Reliance Capital has as soon as once more didn’t make curiosity fee for non-convertible debentures (NCDs) due on February 21. Though the quantum of default couldn’t be ascertained, it will likely be a minimum of the forty ninth default in a row for Reliance Capital.
The corporate had disclosed throughout its December quarter (Q3FY21) earnings that it had listed NCDs value Rs 14,827 crore. Because the asset cowl of the excellent debentures had fallen under 100%, the corporate was in dialogue with bidders for asset monetisation. Reliance Capital had earlier invited expressions of curiosity (EoIs) for its key belongings. Nonetheless, no last deal has been reached up to now with the decision candidates.
The corporate has additionally missed 11 instalments of HDFC and Axis Financial institution from January 31, 2020 to January 30 this yr. The corporate has been lacking month-to-month curiosity fee of `4.77 crore to HDFC and `71 lakh to Axis Financial institution. The non-bank lender had taken a mortgage of `524 crore from HDFC and `101 crore from Axis Financial institution. Whereas HDFC charged rates of interest between 10.6% and 13%, Axis Financial institution had prolonged the mortgage to Reliance Capital at 8.25% each year. Reliance Capital’s complete excellent from banks and monetary establishments stood at `706 crore. Nonetheless, the full monetary indebtedness of Reliance Capital remained at Rs 20,511 crore as on January 31, 2021.
The web lack of Reliance Capital has widened to Rs 4,018 crore within the December quarter (Q3FY21), in opposition to a web lack of Rs 135 crore in the identical interval a yr in the past. The bills of the corporate virtually doubled to Rs 8,662 crore, in comparison with Rs 4,731 crore final yr. The curiosity earnings of the corporate halved to Rs 684 crore, in comparison with Rs 1,400 crore in December 2019.
Reliance Capital has cautioned buyers that there could be a delay in debt servicing. “It’s anticipated that the debt servicing of the corporate in relation to the accelerated quantities and in any other case might be delayed,” Reliance Capital stated. The corporate has cited authorized hurdles for not with the ability to proceed with its asset monetisation, which, in flip, resulted in a delay within the debt servicing.
In September 2019, Care Scores had downgraded Reliance Capital’s Rs 17,000-crore debt to default grade ‘D’. The company attributed its motion to the corporate delaying by a day its fee on a number of non-convertible debentures (NCDs) it had issued.