RBI on Tuesday said that there has been an improvement in India Inc’s leverage in 2015-16 and the overall risks in the corporate sector have also moderated over the fiscal.
RBI on Tuesday said that there has been an improvement in India Inc’s leverage in 2015-16 and the overall risks in the corporate sector have also moderated over the fiscal.
“The proportion of ‘leveraged’ companies declined sharply from 19 per cent in March 2015 to 14 per cent in March 2016,” RBI said in its Fin-ancial Stability Report.
Going by the share in total debt as well, their share came down to 20.6 per cent from 33.8 per cent, it said.
A leveraged company is one which has negative net-worth or a debt to equity ratio exceeding two. The report said 15 per cent of the companies were ‘weak’ at the end of March 2016, which is down from the 17.8 per cent level in March 2015.
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