Close to 15 per cent or corporate debt worth Rs 4.6 lakh crore is stressed, revealed a study by IIFL Securities. These estimates were arrived at using the parameters set by the RBI and were analysed on the universe of 2,306 companies that had an aggregate debt of Rs 31.3 lakh crore and pertains to companies with debt more than Rs 1 crore as of FY20.
Debt of 192 companies amounting to Rs 22.9 lakh crore was classified under large private or PSU companies or those already stressed. This leaves the residual cases of Rs 8.3 lakh crore for 2,114 companies that were further divided into mild, moderate, severe and not stressed categories. About Rs 1.7 lakh crore debt was in mild stress, another Rs 1.7 lakh crore in moderate stress and Rs 1.1 lakh in severe stress categories, the report added.
Despite the fact that corporate balance sheets have been systematically de-leveraged over FY15-19, and there has been large-scale stressed asset accrual from the corporate sector, a residual corporate debt of Rs 4.6 lakh crore is still likely to be under pressure.
Industries like real estate, travel & leisure, automobile parts, telecom and construction comprise 54 per cent of the stressed debt. The corporate segment is likely to contribute around Rs 2.75 lakh crore to overall coronavirus-related stress for the banking sector, the report added.
A more detailed break-up revealed that of the total residual debt of Rs 8.3 lakh crore, approximately 55 per cent was from companies with debt between Rs 1000 and 10,000 crore and around 26 per cent was from companies with debt under Rs 1000 crore. Moreover, of the stressed debt of Rs 4.6 lakh crore, nearly 60 per cent is contributed from companies with debt between Rs 1000 to 10,000 crore, the study said.