A Study on Financial Distress of Selected Finance Companies in India
Author : Vaishaliben C Patel and Dr. Deepak Raste
Abstract :
The Indian finance industry has experienced significant growth and transformation in recent years, driven by technological advancements, increased mobile penetration, and the adoption of digital services. However, this rapid expansion has also led to intense competition, mounting debt, and regulatory challenges, which have put several finance companies in India under financial distress. This paper aims to provide a comprehensive analysis of the financial distress faced by finance companies in India, its underlying causes, and the potential implications on the industry's overall stability. This research employs a mixed-method approach, incorporating both qualitative and quantitative analyses. This study utilizes financial ratios, liquidity indicators, profitability measures, and solvency metrics to assess the Altman’s Z-Score for financial health of selected finance companies. By comparing the financial performance of distressed firms with their healthier counterparts, this research aims to identify key financial markers that indicate the onset of distress. The findings reveal that finance companies in India are grappling with a myriad of issues, including high debt levels, intensified price wars, capital-intensive infrastructure investments, and regulatory uncertainties.
Keywords :
Financial distress, accounting ratios, descriptive statistics, Altman’s Z-score, ANOVA
