Mumbai: From cloth makers to shipyards, Indian banks are getting stuck with shares of companies that are rapidly losing value even as the lenders seek to turn more loans they have made into equity in borrower firms.
In the latest move, State Bank of India and other creditors are planning to convert part of their loans to the beleaguered carrier Jet Airways Ltd. into equity as it struggles to repay debt. That’s a risk for the largest Indian bank, whose equity holdings’ market value crashed to about $104 million last quarter from $480 million a year earlier, while its stakes remained largely unchanged, data compiled by Bloomberg show.
