India’s bad loans situation has gone from bad to worse with each passing year, and the country presently has world’s fifth largest non-performing asset. The situation is so worrying that even International Monetary Fund last month expressed concern, saying India’s key banks appear resilient, but the system is subject to considerable vulnerabilities.
To deal with India’s 9.5 lakh crore, both the RBI and the government has taken several measures in the last one year; one of the most important steps being taking companies with big loan defaults to National Company Law Tribunal (NCLT) for insolvency.
Tightening the noose, the RBI released two lists of big defaulters, comprising 25% and 40% of total bad loans. The first list contained 12 accounts which were meant for immediate proceedings and the second list with about 28 accounts were given time until December 13 to restructure their debt.
Here’s the list of big companies with big loan defaults facing the NCLT gauntlet:
Videocon: Once a household brand Videocon is reeling currently under a pile of over Rs 29,000 crore loan. The State Bank of India on Monday took Videocon to the NCLT for a loan default of Rs 3,900 crore. The decision of NCLT is pending in this case.
Jaiprakash Associates: On failing to deliver ‘Wish Town’, its subsidiary Jaypee Infratech is already in legal soup, which also saved it from going into insolvency; but the RBI is keen on taking Jaiprakash Associates with Rs 22,000 crore loan default to the insolvency court. The Central Bank has moved the Supreme Court to seek its permission to initiate the process.
IVRCL Ltd: Hyderabad-based infrastructure player IVRCL Ltd has a loan default of Rs 10,107 crore.
Ruchi Soya: Ruchi Soya has a total loan default of Rs 4,513.79 crore. Lenders initiated insolvency proceedings against it before the December 31 deadline. IDBI Bank has declared the company a wilful defaulter.
Uttam Galva Steels: Uttam Galva Steels Ltd: Uttam Galva Steels Ltd is one of the largest manufacturers of cold rolled steel. It has a loan default of Rs 4,150 crore.
Soma Enterprises: Soma Enterprises has a loan default of Rs 1,895 crore.
Asian Colour Coated Ispat: Asian Colour Coated Ispat has a loan default of Rs 3,019 crore.
Uttam Galva Steel: Uttam Galva Steel has a loan default of Rs 110.4 crore.
Ballarpur Industries Ltd (BILT): BILT has an estimated consolidated debt of over Rs 6,000 crore.
Jai Balaji, Jayaswal Neco, Soma Enterprise, Orchid Pharma, Uttam Galva Metaliks, and Anrak Aluminium are some other companies that will be taken to the NCLT for insolvency. Earlier, Bhushan Steel Ltd with Rs 44,478 crore, Lanco Infratech Ltd with Rs 44,364 crore and 10 others were sent to the NCLT, of which the insolvency court admitted cases against 11 of them. Here is the list of 12 companies constituting 25% of total NPAs.