India tycoons running out of time with debt dagger hanging over stocks

Shares of publicly traded firms with a large portion of equity pledged as collateral risk abrupt declines should lenders move to recover their dues

Indian media giant Essel Group, run by industry mogul Subhash Chandra, is seeking an extension to repay debt in order to avoid creditors liquidating its shares.
 

The company faces a month-end debt repayment deadline. If that’s not met, creditors can sell shares in the group’s flagship Zee Entertainment Enterprises Ltd. kept as collateral against loans. The case highlights broader risks that borrowings backed by stock pose to the equity market. There’s a lot at stake with share-backed loans currently at about Rs 1.9 trillion ($26.5 billion).

Essel Group’s Chandra is seeking to sell assets ranging from a stake in the