Crisil upgrades India Inc’s credit outlook to positive :

Inc credit outlook

Crisil has revised India Inc’s credit outlook quality forecast for the financial year 2022 from cautiously optimistic to positive, owing to a prolonged recovery in demand following covid second-wave disruptions.

Key points:

Crisil has revised India Inc’s credit quality forecast for the fiscal year 2022 from cautiously optimistic to positive, owing to a prolonged recovery in demand following covid second-wave disruptions.

Crisil also surveyed 43 sectors, excluding the banking industry, which accounted for 75% of the total outstanding debt of Rs 36 lakh crore. This suggests that the current recovery is broad-based.
According to Crisil, the credit ratio (number of upgrades to downgrades) grew to more than 2.5 times in the first four months of fiscal 2021-2022, compared to 1.33 times in the second half of Fiscal Year 2021.

Previously, India Inc’s credit outlook was described as ‘cautiously optimistic.’. About CRISIL:

Credit Rating Information Services of India Limited was initially known as CRISIL. It’s an Indian analytical firm that specializes in ratings, research, and risk and policy advice. It is a subsidiary of S&P Global, an American corporation. It was India’s first credit rating agency. In 1988, ICICI and UTI collaborated to launch the agency. It was founded with SBI, LIC, and United India Insurance Company as shareholders. In 2005, the S&P rating agency, based in the United States, purchased the majority of Crisil’s shares.

What is a Credit Rating?

In general, it is a quantifiable estimate of the borrower’s creditworthiness. It also evaluates creditworthiness concerning a particular debt or financial commitment. This rating can be issued to any entity seeking to borrow money, including individuals, estates, corporations, provincial authorities, and sovereign governments. A credit rating agency, such as Moody’s, S&P Global, or Fitch Ratings, is often in charge of credit assessment and evaluation for firms and governments. These rating agencies are compensated by the entity seeking a credit rating.

Construction and engineering, as well as renewable energy, profited from the government’s infrastructure expenditure push. At the same time, steel and other metals benefited from higher price realization and profitability, according to the rating agency.
According to the agency, Increased vaccine coverage should also help limit the effects of a third wave if one occurs.

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