Corporate credit robust in H1, 202 issuers got rating upgrades: Ind-Ra

India Ratings and Research (Ind-Ra) reported that the corporate credit profile maintained its strong performance in the initial half of the current fiscal year, marked by 202 issuers receiving rating upgrades. Notably, major corporations and those rated A witnessed a notable upgrade increase, leading to a low downgrade-to-upgrade (D/U) ratio of 0.31, as highlighted by Arvind Rao, Head of Credit Policy Group at Ind-Ra.

Ind-Ra stated that this robust trend in corporate credit profiles has been consistent over the last four years, with 202 issuers, constituting 20% of the reviewed portfolio, experiencing rating upgrades, while 62 issues faced downgrades. Mr. Rao mentioned an expectation of a slight moderation in the D/U ratio for the current fiscal year, compared to 0.37 in the previous fiscal year 2023-24. Looking ahead, Mr. Rao expressed confidence that the second half of the fiscal year will likely see more issuer rating upgrades surpassing downgrades. The first half of the fiscal year notably showed a significant increase in rating upgrades for large corporations, especially those in the 'A' category and above, experiencing fewer rating downgrades.

This positive trend was underpinned by robust economic growth, strong domestic consumption demand, a rise in rural demand, sustained government emphasis on capital expenditure, and a thriving services sector, as highlighted by Ind-Ra, a part of the Fitch group.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.