Covid-19 impact: Moody’s downgrades 8 Indian firms and 3 banks

A day just after India’s sovereign ranking downgrade, Moody’s Investors Service on Tuesday slice scores of eight non-fiscal businesses, like Infosys, TCS, ONGC, and 3 banking institutions SBI, HDFC Lender and EXIM.

It also downgraded seven Indian infrastructure issuers, like NTPC, NHAI, GAIL and Adani Environmentally friendly Power Limited Team, by 1 notch. Issuer scores of IRFC and HUDCO have also been decreased.

Moody’s mentioned the economic disruption prompted by the coronavirus pandemic and the downgrade of the sovereign ranking are the key drivers for Tuesday’s ranking steps. On Monday, Moody’s had downgraded India’s sovereign ranking for the very first time in 22 several years by a notch to ‘Baa3’, which is the lowest investment quality — just a notch over junk status.

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Accordingly, the prolonged-term issuer scores of eight non-fiscal businesses — Oil and Normal Gas Corporation, Hindustan Petroleum Corporation Ltd, Oil India Ltd, Indian Oil Corporation Ltd, Bharat Petroleum Corporation Ltd, Petronet LNG, Tata Consultancy Products and services (TCS) and Infosys — have been downgraded. The outlooks on all these scores are unfavorable.

On the other hand, Moody’s affirmed the issuer ranking of Reliance Industries but revised the outlook to unfavorable from secure.

With regard to scores of banking institutions, Moody’s has downgraded the prolonged-term nearby and international currency deposit scores of HDFC Lender and SBI to Baa3 from Baa2, and the prolonged-term issuer ranking of EXIM India to Baa3 from Baa2, with unfavorable outlook.

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The deposit scores of these banking institutions are at the very same level as India’s Baa3 sovereign ranking. Consequently, Moody’s has downgraded HDFC Bank’s baseline credit rating assessment (BCA) to baa3 from baa2.

Moody’s has placed the Baa3 prolonged-term nearby and international currency deposit scores of Lender of Baroda, Lender of India, Canara Lender and Union Lender of India and their BCAs less than review for downgrade.

Moody’s has downgraded IndusInd’s prolonged-term nearby and international currency deposit scores, with a unfavorable outlook.