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Strategic Debt Conversion may Help the Power Utilities in India to Evolve Out of the Financial Crunch Zone

News:

IDFC has set the ball rolling in the transformation of how Indian banks treat defaulters as it threw out the promoters of SV Power and brought in a new equity investor to revive the foundering utility following missed payment schedules.
Source: ET

SNP Insights:

IDFC throwing out the promoters of SV Powers and brought in a new equity investors to revive the borrowing company under RBI new norms of Strategic Debt Conversion (SDR) is likely to improve the non performing asset and restructured loans which account for 10% of the total loan assets of the Indian banks. This may also help in revival of the borrower company by improving the know-how through the change of top management under the new norm of SDR.
Source: SNP Infra Research