A large amount of loan given by banks to infrastructure companies were restructured in Apr-Sep 2012 period because of high interest rate, rise in debt levels among these firms, reports suggest.
During this period, loan worth Rs 15,562 crore belonging to infrastructure companies were restructured, data from the corporate debt restructuring (CDR) cell shows. As of end-September, the outstanding infra loans under recast stood at Rs 32,336 crore.
Infrastructure companies are having difficulty in repaying loans because many projects are struck owing to land acquisition and environment clearance issues. Also, order inflows from road sector, which were robust in FY2012, have also slowed down.
According to an analysis by RBI on eight large corporate groups with high exposure to infrastructure sector, between 2007-08 and 2011-12, the interest coverage for these companies has gone down, whereas debt to ebitda and debt to equity ratios have gone up.
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