The financial sector dreads September, the month that has just gone by. In 2001, the twin World Trade Center towers in Manhattan were struck by two commercial aircraft, shutting the NYSE/Nasdaq for a whole week. In 2008, Lehman collapsed, paralysing global markets. Last year, ILFS filed for bankruptcy, seizing India’s shadow banks. For one year now, Dalal Street has been gripped by a death wish, which culminated in the bizarre case of Altico Capital – last month, in September!
Altico’s story is surreal. It’s an unlisted non-banking finance company (NBFC) founded by three global giants who manage world-wide assets of nearly $ 300 bn. Altico itself has over Rs 500 cr in equity and Rs 3000 cr of net worth. Its profits in Q1 this year were over Rs 75 cr. The company had more than Rs 550 cr in cash – yes, in cash. And yet, it defaulted on a paltry interest payment of under Rs 20 cr to Mashreq Bank. Yes, under Rs 20 cr. Bizarre, right?