Monday, 24 January, 2022
HomeEconomyDefault rating for Anil Ambani’s Reliance Capital reignites credit scare

Default rating for Anil Ambani’s Reliance Capital reignites credit scare

Care Ratings cut Reliance Capital’s bonds by 8 notches to D from BB, citing delay in coupon payments on several of lender’s non-convertible debentures.

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Mumbai: Reliance Capital Ltd.’s downgrade to default grade at Care Ratings Ltd. places the debt of embattled tycoon Anil Ambani’s conglomerate at risk, reigniting India’s credit scare.

Mumbai-based Care cut Reliance Capital’s bonds by eight notches to D from BB, citing a delay in coupon payments on several of the lender’s non-convertible debentures, the rating company said in a Sept. 20 statement. That raises the default risk on the debt of the Reliance ADAG Group, which has ballooned to about 939 billion rupees ($13 billion) at four of its biggest units.

The downgrade “will precipitate a chain sequence of events that will gravely harm the interests of millions of retail and institutional investors having direct or indirect exposure to the securities of the company,” Reliance Capital said Saturday in an exchange filing.

The default rating is set to exacerbate a yearlong credit crunch among India’s shadow lenders, which started with the collapse of IL&FS Group last year. Mumbai-based Reliance Capital has been trying to sell off assets to raise funds while its shares tumbled more than 90% over the past year amid the cash squeeze.

The delay in coupon payments was caused by a “technical glitch in bank servers,” Reliance Capital said in its statement, adding that the rating company did not give the lender the opportunity to provide comments on the downgrade. Payment went through on the next working day after the delay, the shadow lender said. -Bloomberg


Also read: Anil Ambani’s GCX Ltd files for bankruptcy after defaulting on payment on $350 million bonds


 

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4 COMMENTS

  1. As messaged by Ashok, i suggest the same, sell all the properties except one flat to stay, repay all the debts, search for a good job as he is educated, no lavish spending, show bazi in future, enjoy simple meals, have peaceful sound sleep at nights. Once debts cleared, life will be very easy as an ordinary citizen. I am your well wisher Mr. Anil.

  2. Business is not run on EMOTIONS. If Anil Ambani is in business he should perform well. Show results and profit. There is NO EXCUSE FOR NON-PERFORMANCE.
    He should leave his LUXURIOUS LIFESTYLE AND PAY THE DEBT.

  3. He is a very good in businesses… he done exceptionally great work with his farher … at personal front he is very emotional.
    Kind hearted and honest… thats why he is facing all this. He got himself in a trap.. hopefully and wishing him and his team all the very best.. its in a great interest of his employes .. lenders and all having concerns with the group and also for indian econmy…
    To come out… all the very best ..to him…and all businessmen

  4. Gentleman should sell his offsets to elder brother and exit the world of business completely. Everything he touches turns to ashes.

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