Icra sees stable ratings reign

Credit rating agency Icra said the ratings assigned by it exhibited a higher degree of stability in 2003, reflecting the continuing phase of economic recovery and the consequent improvement in corporate performance across several industries.

Icra ratings continued to witness a decline in downgrades and an increase in upgrades. There were 14 downgrades in 2003 compared with 31 in 2002. Upgrades increased to 11 from 8.

Auto/ auto ancillary sector witnessed four upgrades, while diverse sectors (such as refinery, housing finance, bank, media, sugar and steel) accounted for the rest, the rating agency said in its report, 'Rating Transition: Update for 2003'.

Among the 14 downgraded entities, two were from financial services, two from tractor industry and the rest from sectors such as glass, electronics, plastics, housing finance, fertiliser and hotels.

Of the 14 downgrades, five were from one non-investment grade to a lower one, while three (compared with 11 in 2002) were from an investment grade to non-investment and the rest of the movements were within the investment grade.

The trend observed in 2002, whereby the decline in the number of downgrades was coupled with an increase in the number of upgrades, became more pronounced in 2003.

The inverse-CR "" ratio between downgrades and upgrades "" stood at 1.27 in 2003 compared with as high as 3.88 in the previous year, showing the higher degree of stability of the rating exercise.

The decline in the downward revision of Icra ratings was accompanied by a fall in the movement of investment grade ratings into the non-investment grade category.

Stability (re-affirmations and upgrades) of all its long and medium-term rating categories improved in 2003. This bettered the one-year average since the rating agency's inception.