Must READ !!
Looking glasses are often cruel, they show your true visage; warts, wrinkles and other blemishes that can be photo shopped or air brushed in a picture.
Looking glasses tell the real story, making it the real moment of truth.
I am gripped by despair because I have just seen the total size of debt that Indian companies have on their balance sheets.
There is a sea of red, making corporate India look slothful and bloated.
At one level it is scary because these companies represent the finest knights in shining armour at the Indian equivalent of Arthur’s round table.
The Bombay Stock Exchange’s data for top companies in India by debt makes for very disappointing reading.
While all the banks hemmed in by power sector debt and bad loans from private sector are trying to keep their heads above water, there are several private sector entities which are surviving on largesse of the banking system.
Two recent cases in point are the beleaguered Kingfisher Airlines and Deccan Chronicle Holdings.
Both have pretty much gone belly up, and the poor banks are carrying the can in the process.
Of the top 25 corporations by debt on their books, the first 19 are pure play public sector banks led by State Bank of India (Rs 1,170,652 crore which constitutes 87.06 % of its total liability), Punjab National Bank (Rs 416,852 crore or 90.98%), Bank of Baroda (Rs 408,444 crore or 91.31%), private sector biggie ICICI (Rs 395,664 crore or 83.54%) and Bank of India (Rs 350,330 crore or 91.10%).
Jeepers creepers was my instantaneous reaction after seeing the list. HDFC Bank comes in at number 7 with Rs 270,552 crore.
At number 20, Power Finance Corporation is the first non-banking institution obviously plagued with rising power sector delinquencies.
Ditto for Rural Electrification Corporation at number 27 with Rs 79,053 crore of debt.
And so the bloodbath continues. The first corporation – non banking or financial institution – is very clearly Indian Oil Corporation. >> Read More