Getting a breather: High commodity costs give debt relief to PSUs

Combined net debt stood at Rs 6.83 trillion at the end of March 2021

Listed non-financial central public sector undertakings (CPSUs) reported a decline in borrowings for the first time in five years, thanks to gains from higher metal and energy prices. The combined net debt of these firms was down 6.4 per cent to Rs 6.83 trillion at the end of March from Rs 7.3 trillion a year ago.

As a result, the combined net-debt-to-equity ratio of the 37 CPSUs in Business Standard’s sample improved to 0.75x in FY21, from a record high of 0.77x in FY20. The improvement in leverage ratio was driven both by a cut in overall debt and higher earnings,