Over half of the top 500 companies listed on the National Stock Exchange could find themselves strapped for cash to even make routine payments in the aftermath of the COVID-19 induced lockdown.
Some strong companies such as Reliance Industries ( ₹1,53,719 crore of cash and cash equivalents as of December 31, 2019), Inter globe Aviation (₹20,068 crore) and Bajaj Auto ( ₹17,407 crore), to name just three, will obviously ride through the crisis comfortably. But a majority of the firms could find themselves in liquidity trouble, unless if promoters step in with equity or banks lend to them.
As per data analysed by Acuite Ratings & Research Ltd. exclusively for The Hindu, out of 467 of the top 500 NSE-listed companies, excluding banks, 257, or 55% of them, have less than 100% cushion for bearing fixed and debt-servicing costs.
In other words, they will need additional funds through debt or equity to maintain their operations or have to cut back on their existing costs.
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