For some time, economists and corporate analysts have talked about India's twin balance sheet problem. On the one hand, some of the country's biggest corporate names are struggling under a mountain of debt, which is putting their businesses at risk. On the other hand, most of the public sector banks - and a few private sector ones as well - are trying to deal with huge bad loans in their books.
Our cover story this issue looks at one of India's prominent business houses struggling to retain control of its empire as lenders clamour for their pound of flesh. The Essar Group has not been short of ambition - over the years, it has got into steel, oil refining, telecom, power, and half a dozen other sectors with companies in India and abroad.
At the same time, the Ruias, who run Essar, have been both short of luck and short of foresight. Though they built an enormous business empire they have had a troubled run. Their first big project, a mega steel plant, earned the dubious distinction of being the first Indian company that defaulted on its international debt obligations and had to ask for a bailout. Its ambitious refinery project in Gujarat took years to complete. Its other projects have often got delayed, and it has had to repeatedly ask bankers for debt restructuring in steel, power and refining. That has not stopped it from taking on more debt.
Now it has reached a stage where upset bankers are forcing it to sell off prime assets to repay the debt. It has had to sell off its Vadinar refinery, which was making huge profits in order to pay off some group debt. Despite that, it may have to give a big chunk of its equity in flagship Essar Steel to bankers in lieu of their taking a haircut.
Can Prashant Ruia, who is currently steering the group, save his empire? We look at the task before him.
Of course, Essar is not the only big group struggling with debt. Anil Ambani's telecom company, Reliance Communications, has asked bankers for a grace period to be able to sell some assets and meet the payment obligations. Reliance Communications' debt servicing costs are now higher than its cash flows, and it has been trying to get a good price for some of its assets - like the tower arm - for some time now. Read about its predicament on page 58.
Finally, as the GST rollout nears, businesses are bracing for humongous disruption. The government has complicated things by having multiple rates, exceptions, cesses and surcharges instead of one flat rate for all goods and services. The rules are also complicated and compliance is a bit of a nightmare. Our GST package looks at how companies and sectors are struggling to deal with the coming GST shock. That starts on page 34.
Also, do not miss the third and final part of our fintech sector report on page 78.