The CFO quoted earlier added that lenders are reluctant to increase exposure to airlines due to historical issues like bankruptcy of Kingfisher Airlines and Jet Airways, but that should change. “There are airlines in India with strong management which would have expanded their business hadn’t this pandemic struck. Banks should do due diligence but not be hesitant to lend to such companies,” he added.
“It’s a huge relief. Had it not been for the SC judgment, quite a number of hotels would have become an NPA account,” said the CEO of a hotel chain. The branded hotel segment has close to 160,000 rooms. Of this, 100,000 are owned by individuals who do not have access to capital and are highly leveraged. At least a third would have become NPAs. In value terms, this would translate into Rs 13,000-25,000 crore, said a hotel industry executive.
Ajay Bakaya, managing director at Sarovar Hotels, said: “We welcome the SC directive. Plenty of hotels are struggling and this will give them some breathing space.” The average occupancy across hotels in India is somewhere close to 20 per cent. This doesn’t even cover the operating expense.
Apart from large companies, the pandemic has also hit small and medium enterprises unable to pay salaries to their employees and vendors. “My bank debited the interest for the months of March and April, but when I mentioned the moratorium, it was reversed a day later,” said the CEO of a small-sized enterprise in Mumbai.
The festive season has already begun and some positive signals by the government might give a nudge to consumption activity. Specific announcements for hospitality, tourism, retail, and the health care sectors are eagerly awaited as well.
Greater impetus to housing, infrastructure, and the auto sectors, and support to state governments for purchase of buses for city transportation must also be considered, industry lobby firm, Federation of Indian Chambers of Commerce & Industry said soon after contraction in gross domestic product numbers were announced.