Business & Investment

Rating agencies report a surge in upgrades and improved creditworthiness

Rating agency Reported the most surge in the June quarter upgrade Since the start of the pandemic early last year, local businesses have regained their business health and are showing better results, countering the downgrade trend. Credit, Among many remedies.

According to the Prime Acuité Credit Rating Transition Database, which summarizes data on seven local credit ratings, credit ratings, an indicator of a company’s financial position, surged from 1.7 in the January 1-March quarter to 2.08 in the June quarter. , Credit agencies have upgraded 771 companies with a 370 downgrade.Companies including Acuite, Brick wall, Care,

,, Indian Ratings and Infomeric.

Credit ratios, or upgrades to downgrades, have risen steadily since the first quarter of last year. Last April-June gauge was 0.36, upgrades were 241 and downgrades were 662. It was 1.77 from January to March of this year. A ratio of less than 1 indicates that the financial condition of the corporate sector is deteriorating.

“The first-quarter upgrade reflects factors such as government spending, liquidity support and cost savings,” said KRavichandran, Deputy Chief Rating Officer for ICRA Ratings. “The loan restructuring plan is working well for the enterprise and avoids the possibility of downgrade.”

“The transition from an unorganized sector to an organized sector has begun,” he said.

The labor movement for urban projects resumed after migrant workers rushed back to their homes in the hinterland amid a severe blockade last year. The blockade in the second wave of the pandemic is more relaxed than in the first wave of infection.

Electricity, real estate, pharmaceuticals and chemicals are at the forefront of upgrades.

Suman Chowdhury, Chief Analyst for Acuite Ratings, said: “Since the outbreak of the pandemic last year, the rate of upgrades has risen at the fastest pace.”

“Companies in some sectors were better than expected in 2009, and companies in other sectors could regain business health in 2010,” he said.

Credit ratios, or upgrades to downgrades, have risen steadily since the first quarter of last year. Last April-June gauge was 0.36, upgrades were 241 and downgrades were 662. It was 1.77 from January to March of this year. A ratio of less than 1 indicates that the financial condition of the corporate sector is deteriorating.

Sachin Gupta, Chief Rating Officer of CARERatings, said: “The impact of the second wave on the economy is not all about the fact that supply chain activities remain unaffected. Commodity cycles are the businesses of many sector companies such as steel and metals. It also helped me to improve my luck. ”

“In addition, business optimism, backed by increased vaccination, has added to that, resulting in more upgrades,” he said.

Steel companies have revived their destiny at record high steel prices and breathed new life into the industry.

The banking system has surplus liquidity of Rs 5.45. Both the government and the RBI have announced a number of plans to meet their funding needs.

The Treasury launched the Emergency Credit Line Guarantee (ECLGS) in May last year to bail out a pandemic-hit economy. It was intended to provide unsecured loans to small and medium-sized enterprises (MSMEs). The facility was expanded until September 30th this year.

This is about 61 percent of the planned cap of 45,000 rupees.

The government also started spending to increase business opportunities for companies in September last year, and central government policies such as Production Linked Investment (PLI) have paved the way for new investment.

Rating agencies report a surge in upgrades and improved creditworthiness

https://economictimes.indiatimes.com/news/economy/finance/rating-companies-report-sharpest-rise-in-upgrades-improvement-in-creditworthiness/articleshow/84729732.cms Rating agencies report a surge in upgrades and improved creditworthiness

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