A Standard & Poor’s (S&P) forecast in June 2012 had warned that more than half of the 48 companies that are due to redeem an estimated $ 5 billion of convertible bonds in 2012 may default, while the others may redeem by borrowing at high cost or stiffer terms.
The recent phenomenon of sharp fluctuation in the exchange rate, particularly sharp depreciation of Rupee has imparted severe pressure on the profitability of many Indian firms having large foreign exchange obligations.