Construction and steel sectors to benefit more from rejig, says CRISIL

Over 5,600 of the 8,500 companies rated by CRISIL across sectors will be eligible for the one-time corporate debt restructuring based on parameters proposed by the Reserve Bank of Indiaappointed (Rbi-appointed) expert committee, headed by former ICICI Bank chairman K V Kamath, the rating agency said.

The study (of over 8,500 entities) indicated that companies in sectors like construction, steel, and pharma stand to benefit more. Three out of four rated ones in the resilient sectors will qualify for restructuring.

In the less-resilient sectors like auto, gems and jewellery, hospitality, and real estate, opportunities could be lower as they could take longer to recover. Here, only one in three companies could be eligible for restructuring.

Restructuring will also be available to a large number of companies that opted for the moratorium, CRISIL said.

The rating agency said it studied the firms after sorting them by rating, sector and moratorium availed. Nearly two-thirds would be eligible for one-time debt restructuring. The assessment is based on financial projections and excludes small and medium enterprises (SMES) and financial sector companies, CRISIL said.

Subodh Rai, senior director of CRISIL Ratings, said: “Three out of four investment-grade companies (rated CRISIL BBB- or higher) and one out of two in the BB rating category qualify for restructuring of bank loans.”

Rahul Guha, director of CRISIL Ratings, said the situation is evolving. The actual number of eligible companies could increase in case of quick turnaround of the economy.