Data source: Business Standard
*Aggregate market capitalisation of all listed group companies;
**Consolidated borrowings of all group companies for the year ended March 2012

As per statistics, two-thirds of the total corporate borrowings are by firms whose stock prices are hovering around multi-year lows. As a result, the gap between the outstanding liabilities of these companies and their market capitalisation has been widening. This is indeed a worrying sign for banks. Even if they were to resort to wholesale selling of pledged promoters' shares, they would be able to recover just a small portion of the dues. This is a major risk to the banking sector we believe.

The chart of the day shows the five most indebted corporate houses in India. As is evident, the total market capitalisation of all the listed entities of each group is significantly lower than their total borrowings.