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By Saradha | Jun 03, 2020 12:51 PM

A day after Moody’s downgraded India’s sovereign credit ratings to BAA3 from BAA2 on Tuesday, the global rating agency downgraded top 8 Indian companies including three large banks. 

TCS and Infosys are among Top companies that\'s been downgraded

TCS and Infosys were among the companies that were downgraded on Tuesday. 

Here’s the list of companies:

Oil and Natural Gas Corporation (ONGC)

Hindustan Petroleum Corporation Limited (HPCL)

Oil India Limited (OIL)

Indian Oil Corporation Limited (IOCL)

Bharat Petroleum Corporation Limited (BPCL)

Petronet LNG Limited (PLL)

Tata Consultancy Services Limited (TCS)

Infosys Limited (Infosys)


"The ratings of TCS and Infosys are constrained to no more than two notches above the sovereign rating. The sovereign downgrade to Baa3 negative therefore results in the rating downgrades of TCS and Infosys to Baa1 negative from A3 negative," Moody's said. 

The rating agency told that the coronavirus pandemic and the downgrade of the sovereign ratings are the key drivers behind companies being downgraded. 

On Monday, the same agency downgraded Indian sovereign ratings for the first time in 22 years and it was moved to the lowest investment grade. According to experts, “negative” implies India could be rated down further.

Other than these 8 non-financial firms, eleven banks and many infrastructure companies also saw negative action by the agency.

SBI, HDFC Bank, EXIM and seven infra issuers including NTPC, NHAI, GAIL and Adani Green Energy Restricted Group, by one notch are some of the banks that are listed. Issuer ratings of IRFC and HUDCO have also been lowered.

“With regard to ratings of banks, Moody's has downgraded the long-term local and foreign currency deposit ratings of HDFC Bank and SBI to Baa3 from Baa2, and the long-term issuer rating of EXIM India to Baa3 from Baa2, with negative outlook,” Times Now cited in its report.


What does it mean for the Indian Economy?

The rating is being seen as a major setback for the Indian economy. Moody’s cited that factors such as “weak infrastructure, rigidities in labor, land and product markets and rising financial sector risks” being the major cause behind the economic slowdown. 

According to Indian Express’ report, weak implementation of economic reforms over the past few years, low economic growth, deterioration in the fiscal position of both central and state governments and the rising stress in India’s financial sector are the factors that are causing economic slowdown.

அரசியல், விளையாட்டு, நாட்டுநடப்பு, குற்ற சம்பவங்கள், வர்த்தகம், தொழில்நுட்பம், சினிமா, வாழ்க்கை முறை என பலதரப்பட்ட சுவாரஸ்யமான செய்திகளை தமிழில் படிக்க இங்கு கிளிக் செய்யவும்      



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