20 Companies Deep in Debt

High debt-to-market-cap ratio means trouble and one should steer clear of these 20 companies that are sporting high ratios 

When it comes to leverage, debt to equity is the first ratio which is checked. Since the last year the debt condition of many companies, like those in the infrastructure and the capital goods domain, is worsening. The stock market seems to be staying away from them. They have been selling their projects to restructure debt.

Another ratio which measures leverage is the debt-to-market-cap ratio. The debt-to-market-cap ratio over 1 means that the company has more debt than its current market value. Such companies will increasingly find it difficult to raise fresh funds. Also, their stock prices will remain in check. We checked the debt-to-market-cap ratio of the BSE 500 companies and found that it is at a record level. Following is the list of top 20 companies with the highest debt-to-market-cap ratios.

Company Name	Net Worth	Debt	Market Cap	Debt to
	(Rcr)	(Rcr)	(Rcr)	Market Cap
Lanco Infratech	1440	36705	1199	30.61
Bhushan Steel	9058	35224	1287	27.38
Alok Industries	3448	20012	986	20.29
Gitanjali Gems	3944	8484	435	19.5
GVK Power & Infrastructure	2778	22613	1292	17.5
Jaiprakash Associates	10074	73162	4305	16.99
Jaiprakash Power Ventures	6345	28066	2092	13.42
MTNL	5043	14216	1077	13.2
IVRCL	1948	8334	650	12.83
Shree Renuka Sugars	-498	9560	1056	9.05
Punj Lloyd	2232	6862	812	8.45
Videocon Industries	4698	40212	5016	8.02
Orchid Chemicals & Pharma	380	3414	428	7.98
KSK Energy Ventures	2873	15134	2025	7.48
ABG Shipyard	1376	5462	775	7.04
Ballarpur Industries	2297	6144	911	6.74
Usha Martin	1990	3732	576	6.48
Aban Offshore	3846	14561	2312	6.3
Rain Industries	2946	7673	1298	5.91
GMR Infrastructure	6086	45041	7642	5.89

source: value research