India is a top place for zombie companies

Interestingly, Nikkei examined the financial health of about 26,000 listed companies in Japan, the US, Europe, China and Asia (including India), excluding financial institutions, using data from QUICK FactSet. The findings are ominous. The number unable to cover debt-servicing costs from operating profits for at least three consecutive years hit about 5,300 in fiscal 2018, accounting for 20 per cent of the total, compared to 14 per cent of the total of 18,000 listed companies in 2008. 'The ratio of zombie companies has risen especially fast in India, Indonesia and South Korea. They accounted for 26 per cent of the total in India, up 13 points from a decade earlier; 24 per cent in Indonesia, up 11 points; and 18 per cent in South Korea, up 4 points. In India, many power companies of major conglomerates have loaded up on debt, including Adani Power, a member of Adani Group, and Reliance Power, a unit of Reliance ADA Group,' said the Nikkei Asian Review. In South Korea, a number of companies belonging to conglomerates such as Samsung and Hyundai have become zombies. The global scenario is nothing to write home about either. Going by what the Nikkei research says, globally, the number of companies that do not generate sufficient profits to cover their interest payments and survive only by repeatedly refinancing their loans has doubled in a decade to constitute a fifth of all corporations. ... DailyhuntDisclaimer: This story is auto-aggregated by a computer program and has not been created or edited by Dailyhunt. Publisher: Deccan Chroniclehttps://ask.fm/subgnehagee

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