ICICI's exposure to Reliance group at 45.4%
Reliance Group
ril.com
Essar Group
essar.com
Jindal Group
jindal.com
RP Goenka Group
rpgnet.com
The Mittals
thelnmgroup.com
inland.com
inland.com
steelprofiles.com
Indian Oil Corporation
iocl.com
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Kailash Rajwadkar
Mumbai, March 17: Term-lending institution ICICI's exposure to the Reliance group was pegged at 45.4 per cent of its net-owned funds in March 1999. However, taking into account the Rs 1,000-crore ($217 mil) securitisation deal entered into with Reliance Industries, the institution's exposure to the group works out to 61.7 per cent of its net worth as on March 31, 1999--higher than the Reserve Bank of India-stipulated 50 per cent.
"As such, the prudential exposure ceilings in respect of individual borrower and borrower group were not exceeded. However, the institution had not treated the deal entered with RIL regarding the securitisation of oil and gas receivables amounting to Rs 1,000 crore ($217 mil) as exposure to Reliance group. On inclusion of this amount, the exposure to Reliance group worked out to 61.7 per cent of the net-owned fund of the institution as on March 31, 1999, in excess of prudential exposure ceiling prescribed by the RBI," the central bank's inspection report on ICICI for 1998-99 pointed out.
The Essar Group is the second-largest group borrower with an exposure of 35.20 per cent, followed by OP Jindal Group (26.51 per cent), RP Goenka Group (20.24 per cent) and the ML Mittal group (17.08 per cent).
The Reliance outfits also top the list of individual borrowers having large exposures as percentage of ICICI's net-owned funds as on March 31, 1999. The first three slots went to Reliance Petroleum (18.97 per cent), Reliance Industries (18.2 per cent), Reliance Port & Telecommunications (13.71 per cent).
Among the five companies with largest exposures only two were outside the Reliance group. They were Jindal Vijaynagar Steel (13.40 per cent) and Indian Oil Corporation (12.96 per cent).
Going by the RBI stipulation, a financial institution could take a maximum exposure of 25 per cent of its net worth to a company and 50 per cent of its networth to a group. The RBI revised the exposure limit in its October 1999 credit policy, bringing it down to 20 per cent to a company and 25 per cent to a group.
-Indian Express Newspapers (Bombay) Ltd. |
