Contact Your Financial Adviser Money Making MC
22 June 2017
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Corporate Debt(The Total Investment &
Insurance Solutions)
The recent
corporate results for about 3,000 listed entities suggest the increase in
outstanding loan funds at a compounded annual growth rate (CAGR) of about 8% or
so during FY2017 over FY2015. However, there is a contraction in loan funds
outstanding for top corporates in FY2017 compared with previous year, either
through repayment, equity conversion or restructuring of debt, says a research
report.
In the note,
State Bank of India (SBI) says, "The outstanding loan funds as on FY2015
stood at Rs22.8 lakh crore increasing to Rs26.5 lakh crore in FY2017. The loan
funds outstanding stood at Rs24.2 lakh crore in FY2016. However, we also
observe that some top notch corporates reported contraction in loan funds
outstanding in FY2017 over FY2016. About 1,000 entities in aggregate, excluding
banks and finance companies, reported decline in loan funds to the extent of
Rs1 lakh crore. The debt contraction could either be through repayment, equity
conversion or restructuring of debt. The top ten entities, saw decline of about
Rs33,000 crore." The Total
Investment & Insurance Solutions
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Corporate Debt(The Total Investment &
Insurance Solutions)
According to
the report, some of the best known companies that have lowered loan funds
include GAIL (-48%), Piramal Enterprises (-37%), National Fertilizers (-37%),
L&T (-24%) Hindalco (-20%) and Jet Airways (-22%). Cumulatively, the amount
is about Rs20,000 crore. It says, "This could either be perceived as lower
debt utilisation levels or prepayment through internal accruals or through
asset sale. The reasons could be many, including QIP or private equity
participation." The Total
Investment & Insurance Solutions
Talking about financial performance for FY16-17, SBI says, "We find EBIDTA (midline) exhibiting a double digit growth in most of the top 10 sectors, depicting all round growth in top-line, midline and bottom-line. A normal monsoon can see agrochemicals sector bloom. Capital Goods (Electrical Equipment) topped growth in EBIDTA and PAT margins. Agrochemicals and Capital Goods (Electrical Equipment) are the sectors one may monitor for growth in the coming days." The Total Investment & Insurance Solutions
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| Corporate Debt(The Total Investment & Insurance Solutions) |
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