Credit quality of Indian corporate sector experiences rebound in FY22: ICRA

Geo-political tensions may limit further improvement in FY23

The credit quality of the Indian corporate sector experienced a rebound in FY2022, on the heels of two consecutive years of pressures caused by economic slowdown in FY20 and the COVID-19 pandemic in FY21, according to rating agency ICRA.

The instances of downgrades in ratings in FY22 (at 184 entities) reflected a downgrade rate of a mere six per cent. This was substantially lower than the recent high of 13 per cent seen in FY2020 and the past 10-year average of  nine per cent. In contrast, the upgrade rate of 19 per cent (561 entities), stood at a multi-year high vis-à-vis