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|
Are you missing an opportunity to invest in great stocks at low valuations? There are thousands of listed companies in India and yet only a handful that are worth investing at a particular time and at a particular price.
Our equity team has sifted through hundreds of companies and selected stocks that you should invest in. This list now has 38 stocks on it, and new ones are being added every month. Thousands of our members are using stagnant equity markets to buy great stocks at low prices. Membership of Value Research Stock Advisor is available at a 40% to 60% discount.