The firms that are likely to be hit due to the nationwide 21-day lockdown include Tata Steel, Adani Power and Steel Authority of India Limited
Nearly half of the borrowings by non-financial companies, totalling approximately Rs 15 trillion, is in danger due to the coronavirus pandemic-induced lockdown in India. This is likely to impact corporate finances adversely in the first quarter of the financial year.Business Standard reports that the coffers of more than 200 non-financial listed companies will see drastic deterioration in the coming quarter of 2020-21 (FY21), which in turn would make it difficult for them to repay their debt.
The firms that are likely to be adversely hit due to the nationwide 21-day lockdown to curb the spread of the deadly novel coronavirus include Tata Steel, Adani Power and Steel Authority of India Limited, among others. Most of these companies were already suffering from a high debt-to-equity ratio, high debt-to-Ebitda ratio, or low-interest coverage ratio negative. Some were even hit by negative net worth and amortisation in the first half of the FY 2019-20.
The 201-odd companies together owed a debt of Rs 14.9 trillion at the end of September 2019. This figure would rise to Rs 17.1 trillion if the figures for the 2018-19 financial year is also considered. Against this, all the 787 non-financial companies together owed Rs 24.2 trillion on September 30, 2019, and Rs 30.7 trillion on March 30, 2019.
However, the three-month interest moratorium granted by the Reserve Bank of India will allow the cash-strapped companies to stall interest payment of Rs 35,000 crore for the time being and provide them with the much-needed financial breather.
Frequently Asked Questions
A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.
There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.
Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.