IL&FS crisis: India Ratings acted over 2 years after cautioning on ITNL

On Feb 8, it said ITNL's leverage ratio in the financial year 2016-17 improved 7.35 times, but added it was higher than what the agency expected

Rating agency India Ratings last week downgraded IL&FS Transportation Networks (ITNL) to default. But it was as early as June 2016 that the agency may have anticipated stress and could have seen a case for a future downgrade of the company. But it did not act until February this year. 

In its rating note on ITNL dated June 6, 2016, India Ratings affirmed its ‘A’ rating to ITNL. However, it changed its outlook from stable to negative on the company. On its note on ITNL, India Ratings said, “The ratings could be downgraded if the visibility of leverage reducing in