S&P says credit profile of India Inc improving

FILE - 55 Water Street, home of Standard & Poor's rating agency, seen in this Sunday,Oct. 9, 2011 file photo in New York. France has reacted with outrage after the Standard & Poor's accidentally sent out a message saying it was downgrading the country's prized "AAA" credit rating during a tumultuous week in Europe's protracted debt crisis. The error stood for an hour and a half Thursday Nov. 10 2011 before it was retracted by the agency _ spooking markets by foreshadowing the event that could sound the death knell for the 17-nation eurozone. (AP Photo/Henny Ray Abrams)

Global ratings agency Standard & Poor’s on Wednesday said an increasing focus by India Inc on lowering debt is likely to improve their credit profiles.

“More companies are improving their high financial leverage and boosting their credit profiles by adopting measures such as sale of equity and assets or using their free operating cash flows to reduce debt,” S&P said in a report.

“Focus on lowering debt will likely improve their credit profiles,” it added.

The routes adopted by domestic companies include raising equity, selling non-core assets and in some cases divesting businesses, it noted.

S&P credit analyst Mehul Sukkawala said economic gloom and high interest rates have affected debt-servicing ability and these are the primary factors pushing companies towards this strategy. In some cases, companies are refocusing on reducing debt after years of investing for growth.