Ratings upgrade higher than downgrades in H2'24 though pace moderates
upgrades to downgrades during October-March 2024 despite rise in borrowing costs and supply constraints due to war in the middle-east and the red sea crisis.
Domestic consumption, demand across several sectors, government spending on public infrastructure, and healthy balance sheets helped in improving credit profiles, according to rating agencies. Major rating companies have recorded more upgrades than downgrades though the pace moderated sequentially.
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Offering CollegeCourseWebsiteIndian School of BusinessISB Leadership in AIVisitUniversity of Western AustraliaUWA Global MBAVisitIndian School of BusinessISB Chief Technology OfficerVisitCredit ratio, the ratio of upgrades to downgrades are stabilising at pre-COVID levels. For Crisil, the largest rating company, the credit ratio improved to 1.79 during October- March 2023-24 compared to 0.77 in October-March of 2019-20. It was 1.21 in the first half of FY’2019-20 before the onset of the pandemic. Credit ratio for other major rating agencies was above one with sequential numbers lower which could be also due to the base effect. For Icra, the number of instances of defaults dipped to five in FY’2024, compared with 22 in FY’2023 and 42 in FY2022.
“Corporate India’s performance in FY24 remained on track, with upgrades continuing to outpace downgrades significantly” said
Arvind Rao, Senior Director, Head of Credit Policy Group at India Ratings.
Upgrades were driven by sectors such as roads, renewables,
