The Shapoorji default of 100 cr. does not really mean that the SP group doesn't have 100 cr., IMHO.
It's a signal that they want to negotiate. It's basically saying, I'm in default, now let's restructure the loans.
It's a signal that they want to negotiate. It's basically saying, I'm in default, now let's restructure the loans.
The important point is that they defaulted on Commercial Paper in the money market, not on a loan. A loan default could have been "hidden" within the banking system, because banks get 3 months to negotiate before a loan turns NPA.
They chose to tell the world instead.
They chose to tell the world instead.
Also, there's a little bit that Franklin funds own a good portion of the group bonds, and renegotiating now might be an interesting proposition since holders of those funds might be expecting a haircut anyhow.
But this is going to be a larger trend, in all probability, with more stressed players signalling quickly that they need to restructure. And some of it will be through planned defaults.
Remember also that because of a RBI/SEBI notification, rating agencies won't downgrade to D ratings if the situation was made this bad ONLY because of Covid.
No fear of a downgrade. A one time restructuring is open. This is going to be a crazy time.
No fear of a downgrade. A one time restructuring is open. This is going to be a crazy time.
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