INSUBCONTINENT EXCLUSIVE:
By Andy MukherjeeThe finance industry is in turmoil
Tax collections have hit stall speed
The two old firms that are still standing amid intense price competition from newcomer Reliance Jio Infocomm Ltd
will bear the brunt of the recently court-approved demand.
Among them, Vodafone Idea Ltd
has a one-year default probability of 7.5%, according to a Bloomberg risk model
That puts its $14 billion debt within shouting distance of distressed
If Vodafone Idea goes to banks asking to recast its borrowings, something that the company has so far denied doing, lenders will receive a
Some states want to renege on existing deals, even as they sit on $8.5 billion of overdue payments.
As the government starts panicking about
revenue, it will try to get funds wherever it can, such as by arm-twisting a telecom industry that has no capacity to pay
All that banks can do about defaulting financiers such as Dewan Housing Finance Corp
and Altico Capital India Ltd
is to pretend to restructure their borrowings and kick inevitable losses down the road.
Finally, after more than two years of tweaks and
failing to generate the kind of fiscal resources that were hoped
The more the government tries to plug its shortfall, the more onerous for large firms to deal with smaller suppliers.
The GST came a few
The complicated levy has been an additional source of pain at a time of demand funk in nearly every industry
No surprise that the ratio of nonperforming loans for midsize Indian firms has shot up from 13% at the end of 2015 to 17.5%, compounding the
The twin challenges will have to be faced together
