S&P Global predicts fund requirement by PSUs

As per a report by S&P Global ratings, the public sector banks would require at least Rs 1.9 lakh crores of additional capital by March 2019 in order to write down non-performing loans.

“We estimate that Indian banks may need a minimum of about $29.6 billion (Rs 1.9 trillion) over the next two years,” S&P Global Ratings credit analyst Geeta Chugh said.

“India’s public sector banks face three key challenges in tapping equity capital markets: low equity valuations, overcrowding in the market, and regulations. At the same time, they may find it hard to raise money via the issuance of additional Tier-1 capital instruments because the risk of default on these instruments is rising,” S&P Global Ratings credit analyst Deepali Seth-Chhabria said.

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