In May, the government had announced a slew of measures to support MSME sector including collateral-free loans up to Rs 3 lakh crore.
The first round of economic relief package announced by the government for micro small and medium enterprises (MSMEs) will provide a limited respite to the sector and partially ease near-term liquidity stress of lower rated such companies, says a report.
In May, the government had announced a slew of measures to support MSME sector including collateral-free loans up to Rs 3 lakh crore backed by government guarantee, Rs 20,000 crore subordinate debt provision for stressed MSMEs, among others.
The government also revised the definition of MSMEs to include entities with revenue up to Rs 250 crore and investment in fixed assets up to Rs 50 crore.
Talking about its rated companies, India Ratings and Research in a report said, “The first round of economic relief package announced for MSMEs will partially abate the near-term liquidity headwinds faced by some of the lower rated (below investment grade) mid and emerging corporates (MECs).
The rating agency defines MEC as companies having revenue up to Rs 750 crore. Under the revised definition, a large portion of these companies will qualify as MSMEs, its senior analyst Arindam Som said.
Source: Financial Express