Synopsis
The massive liquidity tap, opened by global central bankers to fight pandemic-induced slowdown, is helping companies to reduce debt. Most companies that reduced debt are from the infrastructure or commodity space.
After getting burnt during the previous economic crisis, most companies went on a debt reduction spree in 2019-20 and the trend continued in pandemic affected 2020-21. Is this trend here to stay? Yes, experts say. “Massive balance sheet repairs are happening and this process will continue in 2021-22 and probably in 2022-23 as well,” says Satish Ramanathan, MD& CIO – Equity, JM Financial MF.
How are companies reducing debt during a crisis? The
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