Amid FY23 Union Budget's focus on investments, leading domestic credit rating agency Crisil on Wednesday said that the capital expenditure is "not as high as it sounds". It, however, was quick to add that considering that governments usually tend to cut capex during a crisis, the government has maintained its focus on growth-spurring initiatives amid the pandemic. The research wing of the agency said, if one excludes the Rs 1 lakh crore of loans to states for capex included in the headline figure of Rs 7.50 lakh crore or 2.91 per cent, the actual spend in FY23, will go down to 2.58 per cent of GDP, which is barely at par with the revised estimate of FY22.
Private participation remains lacklustre.
Any government support or incentive to help exporters deal with high freight and insurance costs is unlikely.
The economic costs now beginning to show up in the hard numbers are far worse than initial expectations.
Truck movements across the India-Bangladesh border are on the rise, with increasing rentals signalling a trade recovery between the two South Asian nations. Yet, geopolitical tension looms large, with Bangladesh now under an interim government for nearly two months.
Banks have played a critical role in infrastructure financing.
Ratings agency Crisil on Monday cut its FY14 growth forecast for India to six per cent from the earlier 6.4 per cent citing a variety of reasons, including the high lending rates, weaker pick-up in consumption and issues around mining and project clearances.
The liquidity will move into deficit after advance tax payments and GST outflows. It will rebound in October because of government spending.
Amid low growth elsewhere, gross value added (GVA) growth in agriculture and allied activities recovered during the second quarter of the current financial year (Q2FY25) to 3.5 per cent year-on-year (Y-o-Y) due to strong monsoon. Experts feel that the rains have laid the foundation of an even better GVA performance in subsequent quarters. GVA growth in the first quarter of FY25 was 2.0 per cent.
Bank credit is likely to grow at a four-year high of 11-12 per cent in fiscal 2023, on the back of better economic growth and budgetary support from the government, according to a report. In the fiscal ended March 2022, bank advances have likely grown at 9-10 per cent. "Healthy economic growth and budgetary support from the government should lift bank credit growth by 200-300 basis points to 11-12 per cent this fiscal," Crisil Ratings said in the report. The higher credit growth expectation is also supported by the improved resilience of the banking system, it added.
The Television Eighteen (TV 18) Group has acquired the assets and staff of Crisil MarketWire from rating agency Crisil.
Rating firm Crisil revised downwards its GDP growth forecast to 5.5 per cent this fiscal from its earlier estimate of 6 per cent, citing reduced likelihood of monetary easing going forward due to falling rupee.
The Indian IT industry will stage a "strong recovery" in 2021-22 with a revenue growth of up to 11 per cent, ratings agency Crisil said on Wednesday. The recovery will be led by increasing outsourcing and accelerating digital transformation services mainly in sectors such as banking, financial services and insurance (BFSI), healthcare, retail and manufacturing, it said. As per Nasscom, the IT services industry grew 2.7 per cent to $99 billion in 2020-21.
Amid the political blame game over Bengal's potato ban, which led to shortages in Jharkhand and Odisha, Uttar Pradesh farmers are the unlikely winners.
The agency attributed the sharp revision to various high-frequency indicators showing a softness and partly blamed the same to reforms like GST, real estate regulation, and the bankruptcy code which are still a "drag" on the economy.
"We will raise Rs 300 crore via bonds of two-, three- and five-year tenures. This will be our maiden bond issuance and is part of our effort to widen funding sources," says Vimal Bhandari, executive vice-chairman and chief executive officer (CEO), Arka Fincap. The firm, a subsidiary of Kirloskar Oil, is only five years old and small (assets of around Rs 5,000 crore with an "AA" rating), but the response to this float will be closely watched: It would be the first by a non-banking finance company (NBFC) after Mint Road upped the risk weights on bank exposures to them by 25 percentage points. The move by the Reserve Bank of India (RBI) has caught NBFCs off guard even though the issue had been flagged by Governor Shaktikanta Das with their corner-room occupants (and that of banks) in July and August 2023 - on consumer credit and the dependency on bank borrowings.
S&P, which holds 51.4 per cent in Crisil, named Roopa Kudva as the region head for South Asia. Kudva would be part of S&P's Asia-Pacific executive committee, the agency said in a statement. She would continue as the managing director and CEO of Crisil.
Elaborating on its not-so-pleasing outlook on the economy, Crisil said private consumption demand, which has been the bulwark of growth for the last few decades, grew by a pale 3.1 per cent in the first quarter as against 7.2 per cent growth in the preceding quarter.
The report mentioned that the government spends 2.2 per cent of the GDP on pension bill.
Credit ratings agency Crisil on Tuesday said it expects to increase its rated portfolio in the small and medium enterprises (SME) segment by 10 folds in the next 3-4 years.
ating agency Crisil on Wednesday said it has signed an agreement to buy the business of US-based Knowledge Process Outsourcing Industry Pipal Research Corporation for $12.75 million.
India's leading steel companies hope the Modi 3.0 Budget will continue the massive capital expenditure currently underway, focusing on infrastructure development, manufacturing, and fair trade. The infrastructure segment is the largest steel user, and the government's focus has fuelled steel consumption even as international markets have underperformed. According to provisional statistics, steel consumption grew 13.6 per cent in FY24, reaching 136 million tonnes (mt), according to a CRISIL report.
Mining conglomerate Vedanta Limited has received approvals from the majority of its creditors for a proposed demerger of businesses, marking an important step in the company's plan to split into six independent listed companies. "I am happy to let all of you know that we have received the 52 per cent plus the additional percentage, which is required for us to reach 75 per cent. "We have crossed that threshold as well. Most of the lenders have approved it," a senior Vedanta executive said in a recent bondholder conference call.
CRISIL also expects the average Wholesale Price Index inflation to be higher at around 8 per cent as against of 7 per cent estimated earlier.
"Profitability of companies will be negatively impacted due to rising input prices, as the ability of companies to pass on these hikes to customers is limited. Further, higher interest rate outlook would lead to lower investment, as profitability margins will be reduced," Crisil Ratings Director Pawan Agrawal said over the conference call.
For exporters, there will be lower realisations because of rupee appreciation, the report added. Crisil's modified credit ratio for FY 2008 was at 0.97 times, that is, downgrades outnumbered the upgrades during the year. However, credit quality pressures does not automatically mean more defaults.
Indian firms have become more credit-worthy in the current fiscal on better profitability and funding access, rating agency Crisil said on Thursday.
RBI's draft guidelines on computation of base rate, if implemented in its current form, will significantly impact the profitability of banks.
Only borrow an amount that can be repaid comfortably. The ratio of total EMI to take-home salary should not exceed 40 per cent.
Rating agency Crisil has revised downwards the Indian GDP growth forecast for FY09 to 8.1 per cent, from the earlier 8.5 per cent, in view of the high inflationary conditions, interest rate and global growth outlook.However, despite the growth deceleration, Crisil expects inflation to stabilise at an average 5.5 per cent in 2008-09 in a normal monsoon scenario, the agency said.
The agency welcomed the Rs 1.70-lakh crore package announced by Finance Minister Nirmala Sitharaman earlier in the day but said more measures like loan forbearances for small businesses and households are necessary.
The government on Tuesday proposed reducing the long-term capital gains tax on immovable properties to 12.5 per cent from 20 per cent, but removed the indexation benefits to adjust for inflation, a move experts termed as "negative" for sellers.
International rating agency Standard & Poor's has become the majority shareholder of Indian credit rating agency Crisil Ltd with 58.5 per cent stake, after it acquired 49.07 per cent shares during its recent open offer.
It could add to pressure on inflation, especially food inflation, which was already high, it said.
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