It also added "We have revised down our growth forecast for India. We now forecast slower real GDP growth of 5.6 percent in 2019, from 7.4 percent in 2018". "India's economic slowdown is lasting longer than previously expected."
Moody's has also downgraded the senior unsecured rating of the US dollar-denominated bonds issued by Lodha Developers International to Caa1 from B2.
Moneycontrol's Sakshi Batra talks to Deputy Executive Editor Gaurav Choudhary to find out the reasons for the downgrade.
Moody’s changed its outlook on India to “negative” from “stable” amid concerns that the country’s economic growth will remain "materially lower than in the past". The outlook partly reflects government and policy ineffectiveness in addressing economic weakness, which led to an increase in debt burden from already high levels, the agency said.
The development comes after Moody’s Investors Service, on November 7, changed its outlook on India’s ratings to "negative" from "stable", citing increasing risks that the country’s economic growth will remain lower than in the past.
The growth slowdown is expected to be long-lasting and Moody’s has lost its earlier confidence in reforms continuing
The Ba3 rating of the bank can be downgraded because of the weak September quarter earnings and the bank managing to get only a commitment for $1.2 billion in funding recently, the agency said.
Moody’s estimates corporate tax cuts will add 0.1 percentage point to India’s GDP growth.
Moody's attributed the deceleration to an investment-led slowdown that has broadened into consumption, driven by financial stress among rural households and weak job creation.
ONGC is India's largest integrated oil and gas company, accounting for 75 percent of crude oil and natural gas production by volume, and 17 percent of domestic refining capacity.
The move follows Fitch Ratings' downgrade earlier this month on Hong Kong's long-term foreign-currency-issuer default rating to "AA" from "AA+".
Moody’s has affirmed a stable outlook for banks including Canara Bank, Oriental Bank of Commerce, Syndicate Bank and Union bank of India. The firm changed the outlook on Punjab National Bank to positive from stable.
Fitch director for financial institutions in India Saswata Guha said it is a step in the right direction and a way to prepare them for the future, but this is not a remedy to the current problem that banks are dealing with such as low capital and high non-performing loans.
The report said the NCLAT ruling could have had material implications for recoveries by banks, pointing out that Essar is the largest NPA being tackled in the resolution process to date.
The rating agency said cases in the IBC have taken much longer to resolve than the originally envisaged 270 days, in large part because concerned parties have repeatedly appealed to higher courts.
Sale of a significant stake in its tower assets would help in further debt reduction, the ratings agency added.
The rating agency said delivering on fiscal consolidation and raising incomes will be extremely challenging for India's authorities, particularly since growth is likely to remain weak over the coming year, Moody's said.
The agency expects it will take longer than previously expected for JLR to improve its free cash flows to the positive territory.
"The change in ATL's outlook to stable reflects the expected improvement in its financial position over the next 12-18 months, underpinned by incremental earnings contributions from the Mumbai integrated utility business acquired last year and recently completed greenfield projects," Moody's Vice President and Senior Analyst Spencer Ng said.
The review for downgrade takes into account its expectation that the ongoing liquidity pressures will negatively impact the credit profile of Yes Bank, given the bank's sizeable exposure to weaker companies in the sector
National oil companies (NOCs) worldwide are currently retailoring their business strategies in response to climate-change imperatives and developing energy transition changes.
Moody's Vice-President and Senior Credit Officer Kaustubh Chaubal said the rating downgrade reflects the weakening in Birla Carbon's credit profile, due to its aggressive financial policy, as seen by its just-concluded debt-financed acquisition of a trading company.
The higher share of renewable energy in the total energy mix presents a key regulatory challenge in terms of integrating new renewable capacity, while protecting investments already made in coal-based capacity, it said.
As per the trend, BJP-led NDA will form the government at the Centre for the second successive term with absolute majority.
The US Friday increased tariffs on import of USD 200 billion Chinese products from 10 per cent to 25 per cent. US President Donald Trump has said that such a move was necessary to hold the Asian country to previous commitments, while China's Commerce Ministry has warned that Beijing will not "capitulate to any pressure" and has threatened retaliation.