A STAKE in a Formula One team, four planes and a slew of posh hotels including the Grosvenor House Hotel in London: the troubles of Sahara, an Indian conglomerate whose founder has been in and out of prison, has resulted in a neat pile of trophy assets for the discerning buyer. The often unmanageable debt levels at India’s largest firms now mean plenty of less glamorous assets are up for grabs, too, from cement and steel plants to airports and toll roads. Once adept at giving their bankers the runaround, tycoons are now less able to fend off pressure to pay down debt with sales of prize assets.

Given how indebted India’s largest firms are—ten prominent ones taken together have interest payments bigger than their annual profits, according to Credit Suisse, a bank—there should soon be a long list of items on the block. A few big groups have already raised fresh funds by selling off parts of their businesses. Analysts at State Bank of India reckon that deals worth 2 trillion rupees ($29.8 billion) have been signed or are on the way, enough to make a dent in the total debt of the companies involved, which amounts to around 10 trillion rupees.

So far, more deals have been rumoured than actually completed (the Qatar Investment Authority is poised to snap up the London hotel). Many of the investment bankers who had hoped for fat...Continue reading