July 26, 2015

Top Indian Companies Burdened With Debt

Debt levels at some of the top Indian companies, including those owned by billionaires Anil Ambani, Shashi & Ravi Ruia, Anil Agarwal and Savitri Jindal & family, have shot up in the past year while profits continue to be under pressure, according to a new report by Credit Suisse.

Credit Suisse last year in a report titled “House of Debt” evaluated 10 Indian corporates, including companies owned by these billionaires, and found that a steep growth in borrowings had stretched the financials of these companies.

A year later now, in a report titled ‘House of Debt–Revisited’, it says that debt levels at those 10 corporate groups have shot up 15% in the past year and profits continue to be under pressure.

The corporates, in order of their gross debt levels, are: Anil Ambani’s Reliance ADA Group, Vedanta Resources , Essar Group, Adani Group,  Jaypee Group, JSW Group, GMR Group, Lanco Group, Videocon Group and GVK Group.

The largest increases have been at GVK Power & Infrastructure, Lanco Infratech Ltd. and Anil Ambani’s Reliance ADA where the gross debt levels are up 24% from last year, according to Credit Suisse.

While many of these groups have projects, including several infrastructure projects, under construction, the net debt increase has outpaced the capital expenditure during this period, the report says. Meaning, they are borrowing more than they are investing.

Read more at  http://www.forbes.com/sites/meghabahree/2015/04/20/china-steps-up-its-presence-in-the-indian-subcontinent/

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