Rating agency Crisil has revised its rating watch on the long-term bank facilities and debt instruments of Indiabulls Housing Finance Limited (IBHFL) to ‘Rating Watch with Negative Implications’ from ‘Rating Watch with Developing Implications’.
The rating on the short-term bank facilities and the short-term debt programme has been reaffirmed at ‘Crisil A1+’. IBHFL was under ‘Watch with developing implications’ when the company announced its merger with Lakshmi Vilas Bank (LVB).
“With progress on the merger, the rating watch has been revised as it is possible that the credit profile of the merged entity as a bank could be relatively weaker than other Crisil AAA rated private banks, at least in the short term,” the rating agency said.
CCI nod for merger
IBHFL has received approval from the Competition Commission of India for the proposed merger, while it awaits other approvals.
Crisil said there could be transitional challenges once the merger goes through, as the entity would need to establish its liabilities franchise to compete effectively with banks.
