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75% of investment grade companies qualify for one-time debt recast: CRISIL

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Three out of four investment-grade companies and one out of two in the BB rating category qualify for one-time debt restructuring based on the KV Kamath Committee's parameters, according to rating agency CRISIL.

Three out of four investment-grade companies and one out of two in the BB rating category qualify for one-time debt restructuring based on the KV Kamath Committee's parameters, according to rating agency CRISIL.
CRISIL studied its rated portfolio of more than 8,500 companies. It further said only 1 in 3 among B rated companies qualify because of relatively weak debt protection metrics.
The Reserve Bank of India (RBI) had set up a committee under KV Kamath which has recommended financial parameters including aspects related to leverage, liquidity and debt serviceability for the restructuring of bank loans.
According to the CRISIL study, the companies in resilient sectors stand to benefit more.
It revealed that 3 out of 4 rated companies in resilient sectors such as construction, chemicals, pharmaceuticals, iron and steel manufacturing, corporate retail, and consumer durables/FMCG will qualify for restructuring
Further, 1 in 3 rated companies in less-resilient sectors such as auto dealerships, gems and jewellery, hotels, restaurants and tourism, power generation, and real estate may also qualify.
The restructuring will also be available to a large number of companies that opted for the loan moratorium. However, every second company in the CRISIL-rated portfolio that sought moratorium will qualify for restructuring.
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