The Rs 1.9-2.1 trillion (Rs 1.9-2.1 lakh crore) debt coming up for refinancing accounts for 27-29 per cent of the banks aggregate net worth as of end FY'13.
"The refinancing requirement may present significant challenges to lenders. Around 24 per cent of the refinancing requirement is attributed to the companies already in distress," the ratings agency said in a note today.
This category includes 20 corporates who have already earned the tag of a defaulter or undergoing distress, it said, adding such companies will not need any refinancing so long as they do not successfully finish their restructuring. They constitute around 5 per cent of the banking system's total networth.
The report also said apart from this, another 26 per cent come from corporates with weaker credit metrics whose asset coverage ratios are low and financial flexibility of the promoter is also limited.
"Under normal market conditions, they should be able to refinance at a high cost or with stringent covenants. However, this group may face significant challenges in refinancing during stressed market conditions," it said.
Twenty-six corporates having an estimated bank exposure of Rs 3,46,600 crore pose negligible risk on the refinance front and should be able to see through even in the tough times, it said, adding, of these, 12 accounting for 27 per cent of the refinancing requirement will be able to refinance debt at a reasonable cost even under stressed market conditions.
The other 22 corporates accounting for 23 per cent of the refinancing amount will also be able to refinance debt but with moderate ease. These companies are referred to as moderate ease of refinancing. However, they may have to bear a high cost, especially under stressed market conditions.
Only 26 of the 100 top corporates have no significant refinancing exposure or are at negligible refinancing risk till FY15. They have moderate levels of debt maturing or are likely to have sufficient free cash flows to service the maturing debt.