Moody’s Investors Service | Business Upturn

Moody’s slashes India’s GDP forecast for FY22 to 9.1% from 9.5%

Mymun Malik — Thu, 17 Mar 2022 05:15:14 +0000

Moody’s Investor Services on Thursday declared its prediction for India’s GDP to fall by 0.4 percent from 9.5 percent to 9.1 percent this year.

Last month according to the official data, Moody’s forecast of the nation’s GDP grew at a much lower percentage than expected percentage which was at 5.4 in the October-December time period. Economists had predicted the GDP growth in the 3^rd quarter of this current fiscal year at 5.7 percent.

Moody’s Investor Services’ big move comes right after a 25-basis-point rise in the coronavirus period interest rates given by Federal Reserve – this increase was seen for the first time in 3 years. The United States’ Central Bank prompted one rise each at all the remaining 6 FOMC meetings this year.

Just this year in February Moody had upgraded India’s growth rate from 7percent to 9.5 percent. Giving a stronger economic recovery prediction from the lockdown of 2020 and the second phase of the coronavirus pandemic mid-2021. Back then the GDP forecast for 2023 was retained at 5.5 percent.

This upward trajectory in February this year showed a growth prediction for 2022 meaning, Moody’s saw India’s growth at 8.4 percent for FY23 – about 60 basis points upward than what the Reserve Bank of India had predicted.

Moody’s Investor Service nicknamed Moody’s is a bond credit rating entity of Moody’s Corporation, This wing represents the conventional line of business of Moody’s Corporation. Moody’s Investors Service gives international financial real-time research on bonds released by private and public entities. Its Headquartered in New York, United States.

Moody’s allocate Baa2 rating to Reliance Industries Ltd bonds issue

Malvika Choudhary — Tue, 04 Jan 2022 06:42:17 +0000

Moody’s Investors Service on Monday assigned a Baa2 rating to the proffered USD-denominated senior unsecured bonds to be issued by Reliance Industries Limited (RIL) with a sturdy perspective.

Reliance last week announced that it aims to raise around USD 5 billion in foreign currency-denominated bonds and use the proceeds to relinquish existing borrowings. Moody’s Investors Service supply investors with credit ratings, risk analysis, and research for stocks, bonds, and government entities.

Moody’s Analytics develops software and tools that help capital markets with risk management, credit analysis, and economic research.

“RIL’s Baa2 ratings reflect the company’s large scale and dominant market position across its diverse businesses, its management’s strong execution track record and our expectation that its credit metrics will remain strongly positioned for its Baa2 rating, despite its planned investments in clean energy and other business segments,” Sweta Patodia, a Moody’s Analyst, said in the rating agency’s press statement.

The companies will share the areas of benefits in the sectors like refining and petrochemicals, digital services, and consumer retail segments. These three segments together generated around Rs 94,400 crore (USD 12.6 billion) or 86 per cent of RIL’s consolidated EBITDA for the 12 months ended September 30, 2021.

“At the same time, the Baa2 rating incorporates RIL’s exposure to the inherent volatility of refining and petrochemical margins, its single location refinery’s concentration risk and the execution risk from its diversification into consumer businesses. The rating also accommodates Moody’s expectation that RIL will use its financial flexibility to make growth-enhancing investments that will boost its business and geographical diversification”, A report released on Feb 3rd, 2015, by Moody’s investor’s service said.

Despite that, the investor’s company showcased that the RIL’s ratings can be upgraded only if the sovereign rating is upgraded because the company’s ratings are masked. The report later added that the RIL’s credit metrics are extremely strong for its sovereign-constrained rating, and only a very substantial depreciation in the credit metrics could put pressure on its credit.

Moody’s changes Bharti Airtel’s outlook from stable to positive

Ayisha Farah — Tue, 23 Nov 2021 13:20:46 +0000

On 23 November, Moody’s Investors Service reviewed Bharti Airtel Ltd.’s (Bharti) and its branch Bharti Airtel International (Netherlands) BV’s rating outlook from stable to positive.

“The outlook change to positive reflects Bharti’s improving operating performance and credit metrics which, if sustained, could support an upgrade to investment grade within the next 12-18 months,” Moody’s Senior Vice President Annalisa Di Chiara said.

“The continued expansion of profitability, particularly at its core Indian mobile business, together with a steady reduction in its balance sheet debt, is needed to mitigate the potential effect on Bharti’s credit metrics of significant investments in 5G and the compounding growth of deferred liabilities during the moratorium period,” Moody’s lead analyst for Bharti Di Chiara added.

The firm recorded a 27 per cent rise in its consolidated recorded EBITDA to Rs 272 billion for the six months ended 30 September 2021, compared with the corresponding period in 2020. Moody’s assumes Bharti’s consolidated adjusted EBITDA to grow toward Rs 570 billion – Rs 585 billion by the end of the fiscal year 2022, which ends 31 March 2022 — around 25 per cent increase over the fiscal year 2021’s.

In August 2021, Bharti declared a Rs 210 billion rights issue involving an upfront payment and two tranches being established over the next three years. The firm raised the upfront amount of Rs 52.5 billion in October 2021, which Moody expects to decrease debt.

Bharti Airtel has also allowed the four-year moratorium to pay its statutory dues due to the government holding around Rs 500 billion of spectrum liabilities and Rs 280 billion of annual gross revenue (AGR) dues — both amounts as of 31 March 2021. However, the moratorium is only till 30 September 2025.