India

Embattled Indian tycoon Anil Ambani pledged to reduce debt at his infrastructure-to-finance conglomerate to a “bare” minimum, seeking to bolster investor confidence in an empire that’s grappling with high leverage and delayed asset sales, Bloomberg News reported. The Reliance Anil Dhirubhai Ambani Group has repaid 350 billion rupees ($5 billion) in the past 14 months, an amount entirely raised through disposal of assets, Ambani, 60, told reporters in a rare conference call Tuesday without elaborating.

The fate of Jet Airways is hanging in the balance and much rests on how today pans out. On one hand, reports suggest that the grounded carrier's lenders are expected to respond to the bailout conditions set by its strategic partner Etihad and the Hinduja Group this week, perhaps as early as Monday, and on the other hand Jet Airways is at risk of landing at bankruptcy court, Business Today reported. Two of the airline's operational creditors, Shaman Wheels and Gaggar Enterprises, have approached the National Company Law Tribunal (NCLT) for the recovery of their dues.

Indian film and entertainment group Eros International has taken steps to resolve delays in loan payments, Chief Executive Kishore Lulla said, as he also dismissed a short seller’s allegations of accounting irregularities at the group, Reuters reported. The company’s New York-listed shares plunged more than 55% last week, and those of its Indian subsidiary Eros International Media Ltd sunk more than 30%, after an Indian rating agency categorized debt of Eros’s Indian subsidiary at “default” levels due to delays in loan payments.

Even as investors bet on a resurgence for medium-sized Indian companies after Prime Minister Narendra Modi’s return to power, one of the country’s top mid-cap fund manager advises caution, Bloomberg News reported. This group of stocks won’t get an immediate lift from Modi’s victory as it isn’t immune to the slowdown in the economy and the lingering shadow-bank crisis, said Vinit Sambre, who oversees $1.6 billion in two mid- and small-cap funds at DSP Investment Managers in Mumbai.

Eros International Media Ltd. plunged Friday, bringing its two-day slump to 32% after Care Ratings downgraded the company’s creditworthiness, citing delays or likely default in servicing of bank loans, Bloomberg News reported. The filmmaker’s Indian-listed stock suffered a rapid erosion in market value this week after Care cut the long-term bank facilities rating 10 notches to D, or default from BBB-, a move that brought back memories of the steep downgrades last year at Infrastructure Leasing & Financial Services by Moody’s Corp.’s local unit.

The Reserve Bank of India diluted its guidelines on stressed assets and has now mandated banks to undertake a review of a borrower’s accounts within 30 days of default, according to a circular issued on Friday, Reuters reported. A circular issued in February last year required banks to initiate a resolution process as soon as a default took place. Banks unable to agree upon a resolution plan with the defaulter within 180 days were mandated to force them into a time-bound insolvency process.

Shares of mortgage lender Dewan Housing Finance Corporation Ltd (DHFL) fell as much as 18% on Thursday, their biggest intraday fall since February, a day after two leading ratings agencies downgraded the company to their lowest on the lender missing payments on bonds due this week, Reuters reported. ICRA cut its rating on the company’s paper to D from A4, while Crisil downgraded to ‘CRISIL D’ from ‘CRISIL A4+’, implying that the company was in default or expected to be in default soon.

Two major Indian lenders slumped in the bond market after their credit ratings were cut to junk by Fitch Ratings, in the latest sign of concerns about the nation’s banks that are battling the world’s worst bad-loan ratio, Bloomberg News reported. Fitch lowered its long-term issuer default ratings on ICICI Bank Ltd. and Axis Bank Ltd. to BB+ from BBB- late on Monday. Certain dollar bonds from ICICI slumped the most in more than a year, while ones from Axis Bank fell the most in over six months on Tuesday.

Prepackaged insolvency resolution, allowing creditors and shareholders with a pre-negotiated corporate reorganisation plan to approach NCLT, may be taken forward by the government as a key route in the time to come, Business Standard reported. Sources said "this will aid the existing framework and cut costs and the time taken during the resolution process. This is part of a consultation process under the law panel of the IBC identifying issues impacting its efficacy and make recommendations.

India’s shadow banks are being forced to go overseas more for money as local lenders balk at extending funds, flagging strains in a key industry for an economy that’s already sputtering, Bloomberg News reported. The country’s non-banking financial companies have raised more than $2 billion of overseas bonds and loans in 2019, a record compared with the same period in previous years, according to data compiled by Bloomberg. The lifeline is welcome, even as it underscores a scramble after a string of defaults by peer IL&FS Group last year made investors wary.