India

The head of a credit fund under Indian billionaire Uday Kotak’s financial group says the government’s pledge of capital for beleaguered state banks could make it easier for distressed funds to buy loans, Bloomberg News reported. The Indian government said last week that it will inject 2.11 trillion rupees ($32 billion) of capital into state-controlled lenders over two years, as it seeks to revive growth in Asia’s third-largest economy.

The shine has come off India’s growth. Most countries would crave a growth rate as high as 5.7 per cent, but this is a setback for a country that recently boasted of growth rates higher than China’s. The slowdown exposes underlying fragilities that no triumphalist talk could conceal. What lessons the government takes from this, and how it responds, will determine the contours of the economy and its growth prospects for a long time, the Financial Times reported. The call for reforms has not gone unheeded by the government of Narendra Modi.

Sagging economic growth in India is complicating efforts to clean up a mountain of bad debt at the nation’s banks, Bloomberg News reported. Loans worth 1.7 trillion rupees ($26 billion) have been withdrawn in total since the 2001 inception of the Corporate Debt Restructuring Mechanism through to the end of August, according to the latest data from the agency that brokers agreements between borrowers and lenders. That’s a net increase of 446 billion rupees from the end of 2016, and already exceeds the 415 billion rupees of loans that couldn’t be revamped last year, the data show.

Every flailing effort by India's banks to catch their breath is pulling them deeper into a morass of bad loans, Bloomberg News reported. The latest crisis has been sparked by the failure of billionaire Anil Ambani's Reliance Communications Ltd. to merge its wireless operations with Malaysian tycoon T. Ananda Krishnan's Aircel Ltd. That combination would have reduced RCom's $7 billion debt by $2.1 billion, with a separate deal to sell 51 percent of its tower unit to Canada's Brookfield Infrastructure Group contributing a further $1.7 billion toward deleveraging.

Embattled Indian telecom company Reliance Communications Ltd faced another setback on Sunday after a deal to merge its wireless business with smaller rival Aircel was called off, raising fresh doubts around its debt restructuring plans, the International New York Times reported on a Reuters story. The company, widely known as RCom, said it had agreed with Aircel to call off the proposed deal due to regulatory delays and legal uncertainties.

India’s top iron ore miner NMDC Ltd. is looking to sell a stake of at least 49 percent in its Chhattisgarh steel plant, as it prepares to begin production at the 3-million-ton facility in three to six months, according to a company official. The state-run miner is seeking a partner for its first steel venture, which has been eight years in development, to infuse working capital and provide steel-making expertise, the official said Monday, declining to be named in line with company policy, Bloomberg News reported. NMDC has appointed an adviser to help find an investor, the official said.

India’s Finance Minister Arun Jaitley goaded companies to boost investments as businesses bruised by a slowing economy and falling returns defer spending, Bloomberg News reported. Speaking at the Bloomberg India Economic Forum in Mumbai, Jaitley and Amitabh Kant, the chief executive officer at Niti Aayog, the nation’s economic think-tank, called for more private spending from local companies and said the banking system must get healthier to support that investment. Jaitley told companies that there’s “no need to panic,” while R.

In late June, one of India’s top wind power equipment makers, Inox Wind Ltd, was dragged into insolvency courts by a logistics handler over unpaid dues of $88,000, Reuters reported. Two weeks on, the matter was settled, with dues paid off. The case illustrates how small creditors and vendors, previously at the mercy of large debtors, are now using India’s new bankruptcy code as a pressure ploy to secure payment of dues that would earlier have been all but impossible to recover.

Shares in Reliance Communications fell as much as 2.3 percent in early trading on Thursday, a day after the Indian arm of Ericsson filed a petition seeking to drag the debt-laden telecom firm into insolvency due to unpaid dues, Reuters reported. The Swedish telecoms equipment maker, which signed a seven-year deal in 2014 to operate and manage Reliance Communications’ nationwide network, is seeking a total of 11.55 billion rupees ($180 million) from the company and two of its subsidiaries. Reliance Communications, widely known as RCom, reported its third quarterly loss in a row last month.

Ericsson's Indian subsidiary has filed insolvency petitions against Reliance Communications and two of its companies to recover unpaid dues, the Indian mobile operator said in a stock exchange filing on Wednesday, the International New York Times reported on a Reuters story. The Swedish telecoms equipment maker, which signed a seven-year deal in 2014 to operate and manage Reliance Communications' nationwide network, is seeking a total of 11.55 billion rupees ($180 million) from the three companies, the filing said.