Aggravate financing challenges!
Elevated Financing Risks for Corporates The cost of financing could remain elevated Expected a gross borrowing of INR6.47tn in FY19 According to Arindam Som, Analyst & Soumyajit Niyogi, Associate Director of IndRa, a sustained tightening of monetary condition coupled with challenging external environment is likely to aggravate financing challenges for Indian corporates against the backdrop of not-so-benign domestic credit market, says India Ratings and Research (Ind-Ra). The agency previously highlighted that corporate credit spreads are likely to widen owing to the pressure on capital account in an environment of twin deficit, i.e. combined fiscal and current account deficit. An analysis of the top 500 debt-heavy corporates indicates that a gross borrowing of INR6.47 trillion (including refinancing) is expected in FY19. Amid challenges over sustenance of emerging markets’ foreign portfolio flows, a visible weakness in net domestic household savings rate, ...