S&P upgrades SBI, ICICI Bank, 8 firms

Standard & Poor's, in line with the revision of outlook on sovereign rating, today raised its outlook on the ratings of State Bank of India (SBI), ICICI Bank, Export-Import Bank of India and eight Indian corporates.

The outlook on the long-term foreign currency ratings on the State Bank of India (foreign currency BB/Positive/B, local currency BB+/Stable/B) and ICICI Bank (foreign currency BB/Positive/B) was raised to positive from stable.

The outlook on the State Bank's BB+' long-term local currency rating was also revised to stable from negative. The agency affirmed the counterparty credit ratings on SBI and ICICI Bank.

The Export-Import Bank of India's 'BB' long-term foreign currency rating was raised to positive from stable and that of 'BB+' long-term local currency from negative to stable.

It also revised the outlooks on its long-term foreign currency corporate credit ratings on Indian Oil Corporation (BB), Indian Railway Finance Corporation (BB), National Hydroelectric Power Corporation (BB), National Thermal Power Corporation (BB), Power Finance Corporation (BB), Reliance Industries (BB) and Tata Power Company (BB) from stable to positive.

In addition, the outlook on the 'BB+' long-term local currency rating on National Hydroelectric Power Corporation too was raised to stable from negative.

In December last year, S&P had raised the foreign currency borrowing outlook for Indian Oil Corporation, Indian Railway Finance Corporation, National Hydroelectric Power Corporation, National Thermal Power Corporation, Power Finance Corporation, Reliance Industries and Tata Power from negative to stable.

Despite the upgrade, the stock market did not react positively to the news. The Bombay Stock Exchange Sensex fell 0.61 per cent (30.97 points) to close at 5033.69 amid low volumes.

Hemant Rustagi, CEO, Wiseinvest Financial Advisors, said, "The market was not enthused by the upgrade as worries over inflation and higher international oil prices persist, despite oil prices easing marginally on Monday." He added that a lack of a strong positive trigger is hampering the market, though most funds and institutions still believe in the India growth story.