Brookfield's equity infusion crucial for Indostar Capital in Q1 FY21: CARE

An equity infusion of Rs 1,225 crore by Brookfield Business Partners into Indostar Capital Finance Ltd (ICF) in first quarter of FY21 is crucial to ensure adequate liquidity when NBFC sector is facing challenges in resource mobilization after COVID outbreak.

Rating agency CARE has placed the ratings of Indostar Capital’s ted on credit watch with developing implications. The long-term debt carries “AA-“ rating.

Besides challenges faced by wholesale NBFC in particular, the credit costs (amount to be provided for stressed assets), are likely increase post outbreak of COVID 19. The said equity infusion would be critical for ICF as it