COVID-19: Liquidity measures to consider for impacted corporates

Due to the ongoing COVID-19 crisis, businesses are expected to face considerable liquidity challenges due to sharp reduction in economic activity, amidst concerns of weaker demand for at least the next few quarters.

Demand and supply disruptions and varying business forecasts may also impact liquidity positions of organisations, across scale and sectors.

Here’s how business leaders can HALT and review their liquidity positions and plan their responses

To ensure appropriate liquidity in the financial system the Reserve Bank of India (RBI) on 3 April 2020 announced the third Targeted Long Term Repo Operations (TLTRO).

Details of the scheme

• The one lakh crore TLTRO will provide durable liquidity to banks at a repo rate of 4.5% p.a. during the current COVID-19 crisis.
• Leveraging the scheme, the banks will be able to deploy the availed funds at an attractive rate in investment-grade corporate bonds, commercial paper and non-convertible debentures over and above their investments in these bonds as on 27 March 2020.

Urgent actions for corporates to consider during these times

Put together a very brief proposal requesting for funds under TLTRO by providing the following details:

• Business Profile and Operations
• Credit Ratings
• Capital Structure and Shareholding

...and more

Grant Thornton’s Recovery & Reorganisation practice can help corporates navigate various liquidity challenges during these challenging times, including helping you in making proposals for formal request for funds under TLTRO.

The only way now to get ahead is to get started.