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Thursday 28 May 2020

B3: Indiabulls’ new rating by Moody’s, fundraising challenges cited

Indiabulls is these days mired in a case related to alleged roundtripping of money between it and former head of Yes Bank Rana Kapoor

Editorials

Reforms By Modi Run Into Tired Socialist Criticism

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In India

अदिति सिंह ने ट्विटर से हटाया पार्टी का नाम

प्रवासी मजदूरों की बस द्वारा अवाजाही के प्रकरण मामले में रायबरेली सदर की विधायक अदिति सिंह ने आईएनसी पर सवाल उठाए थे

जम्मू-कश्मीर में पुलवामा जैसा आतंकी हमला दोहराने की साजिश नाकाम

जम्मू-कश्मीर पुलिस और सुरक्षा बलों ने बम डिस्पोज़ल यूनिट को बुलाने से पहले आस-पास के पूरे इलाके को लोगों को वहां से हटा दिया था

International rating agency Moody’s downgraded on 24 March Indiabulls Housing Finance with a negative outlook, citing challenges in raising funds. The corporate family rating (CFR) and foreign-currency senior secured rating of the firm have been downgraded from B@ to B3.

The foreign and local currency senior secured MTN programme ratings of the company has been downgraded to (P)B3 from (P)B2 as well.

The rating agency believes Indiabulls’ asset quality will continue to weaken. “The downgrade and negative outlook reflect our expectation that Indiabulls’ access to funding will remain challenging for longer than expected,” Moody’s said in a note.

Financial firms like Indiabulls are finding the wholesale funding markets remain largely closed to them following the Reserve Bank of India’s imposition of a moratorium on Yes Bank. It’s happening due to the broader risk aversion currently prevalent in financial markets globally as well.

“There is significant uncertainty around when Indiabulls will regain access to market funding,” Moody’s said. It explained that the company’s reliance on asset sales as the primary source of liquidity to repay maturing obligations would increase.

Indiabulls’ loan book has been shrinking since December 2018. New disbursements have reduced considerably. “As a result, Indiabulls’ profitability will reduce because of lower net interest margins and higher cost-to-income ratios,” Moody’s said.

The housing finance company’s asset quality has also deteriorated. Indiabulls’ gross non-performing loans (NPL) ratio registering 1.94% at the end of December 2019 compared to 0.88% at the end of March 2019.

“While the bulk of the deterioration has come from the real estate developer book, there has also been a deterioration in the home loans and loans against property (LAP) segments. The capital remains a key credit strength though, with Indiabulls’ balance sheet likely to contract over the next 12 months as the company looks to conserve liquidity,” the rating agency said.

Indiabulls is these days mired in a case related to alleged roundtripping of money between it and former head of Yes Bank Rana Kapoor who is in the custody of the Enforcement Directorate for money laundering and other cases of fraud.

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अदिति सिंह ने ट्विटर से हटाया पार्टी का नाम

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