Government's capacity to implement reforms and policy effectiveness will decide India's rating going forward, Moody's Investors Service said today.
The Baa3 rating of IREDA takes into consideration its standalone credit profile and the high linkage with the Government of India, resulting in a very high dependence on government and a high probability of government support, if needed, Moody's said in statement today.
"The rating downgrade reflects the continued growth in Gail's cyclical business segments, which have a much higher business risk than its core gas transmission business," Moody's Senior Analyst Abhishek Tyagi said in a note.
Moody's, which has a 'Baa3' rating with a positive outlook, said evidence of policymakers working towards a faster fiscal consolidation, reducing the debt-GDP ratio and addressing infrastructure and monsoon volatility challenges will determine an upgrade, going forward.
NTPC's Baa3 reflects its baseline credit assessment (BCA) of baa3. The rating does not factor in any uplift from the Indian government due to the high baa3 BCA relative to the Baa3 sovereign rating.
Talking about the possible review of the FRBM Act, Marie Diron, Senior Vice President, Moody's Investors Service, said the change of fiscal deficit targets will not have any immediate implications.
The stable rating outlook reflects Moody's expectation that Bharti will continue to grow its core Indian and African wireless businesses, and that the group will continue to deleverage on both an absolute and relative basis.
Moody's, which has given the lowest investment grade rating to India, named regulatory complexity and weak social and physical infrastructure as challenges before the country.
Rating agency Moody's Thursday said emerging economies in Asia Pacific region, including India, have high degree of immunity to external shocks, but will face challenges when the Fed begins raising interest rates.
In an interview to CNBC-TV18, Chief Economic Advisor Arvind Subramanian shares his views on Moody's outlook upgarde and the road ahead for the economy.
Moody's upgrades India's outlook to positive versus stable. Rating remains unchanged at Baa3. Moody‘s believe that there is an increasing probability that actions by policy makers will enhance the country's economic strength.
Projecting a 7.5 percent GDP growth next fiscal, Moody's sovereign credit analyst Atsi Sheth in a note pegged average retail inflation at 6.5 percent at end-March 2016, up from 4.6 percent this fiscal.
"The measures in the Budget doesn't change our view on India' s sovereign credit profile," Moody's Sovereign Ratings Analyst Atsi Sheth told Media.
Atsi Sheth, senior vice president -sovereign risk group, Moody's says any hope of an Indian rating upgrade hinges on fiscal consolidation. Moody‘s currently has a Baa3 rating on India with a stable outlook.
All the three big international rating agencies such as S&P, Moody's and Fitch have BBB ratings on the country's sovereign with a stable outlook. The current rating is closest to junk status or below investment grade.
SBI's revised rating for the senior unsecured debt and local currency deposit instruments would now be Baa3 from the earlier Baa2, it said, revising down the outlook on the bank's financial strength rating to negative from stable.
The rupee was trading at a record low of 63.69 to the dollar on Tuesday, as it continued to be most vulnerable to the exodus of foreign capital.
Atsi Sheth, Senior Analyst, Sovereign Risk Group, Moody's Investors Service feels that though there are negative trends but those will not sustain for long period. that outlook on India's Baa3 rating remains stable.
Moody's upgrades rating of Indian government bonds