Reliance Capital Ltd., the parent of two downgraded non-bank lenders of the Anil Ambani group, owes banks, insurers and mutual funds Rs 52,490 crore, according to Morgan Stanley.
About Rs 21,070 crore is payable to banks alone, the brokerage said in a report. Yes Bank Ltd., Bank of Baroda, IndusInd Bank Ltd., Andhra Bank and IDFC Bank Ltd. are the lenders with the highest exposure to Reliance Capital debt, it said.
Some of the debt instruments of Reliance Capital's subsidiaries—Reliance Home Finance Ltd. and Reliance Commercial Finance Ltd.—were downgraded to ‘D' by CARE, implying default or likely to default, Morgan Stanley said. But the parent Reliance Capital may not be in a position to extend adequate support to its subsidiaries, it said. CARE had earlier put Reliance Capital's long-term debt programme on “credit watch”.
Of the total consolidated debt owed to banks, Reliance Commercial Finance contributes Rs 11,620 crore, Reliance Home Finance Rs 7,430 crore and standalone Reliance Capital accounts for Rs 6,750 crore, the report said. This includes term loans, cash credit and non-convertible debentures.
Among all types of lenders, Life Insurance Corporation of India had the highest exposure worth Rs 4,700 crore to Reliance Capital at the consolidated level. Other large lenders include National Bank for Agriculture and Rural Development, Small Industries Development Bank of India and schemes of SBI and UTI mutual funds, and New India Assurance Company Ltd. and General Insurance Corporation.
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