Mumbai: In line with the massive 240 bps downward revision in growth forecast, credit profile of companies has also sharply deteriorated in the first three quarters, with the downgrades-to-upgrades ratio more than doubling to 1.82, according to a report.
The year also witnessed the quarterly downgrades-to-upgrades ratios jumping to 1.59, 2.03 and 2.75, respectively for the nine months, as the severity of slowdown were factored into ratings, India Ratings said in a report on Monday.
In an unprecedented fifth downward revision of its GDP forecasts for a year, the agency has sharply revised down its forecast to a low 5% from 7.5%, which also sharply increased corporate rating downgrades during this period, it added.
"The deepening slowdown reduced the number of upgrades. Consequently our downgrades-upgrades ratio moved up to 1.832 till December from 0.86. During the period, we downgraded 188 issuers, while upgrades were only 103, making it one of the highest in recent years," it said.
Downgrades amounted to Rs 1.53 lakh crore of the rated debt compared to upgrades of Rs 49,600 crore, and downgrades were led by some debt-heavy financial sector issuers -- 45% by value and 6% by volume, as per the report.
