Corporates cold to Sebi call for Covid-19 impact

In a circular dated May 20, Sebi had directed the listed companies to evaluate the impact of Covid-19 on their capital and financial resources, profitability, liquidity position, assets, and ability to service debt. 

Instead, companies have spoken about the number of plants, warehouses and distribution centres that have resumed operations; work-from-home and safety measures undertaken for employees; and the labour shortage they are facing.

Photograph: Shailesh Andrade/Reuters.

Corporate India is going slow on Covid-related disclosures mandated by the Securities and Exchange Board of India (Sebi) last month. 

At least 25 companies across sectors have come out with disclosures in separate filings to the stock exchanges, but they have given a general business update, without specifying the financial impact of the coronavirus crisis on their operations. 

 

In a circular dated May 20, Sebi had directed the listed companies to evaluate the impact of Covid-19 on their capital and financial resources, profitability, liquidity position, assets, and ability to service debt. 

Instead, companies have spoken about the number of plants, warehouses and distribution centres that have resumed operations; work-from-home and safety measures undertaken for employees; and the labour shortage they are facing. 

They say it is difficult for them to assess the impact of the pandemic on their business. The few which have bucked the trend include names such as Mahindra & Mahindra (M&M), Dabur India, BPCL, and Ultratech Cement. 

Corporate lawyers, however, point out the May 20 circular is worded as an “advisory”. 

“Across the circular, the listed entities are encouraged to assess the impact of Covid-19 to the extent possible and consider disclosing the material information,” Anchal Dir, Anshu Choudhary, and Aakriti Thakur of law firm Cyril Amarchand Mangaldas said in a note. 

Bajaj Finance has opted to give a detailed insight of the financial impact of the pandemic on its business in its recently released March-quarter investor presentation rather than making a separate disclosure to the stock exchanges. The above-mentioned four companies, however, have come up with separate disclosures on the same. Some experts argue that the Sebi circular has come after many firms declared their March-quarter results. 

Dabur, for example, said it expected its revenue from operations and net profit to take a hit to the tune of Rs 400-450 crore and Rs 60-80 crore, respectively,…

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