Fitch said state banks already face significant execution risks in raising equity due to depressed stock market valuations and weak investor interest.
IOC's rating benefits from its dominant market position in India, where it is the largest oil refining and marketing company, the above-average complexity of its refining assets and improving diversification
The reported performance of Indian banks for the financial year ended March 2020 does not adequately reflect the incipient stress caused by the pandemic, the rating agency said.
The rating agency, however, retained its projection of Indian economy contracting by 5 percent in the current fiscal.
GAIL's dominant market position in the regulated utility gas-transmission business, complemented by its diversification into other business segments, and healthy credit metrics were factors governing the rating.
HUDCO is a policy institution that provides housing finance and non-commercial urban infrastructure financing. It is regulated by the National Housing Bank (NHB) and is under the administrative control of the Ministry of Housing and Urban Affairs.
Automakers reported zero sales volumes in April and more than 75 per cent Y-o-Y decline in May because of weaker demand as well as production disruption owing to plant closures, supply chain disruption and the lack of labour availability, the rating agency said.
Fitch said it has also affirmed Bharti's senior unsecured rating and Bharti Airtel International (Netherlands) B.V.'s senior unsecured guaranteed bonds at 'BBB-', and Network i2i subordinated perpetual bond's rating at 'BB'.
Fitch Director Sovereign Ratings Thomas Rookmaaker said COVID-19 is still in India and it is “very likely” that the government will have to spend a bit more on fiscal measures to support the economy.
Corporates can also simplify or reorganise complex group structures without the interference of minority shareholders through such moves, the agency noted.
"The action follows the announcement by (Agarwal's) Vedanta Resources Ltd (VRL) of its intention to delist the shares of its Indian subsidiary and CIHL's parent, Vedanta Ltd (VLTD). CIHL's rating is aligned with the credit profile of VLTD, which owns 100 per cent of CIHL, reflecting their strong linkages," Fitch said in a statement.
Fitch ratings said that after the global crisis, India's GDP growth is likely to return to higher levels than 'BBB' category peers, provided it avoids further deterioration in financial sector health as a result of the pandemic.
The impact of forced lending on banks' impaired-loan ratios can be anywhere between 200 and 600 basis points (bps), depending on the severity of stress and banks' individual risk exposures and the higher regulatory provisions, Fitch Ratings said in the report on Thursday.
"India has had a very stringent lockdown policy that has lasted a lot longer than initially expected and incoming economic activity data have been spectacularly weak," Fitch said.
"Notwithstanding the effect of the pandemic, we expect FY21 industry mobile service EBITDA to increase by about 15 percent YoY, which will outperform our Indian GDP growth forecast of 0.8 percent, as the industry will realise the full-year benefit of industry-wide tariff hikes of around 30 percent, effective from December 2019," the rating agency said in a note.
The Negative Outlook reflects the ongoing uncertainty relating to the timing and duration of the traffic shock and recovery caused by the coronavirus pandemic, the rating agency said on Tuesday.
Fitch in a statement said the FY20 financial profiles of the three companies were likely to have been affected by large inventory losses due to the steep fall in crude oil prices in the last fortnight of March 2020 and by weakened demand during the period.
"The rating actions are driven by rapid deterioration in the operating environment for banks in the country following the coronavirus pandemic and measures to contain its spread," the agency said.
Italy has been one of the hardest hit by the outbreak of the new coronavirus — and is also one of the developed countries that can least afford its costs.
It said the government may tighten fiscal policy again once the pandemic is under control, but India's record of meeting fiscal targets and implementing fiscal rules has been mixed in recent years
It’s very likely they will have to revise them again very soon
Several major economies have extended lockdowns of eight-nine weeks. This contrasts to the previous assumption of around five weeks. An extra month of lockdown will reduce the annual flow of income by around 200 basis points, Fitch said.
In its Global Economic Outlook, Fitch Ratings said India's gross domestic product (GDP) growth will slip to 0.8 per cent for the year April 2020 to March 2021 (FY21)
Rookmaaker said economic activity in India has been hit hard by the COVID-19 pandemic, as in many other countries, especially those that have imposed lockdowns.
Developed market sovereigns and those in Latin America have experienced the most multi-notch downgrades.