New Delhi, Oct. 26 -- What binds telecom major Vodafone, infrastructure company IVRCL, Bajaj Hindusthan Sugar Ltd and real estate company Unitech? For each of them, profit before interest and taxes was insufficient to cover interest payments for three consecutive years up to 2024-25. Effectively, they were either defaulting on their loans or borrowing more or raising capital to service them.

In finance parlance, such companies are called 'zombie firms'. They keep going, but their fragility limits their own prospects and, at a broader level, those of the overall economy. A recent study by Dun and Bradstreet (D&B) shows that while their absolute numbers remain significant, their relative prevalence has declined from six years ago. Yet, it ...