Interest coverage ratio of unlisted cos at 30-year high, shows data

Uptick in FY24 mirrors similar trend in the listed space. The second of a 3-part series on unlisted firms' financials looks at their debt

Excess earnings of unlisted companies over and above their interest costs are at a record level.

 

The interest-coverage ratio of 2.94 is the highest going back to 1990-91, according to numbers from the Centre for Monitoring Indian Economy (CMIE).

 

The ratio measures earnings relative to every rupee to be paid as interest on outstanding debt. The uptick mirrors a similar improving trend in the listed space, where the ratio (5.28) is the highest in 16 years.

 

The analysis is based on the data on 4,231 unlisted companies for 2023-24 (FY24) — what is available as of December-end.

 

This represents roughly