Ratings agency Moody’s has taken rating action on 11 banks as well as 11 companies, a day after it downgraded India’s sovereign rating to Baa3 from Baa2.
Among banks, Moody’s has downgraded the long-term local and foreign currency deposit ratings of HDFC Bank and State Bank of India to Baa3 from Baa2, and the long-term issuer rating of EXIM India to Baa3 from Baa2, while maintaining ‘negative’ outlook.
HDFC Bank’s Baseline Credit Assessment (BCA) has been downgraded to Baa3 from Baa2. In the case of SBI, Moody’s expects its asset quality and profitability to weaken, which could hurt its capitalisation. Punjab National Bank’s ratings were affirmed at Ba1 and its baseline credit assessment at b1.
The rating outlook of PNB is changed to ‘stable’ from ‘positive’. Moody’s has placed Bank of Baroda, Bank of India, Canara Bank and Union Bank of India’s baseline credit assessment under review for downgrade.
In the case of Central Bank of India and Indian Overseas Bank, Moody’s has affirmed their long-term local and foreign currency deposit ratings at Ba2 and their BCAs at b2. The rating outlook of these issuers is maintained as ‘stable’.
Oil firms get ‘negative’
Moody’s also downgraded the ratings of major Indian companies such as ONGC, HPCL, Oil India Limited, IOCL, BPCL, Petronet LNG Limited, TCS, and Infosys Limited to negative on Tuesday.
In addition, Moody’s has affirmed the long-term issuer ratings of Reliance Industries Limited (RIL) to negative from stable.
Infra firms take a knock
The ratings agency also downgraded seven leading Indian infrastructure issuers by one notch.
These include National Thermal Power Limited, NHPC Limited, National Highways Authority of India, Power Grid Corporation of India Limited, Gail (India) Limited, Adani Green Energy and Adani Transmission.