India Companies in Financial Distress
As of 09 October 2026, 302 of 2,290 Indian-listed companies analysed (13%) show financial-distress indicators of the kind that historically precede corporate failure — 122 very weak, 88 weak and 92 on watch. Stress is most concentrated in Telecom & Media (30% flagged), Real Estate Cos & REITs (28% flagged) and Hardware & Electronics (26% flagged). The most common red flags today are operating profit does not cover interest, market-implied default probability >20% and liabilities exceed assets (negative equity).
All sectors
Financial-health bands
Where the stress is
Most common red flags
| # | Ticker | Company / industry | Distress score | Band | Ohlson PD | Merton PD | From 52w high | Mkt cap | Key reasons |
|---|
Showing companies with distress score ≥ 35. Click a ticker for the full stock page, or Details for the indicators behind the score.
Highest financial-distress scores — India companies today
Ranked by distress score as of 2026-10-09. Each name links to the indicators behind its score.
- Andhra Cements Limited (ACL) — Very weak 100/100 · Operating profit does not cover interest, Cash runway under 12 months, Market-implied default probability >20%
- Arshiya Limited (ARSHIYA) — Very weak 100/100 · Liabilities exceed assets (negative equity), Operating profit does not cover interest, Cash runway under 12 months
- Astron Paper & Board Mill Limited (ASTRON) — Very weak 100/100 · Operating profit does not cover interest, Market-implied default probability >20%, Severe working-capital shortfall
- Balkrishna Paper Mills Limited (BALKRISHNA) — Very weak 100/100 · Liabilities exceed assets (negative equity), Operating profit does not cover interest, Cash runway under 12 months
- Burnpur Cement Limited (BURNPUR) — Very weak 100/100 · Liabilities exceed assets (negative equity), Operating profit does not cover interest, Cash runway under 12 months
- CLC Industries Limited (CLCIND) — Very weak 100/100 · Operating profit does not cover interest, Cash runway under 12 months, Market-implied default probability >20%
- Diligent Media Corporation Limited (DNAMEDIA) — Very weak 100/100 · Liabilities exceed assets (negative equity), Operating profit does not cover interest, Cash runway under 12 months
- Emami Realty Limited (EMAMIREAL) — Very weak 100/100 · Liabilities exceed assets (negative equity), Operating profit does not cover interest, Cash runway under 12 months
- Essar Shipping Limited (ESSARSHPNG) — Very weak 100/100 · Liabilities exceed assets (negative equity), Operating profit does not cover interest, Cash runway under 12 months
- Eurotex Industries and Exports Limited (EUROTEXIND) — Very weak 100/100 · Liabilities exceed assets (negative equity), Operating profit does not cover interest, Cash runway under 12 months
- Flexituff Ventures International Limited (FLEXITUFF) — Very weak 100/100 · Liabilities exceed assets (negative equity), Operating profit does not cover interest, Market-implied default probability >20%
- HCL Infosystems Limited (HCL-INSYS) — Very weak 100/100 · Liabilities exceed assets (negative equity), Operating profit does not cover interest, Severe working-capital shortfall
- Krebs Biochemicals & Industries Limited (KREBSBIO) — Very weak 100/100 · Liabilities exceed assets (negative equity), Operating profit does not cover interest, Cash runway under 12 months
- Madhucon Projects Limited (MADHUCON) — Very weak 100/100 · Liabilities exceed assets (negative equity), Operating profit does not cover interest, Market-implied default probability >20%
- MT Educare Limited (MTEDUCARE) — Very weak 100/100 · Liabilities exceed assets (negative equity), Operating profit does not cover interest, Market-implied default probability >20%
Financial distress by sector
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Frequently asked questions
Which Indian companies are in financial distress in 2026?
No one can know for certain which companies will default or fail. As of 2026-10-09, our screen of 2,290 Indian-listed companies finds 302 with financial-distress indicators (122 very weak, 88 weak and 92 on watch). The ranked list on this page shows each company's score and the indicators behind it. A high score means the reported numbers resemble those of companies that later failed — it is not a prediction or an allegation of insolvency.
Which companies are in financial trouble right now?
Today 122 companies are in the 'Very weak' band and 88 in the 'Weak' band. By sector, the highest share of flagged companies is in Telecom & Media (23 of 76), Real Estate Cos & REITs (24 of 85) and Hardware & Electronics (11 of 43). Typical warning signs: operating profit does not cover interest, market-implied default probability >20%, liabilities exceed assets (negative equity) and severe working-capital shortfall.
Are Indian banks and NBFCs at risk of failure?
7 banks, lenders and other financial companies currently show distress indicators. Financial firms are judged on capital (equity/assets), loss streaks, sudden profit collapses, equity erosion and share-price runs — not on current ratio. Open the Bank & Finance sector for the full list.
Is now a good time to buy Indian stocks?
As of 2026-10-09, HeRAI's market-regime model reads Bearish (score -52 on a −100 to +100 scale, combining macro, valuation and breadth). Model stance: Defensive. Hold cash / hedges; consider short setups on failed bounces. Whatever the regime, check a company's financial-distress indicators before buying.
What are the warning signs of corporate financial distress?
The strongest combinations are negative equity, operating profit that does not cover interest, less than 12 months of cash at the current burn rate, collapsing sales and a share price far below its 52-week high. Today 122 companies show several of these together.
How is the distress score calculated?
Three independent lenses: the Ohlson O-score (accounting-based 1-year failure probability), a Merton distance-to-default (market-implied default probability from share price, volatility and debt), and a credit-analyst rule book covering liquidity, leverage, interest cover, cash runway, losses, sales trend, dilution and distress news. Banks and insurers use a separate capital-based rule set. Scores refresh every trading day.
What happens to shareholders if a company becomes insolvent?
Under the IBC the Committee of Creditors controls the resolution; the §53 waterfall pays secured creditors and workers first and equity last. In most resolution plans existing shareholders are wiped out or left with a token stake, and the company may be delisted.
How the distress score works (methodology & legal basis)
Three independent lenses are combined into a 0–100 score (Watch ≥ 35, Weak ≥ 50, Very weak ≥ 70):
- Accounting model — Ohlson O-score (1980): logit model of 1-year corporate failure using size, leverage, working capital, liquidity, profitability, funds-from-operations and earnings change. Applied to non-financial companies only (as in the original study).
- Market model — Merton distance-to-default (Bharath & Shumway 2008 “naive” form): equity is treated as a call option on the firm’s assets; the probability that asset value falls below the default point (short-term debt + ½ long-term debt) within a year.
- Credit-analyst rule book: balance-sheet insolvency, interest cover, leverage (debt/EBITDA), current ratio, cash runway vs. the 12-month going-concern horizon, persistent losses and cash burn, sales collapse, margin compression, dilution, share-price collapse, sub-$1 listing breaches and distress language in recent news. Banks, insurers, brokers and lenders use a separate capital-based rule set (equity/assets vs. prudential floors, equity erosion, losses, hyper-growth).
False-positive controls: buyback-driven negative equity, capex-driven negative free cash flow, stock-comp losses at net-cash companies and utilities/REIT working-capital norms are discounted. Companies with statements older than 15 months, fewer than three usable key ratios, SPAC trust vehicles and records without price history are excluded rather than guessed.
Search indexing: an individual company page is offered to search engines only when at least one objective, verifiable condition applies (negative equity with under 12 months of cash, negative book equity, a share price below the $1 listing standard, or a reported default, going-concern, insolvency or delisting event).
Legal frame: The IBC, 2016 — corporate insolvency resolution (CIRP) before the NCLT on a default of ₹1 crore or more, 330-day outer limit, then liquidation. Banks are excluded from the IBC and are resolved by the RBI under the Banking Regulation Act, 1949; large NBFCs/HFCs enter the IBC only on an RBI application (§227).