Lukewarm response to Restructuring 2.0
Less than 1% of eligible companies opt for Resolution Framework 2.0 of RBI
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Mumbai: With the window for restructuring under the Resolution Framework 2.0 of the Reserve Bank of India (RBI) closing on September 30, there was minimal utilisation of it as anticipated. Less than one per cent of the eligible companies opted to restructure their debt through the facility.
The tepid response 'despite an intense and more virulent second wave of the Covid-19 pandemic' reflects the positive turn in demand outlook, and anxiety about negative stakeholder perception of restructured companies.
To assess the extent of recovery in demand and the resilience of sectors, CRISIL Ratings uses a propriety framework. This tracks resilience across 43 sectors that account for 76 per cent of the total corporate debt rated by the agency.
The exercise indicated that 37 sectors have seen demand rebounding to, or near, the pre-pandemic levels. The impact of the second wave on the cash flows of companies has been relatively short-lived due to localised and less-stringent restrictions compared to the first wave.
