Cos owe Rs 10,000 cr to NBFCs

CALCUTTA, June 13: Some 240 companies owe, in all, more than Rs 10,000 crore to several non-banking financial companies (NBFCs). A recent list of defaulting companies circulated by the Association of Mutual Bankers in India (Ambi) reads like a corporate dossier.

Among the more well-known names are: Apollo Tyres, Asian Alloys, MS Shoes, Agritech Hatcheries and Agritech Hatcheries & Foods Ltd, the Business India group, Sanjay Dalmia’s GTC Industries, Jindal Steel Products, the Kedia group of companies, KHSL Industries Ltd (formerly Khaitan Hostombe Spinels), Mideast India, Modi group companies, Moolchand Exports and Moolchand Finance of the Moolchand group, Parasrampuria International and Parasrampuria Synthetics, Patheja Forgings, Pittie Cement & Industries, Rajasthan Breweries, Rajinder Pipes, Rajinder Steels and Real Value Appliances Ltd.The list also includes individuals from certain companies who have availed themselves of loans. Among them are PB Gadgil of Gadgil Western, Sadhna Sachdeva of MS Shoes and Prakash Mathur of Ganesh Roadways.

Sources said that this was only the tip of the iceberg as the list names defaulters to only major non-banking finance companies. There are other finance companies whose assets have gone bad. These are not recorded as small NBFCs are usually secretive about their financial positions.

The Rajarathinam group owes around Rs 50 crore in advances taken from a major non-banking finance company. The Business India group owes a similiar amount to its creditors, some of whom have already taken it to court.Finance companies usually operate on slim margins of around one to two per cent, mainly because of the high rates of interest which they offer on their deposits. Most of them borrow in the call money market to plug the resource gap in the short term, which results in their interest costs shooting up.