NEW DELHI: Shares of Bajaj Finance and
Axis Bank fell up to 4 per cent in Monday's trade after S&P Global Ratings downgraded its rating on the two stocks to 'junk' grade.
At 9.27 am, shares of Axis Bank were trading 3.5 per cent lower at Rs 410 on BSE.
“While Axis' asset quality is superior to the Indian banking sector average, its level of non-performing assets (NPAs) will likely remain high compared to international peers. Nevertheless, we expect the bank to maintain its strong market position and adequate capitalization,” it said.
The ratings agency downgraded Axis Bank’s issuer credit rating to BB+/stable/B from BBB-/negative/A-3 earlier.
Axis Bank later clarified that S&P's rating report inadvertently mentions the bank being on
CreditWatch. S&P has confirmed that it is an editorial error and the bank is on 'stable' outlook.
"We believe worsening operating conditions following COVID-19 have increased risks for financial institutions operating in India. We expect a recession to hurt the financial sector," S&P Global said.
Shares of Bajaj Finance fell 2.70 per cent to Rs 2,825. S&P downgraded Bajaj Finance’s issuer credit rating to BB+/stable/B from BBB-/negative/A-3 earlier.
Meanwhile, shares of
Indian Bank fell 2.41 per cent to Rs 64.85. S&P has placed ratings of Indian Bank on Credit Watch as it sees a high risk that the public sector bank's credit profile could weaken over the coming quarters due to
coronavirus, as well as the merger with the weaker
Allahabad Bank.
The rating agency affirmed the ratings on the seven other banks it rates in India.