Debt of 843 listed cos exceeds their net worth

As many as 843 companies listed on BSE have higher debt than net worth, Parliament was informed today.
Out of 4,066 companies that have submitted balancesheet for the last financial year with BSE, there are 843 firms in which debt is greater than their value considered as net worth on a stand-alone basis, Minister of State for Finance Arjun Ram Meghwal said in a written reply to the Lok Sabha today.
Thus, 20.73 per cent of companies have more debt than net worth, he added.
Currently, 5,522 companies are listed on BSE, formerly known as the Bombay Stock Exchange.
The companies finance their projects through debt as well as equity.

The debt-equity ratio varies as industries rely on different amounts of capital to operate and use it in various ways. A relatively high ratio may be common in one industry while a lower one may be common in another.