : INR 6,000 Crore

Jaypee group (Manoj Gaur)

Manoj Gaur’s Jaypee group’s debt is over Rs 75,000 crore. The group has agreed to sell its 20mtpa of cement assets to Kumar Birla-led Ultratech for Rs 15,900 crore.

Jaypee Group Debt

Jaypee Group Debt

Total Debt : INR 75,163 Crore

Assets for Sale : INR 24,000 Crore

GMR group (GM Rao)

G.M. Rao’s GMR group was one of the first debt-ridden companies to sell off assets; it has already offloaded stake worth Rs 11,000 crore in its roads, power and coal assets in the last two years.

GMR Group Debt

GMR Group Debt

Total Debt : INR 47,976 Crore

Assets for Sale : INR 5,000 Crore

Lanco group (L Madhusudhan Rao)

The Lanco group has debts of Rs 47,102 crore. It completed the sale of its Udupi plant in FY16 for Rs 6,300 crore (15 per cent of FY15 debt).

Lanco Group Debt

Lanco Group Debt

Total Debt : INR 47,102 Crore

Assets for Sale : INR 25,000 Crore

Videocon group (Venugopal Dhoot)

Despite the Videocon group selling its stake in its Mozambique gas fileds for Rs 15,000 crore, gross debt has continued to rise: it is up 10 per cent year-on-year to Rs 45,405 crore, while net debt has remained largely flat at Rs 39,600 crore.

 

Total Debt : INR 45,400 Crore

Assets for Sale : INR 9,000 Crore

GVK group (G.V. Krishna Reddy)

To repay some of its debt of Rs 34,000 crore, the GVK group is in talks to sell 49 per cent of its airport subsidiary, which has an enterprise value of Rs 10,000 crore.

GVK Group Total Debt

GVK Group Total Debt

Total Debt : INR 33,933 Crore

Assets for Sale : INR 10,000 Crore

Others :

Reliance Industries ( Mukesh Ambani) : India’s largest debtor, Mukesh Ambani’s Reliance Industries (RIL), has a total debt of Rs 1,87,079 crore (up from Rs 62,500 crore as on March 31, 2010, mainly because of the Rs 1,50,000 crore roll-out of Reliance Jio), the biggest among all corporate houses, and the largest ever in Indian corporate history.

Tata Group : The Tata Group, India’s largest corporate group, with over 100 companies, wants to sell its UK steel business, which came as part of the $12.9 billion acquisition by Tata Steel of Corus in 2007.

Naveen Jindal-led Jindal Steel and Power Limited has agreed to sell a 1,000 MW power plant to his elder brother Sajjan Jindal at an enterprise value of Rs 6,500 crore and is looking to sell other assets to reduce debts of Rs 46,000 crore.

DLF Ltd, India’s most valuable property developer, has sought expressions of interest from several top global investors to sell a 40 per cent stake in its rental assets arm as it seeks to pare debt. The rental assets arm holds about 20 million sq.ft of leased-out office space and is valued at about $2 billion,

India’s largest sugar producer Shree Renuka Sugars Ltd has declared its Brazilian unit bankrupt and has filed for protection in the country. The company plans to fully exit from the National Commodity & Derivatives Exchange (NCDEX), as part of a strategy to sell all its non-core assets to reduce debt.

The Sahara group’s sale list is long: 86 real estate assets, a 42 per cent stake in Formula 1 team Force India, four airplanes, and its hotels: the Sahara Hotel in Mumbai, Grosvenor House, London, the New York Plaza Hotel, and The Dream New York Hotel.

Almost all of Vijay Mallya’s assets are on sale by the banks.

Summary
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The Reserve Bank of India (RBI) has decided to clean the balance sheets of Indian Banks. The Indian Banks collectively saddled with 5,00,000 Crore of bad loans by end of this year.


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