Indian firms have announced more than Rs.1 trillion of stressed asset sales since 2013 as debt-laden corporate entities seek to deleverage their balance sheets, says a report by Kotak Institutional Equities Research. This includes sales that have been completed as well as transactions that have been announced but are awaiting closure. In just five months of calendar year 2016, almost Rs.41,000 crore of stressed asset sales have been announced—higher than in any of the previous three years, the data shows.
The assets sales by around 18 Indian conglomerates came in the face of pressure from their creditors, who are themselves being pushed by the Reserve Bank of India to clean up their books of bad loans. The banking regulator has set a March 2017 deadline for commercial banks to clean up their books.