- ALSO READ
What is credit score? Why is it important?
Why is demand for private credit on the rise?
No immediate impact from Hindenburg on Adani firms' credit profiles: Fitch
Bank credit profiles not at much risk from Adani exposure, says Fitch
Samsung forays into finance, launches credit card with Axis Bank and Visa
-
The credit quality of Indian finance companies (fincos) will continue to improve owing to the country's strong macroeconomic trends, according to S&P Global Ratings.
S&P Global credit analyst Deepali Seth Chhabria said the improvement in credit profiles of fincos will be far from uniform.
Stronger companies will likely gain market share, given their better funding access. Meanwhile, weaker players could resort to originate-and-distribute business models to tide over the liquidity stress.
Standard and Poor’s (S&P), which published a chartbook "Indian Finance Company Outlook 2023" on Monday, said “Higher inflation or interest rates than we expect remain key risks to our forecasts. Rising interest rates are likely to push up borrowing cost for Indian fincos.”
Companies with strong governance and parentage are likely to fare better than others. Emerging co-lending models are easing the liquidity stress. Bank borrowings is expected to dominate incremental funding in 2023.
The outlooks on most rated fincos are stable, reflecting their strong earnings, capitalisation, and improving asset quality.
Subscribe to Business Standard Premium
Exclusive Stories, Curated Newsletters, 26 years of Archives, E-paper, and more!
Insightful news, sharp views, newsletters, e-paper, and more! Unlock incisive commentary only on Business Standard.
Download the Business Standard App for latest Business News and Market News .
First Published: Mon, March 13 2023. 20:04 IST
RECOMMENDED FOR YOU