Little gain from Kamath Panel proposals, say auto dealers, component makers

They say average current ratio for industry is 0.8-0.9 due to two-year distress, so meeting the suggested ratio of 1 will be difficult for many

The apex body of auto component manufacturers — Automotive Component Manufacturers Association (ACMA) — and retailers association — Federation of Automobile Dealers’ Association of India (FADA) — have said the Kamath committee’s recommendations on loan restructuring will help the auto sector. 

However, they said that the financial ratios recommended by the experts’ committee need to be reconsidered.  

Large listed companies in the auto components and automobile manufacturing space are unlikely to opt for loan restructuring as most of them have strong balance sheets with very less debt. It will largely impact smaller companies in the sector, said analysts.

According to FADA, only a