Barely one percent of eligible companies rated by Crisil have opted for, or are contemplating, the debt restructuring facility offered by the Reserve Bank of India (RBI) under its Resolution Framework 2.0, the rating agency said on August 26 citing a survey.
Crisil surveyed around 4,700 companies for the study, a release said.
"As much as 95 percent of those opting for, or are inclined to seek restructuring, belong to the sub-investment grade rating category. Put another way, investment-grade rated corporates are showing high resilience," Crisil said.
The agency said these are preliminary readings from the survey, and may not be reflective of the inclination among those not rated by CRISIL Ratings. In particular, most of the micro and small enterprises in India are unrated, the rater said.
On May 5, the RBI announced the second round of restructuring for borrowers, including individuals, small businesses, and micro, small and medium enterprises (MSMEs) with aggregate exposure of up to Rs 25 crore provided they had not availed of benefits under any of the earlier restructuring frameworks and were classified as standard accounts as on March 31, 2021.
On June 4, 2021, the RBI raised the aggregate debt threshold to Rs 50 crore from Rs 25 crore.
This increase in threshold led to about two-thirds of the CRISIL-rated mid-sized companies becoming eligible for the restructuring 2.0 scheme, the agency said."The fact that only a handful of companies are exploring the restructuring option could be reflective of a relatively improved business outlook accompanying a pick-up in economic activity in the aftermath of the pandemic’s second wave," the rating agency said.