Top 1,000 Indian Companies Borrowed Rs. 1 Trillion Less In FY17

Mumbai: The record low bank credit growth of 5.1 per cent in FY17 was led by the top 1,000 listed corporates which saw their net loan outstanding decline by a whopping Rs. 1 trillion in the reporting year, said a report.

One-third of this massive contraction was led by just 10 companies, which cumulatively availed of Rs. 33,571 crore less in the year over the previous year, according to the report by SBI Research.

According to SBI chief economic adviser Soumya Kanti Ghosh, who penned the report, this could either be perceived as lower debt utilisation levels or prepayment through internal accruals or through asset sale. Other reasons could be QIP or private equity participation.

The RBI data showed that bank credit inched up by a tad 5.1 per cent in the year to March 2017, which was the lowest since 1951 when it had grown by a paltry 1.8 per cent which could be attributed rise in bond issuance and cheaper non-bank fund sources coupled with overall credit aversion in the economy as well as non-investment by the private sector in capacity expansion.

However, taken as a whole, results of about 3,000 listed entities for FY17, there was an 8 per cent increase on a CAGR basis in loan funds outstanding over FY15.

The outstanding loan funds as of FY15 stood at Rs. 22.8 trillion, which increased to Rs. 26.5 trillion in FY17. This was Rs. 24.2 trillion in FY16.

However, many top notch corporates reported contraction in loan funds outstanding in FY17 over FY16.

Top 1,000 Indian Companies Borrowed Rs 1 Trillion Less In FY17: Report

“About 1,000 entities in aggregate (excluding banks & finance companies) reported decline in loan funds to the extent of Rs. 1 trillion crore,” said Ghosh.

Debt contraction can either be through repayments, equity conversion or restructuring he says adding “top ten entities saw a decline of about Rs. 33,000 crore.”

Some of the best known companies that have lowered loan funds include Gail India (-48 per cent), Piramal Enterprises (-37 per cent), National Fertilizers (-37 per cent), L&T (-24 per cent) Hindalco (-20 per cent) and Jet Airways (-22 per cent). Cumulatively, these companies alone borrowed Rs. 20,000 crore less, said the report.

From a sectoral point of view, this came in amidst a double digit annual growth in EBIDTA by most of the top 10 sectors depicting all round growth in top-line, midline and bottom-line.

About 1,000 entities (excluding banks & finance) saw a steep Rs. 1,00,710 crore decline in loan funds, while the top ten entities’ loan funds decline by Rs. 33,571 crore which is 33 percent of the aggregate reduction in loan funds for all.

Hinting at a continuation of the same deleveraging trend in the times to come, the report points to the Tata Group is identifying non-core businesses for divestment.

The group is in the process of selling drug discovery services company Advinus Therapeutics. Its fertiliser business may also be up for sale along with Tata Ceramics, Tata Business Support Services, Tata Asset Management and Tata AutoComp Systems.

Other reasons for lower lonn demand may come from operational and financial restructuring, repayments, equity conversion by lenders etc, said the report.


The Easiest Way to Be Less Stressed at Work

Commuting to work by bike can help you start your day with less stress, new research suggests, and the benefit may have lasting effects through the afternoon and evening.

The three authors of the new study, which was published in the International Journal of Workplace Health Management, all bike to work and wanted to see if they could find empirical evidence for what they personally knew to be true: that a morning bike ride can boost people’s moods and reduce their stress.

“We were discussing amongst ourselves the good feeling we’d get every time we rode our bikes to work,” says Stéphane Brutus, professor of motivation and employee performance at Concordia University in Canada. “Anecdotally, we felt like we were a step ahead, first thing in the morning, of the rest of our coworkers who insisted on taking cars or public transportation.”

The researchers surveyed 123 employees at an information technology company in Montreal, considered one of the most bike-friendly cities in the world. Everyone filled out a questionnaire just after the workday began and rated their mood at the start of the day, their commute-related stress and their subjective vitality—a measure of wellbeing, physical health and energy levels. They also indicated what type of transportation they had taken that day.

bike work commute

Overall, 54 had arrived to work in cars, 42 had taken public transportation and 25 had ridden bicycles. Two had ridden motorcycles, but they were excluded from analysis due to a small sample size.

The researchers controlled for vitality, since they assumed that healthy, active people would be more likely to bike to work and also to report better moods and less stress. Even with this adjustment, though, they found a significant difference in stress levels between the three commuter groups. On a five-point scale, with 5 being the most stress, averages for each group were 2.54 for car drivers, 2.25 for public-transportation users and 2.18 for cyclists.

The finding suggests that cycling can help commuters start their day on the right foot, says Brutus. That’s important, because previous research has shown that people’s early-morning stress level can be a strong predictor of how the rest of their day turns out. Other research backs up additional benefits of a healthy commute. A large 2017 study showed that people who walked or biked to work were less likely to die during the five-year study period than those who took public transit—even if they just biked part of the way.

In this study, however, the researchers did not find major differences in mood between the three groups. “The data was pointing in the right direction, but the results weren’t significant,” says Brutus. He thinks this was because of the relatively small number of cyclists in the study, compared to the other groups. “With more statistical power, it is my guess that we would have found an effect.”

Brutus points out that the study was not able to show a cause-and-effect relationship between biking and lower stress levels and that stress tends to be more consistent, day-to-day, than mood. Even though they controlled for vitality, he says, other factors could have still played a role in the results.

“People decide to drive to work or cycle to work for all different reasons, including their physical shape, how they perceive risks and how they perceive life,” he says. “If you choose to drive a car, for example, you may be the type of person who gets stressed more easily and who can’t afford to bike to work because you need to get to work earlier.”

Cycling to work isn’t practical or possible for everyone. But for those who do have the option, Brutus recommends giving it a try and seeing if it has an effect on their mood or stress levels throughout the day.

“Our relationship with our cars is so ingrained that we don’t even question all the stress and frustration that owning them and driving them can cause,” he says. “We want people to realize there might be a better way.”