The upgrade of India's foreign currency debt rating by Moody's Investor Services, after a gap of five years, is expected to give a fillip to the markets. Bankers feel corporates will be able to borrow at finer rates overseas and further boost foreign exchange inflows.
"This is a positive development. This year being the year for equities, the upgradation in rating will augur will for markets," Hemendra Kothari, chairman, DSP Merrill Lynch, said.
K V Kamath, CEO & managing director of ICICI Bank said: "The rating downgrade was not justified in the first place. The downgrade was based only on one parameter -- fiscal deficit -- to the exclusion of other parameters. One only hopes that this is the first in a series of upgrades."
Krishnamurhty Vijayan, CEO of JM Mutual, felt the upgrade will add to the confidence in the Indian economy.
"This displays nation's financial strength given the over $72 billion forex reserves. Despite the rising oil prices, India is comfortably placed and companies will now be able to borrow at a cheaper rate overseas. This will have an impact on the equity markets."
P S Shenoy, chairman and managing director of Bank of Baroda, too felt that corporates will now be in a position to bargain for finer rates when they go in for foreign currency borrowings.
He in fact said his bank is examining the possibility of raising subordinated debt in foreign currency.
The foreign currency sub-debt issue is not so much for raising funds as for gaining visibility. V Leeladhar, chairman and managing director, Union bank of India said the development was positive and should augur well for the country.
© 2025