20 Companies Deep in Debt
High debt-to-market-cap ratio means trouble and one should steer clear of these 20 companies that are sporting high ratios
By Vikas Vardhan | May 29, 2015
When it comes to leverage, debt to equity is the first ratio which is checked. Since the last year the debt condition of many companies, like those in the infrastructure and the capital goods domain, is worsening. The stock market seems to be staying away from them. They have been selling their projects to restructure debt.
Another ratio which measures leverage is the debt-to-market-cap ratio. The debt-to-market-cap ratio over 1 means that the company has more debt than its current market value. Such companies will increasingly find it difficult to raise fresh funds. Also, their stock prices will remain in check. We checked the debt-to-market-cap ratio of the BSE 500 companies and found that it is at a record level. Following is the list of top 20 companies with the highest debt-to-market-cap ratios.
|Company Name||Net Worth|
|GVK Power & Infrastructure||2778||22613||1292||17.5|
|Jaiprakash Power Ventures||6345||28066||2092||13.42|
|Shree Renuka Sugars||-498||9560||1056||9.05|
|Orchid Chemicals & Pharma||380||3414||428||7.98|
|KSK Energy Ventures||2873||15134||2025||7.48|
It's time to start building your stock portfolio with great stocks at low valuations.
Our equity analyst team has sifted through hundreds of companies and selected a short list of stocks that you should invest in. This list now has 36 stocks on it. Thousands of our members are using stagnant equity markets to buy great stocks at low prices.
Membership is currently available at a 40% to 60% discount.