The rating upgrade by international rating agency Standard & Poor's is likely to be cheered by the stock markets. Another big beneficiary of the rating upgrade is Power Finance Corporate (PFC), which is coming out with its initial public offer soon. S&P, in its latest revision today, upgraded the ratings of public sector company to the soverign grade. |
"The upgrade by S&P is a big positive for the markets. Though primarily, it would impact only bond instruments, indirectly, the S&P move would result in more foreign fund inflows," said Mukarram Bhagat, CEO of ASK-Raymond James. |
S&P raised the sovereign credit ratings on India to investment grade, expressing its confidence on the country's "strong economic prospects and deep capital market." |
Ravi Mohan, managing director and CEO of rating agency and S&P's local partner, Crisil, said it was the paradigm shift in the thinking and perception about India that resulted in the investment grade. |
"Today's revision also removes confusion about India's rating as Fitch and Moody's were having investment grade rating for India, while S&P was having below investment grade rating for the country. That confusion is no more there as all agencies now have investment grade rating on India. The rating revision will help corporates raise funds from abroad at slightly lower rate and lead to greater fund flow of FDI and FII investments. Internationally many funds invest only in markets that have investment grade rating," he said. |
Pratip Shah, chairman of IndAsia Fund Advisors, however, said the markets had been giving a better perception on India, though it was only now that S&P chose to agree with the market view. "The S&P rating upgrade is welcome, but it should have happened much earlier," he felt. |
The markets had a lukewarm session on Monday as benchmark Sensex settled at 70 points lower at 14,212. The sentiment on Wednesday morning would also be driven by the outcome of the Tata Steel's bid for Corus Steel. |
Sanjay Sakhuja, partner of Ambit Corporate Finance said S&P's revision would help companies reduce their funding costs by a few basis points. He, however, felt that the impact would not be significant for big credit borrowers. |
Amrish Shah, executive director of Pricewaterhouse Coopers (PwC) said: "The impact is going to be positive in both ways. Indian companies will get better perception from global investors, as the rating revision. The world is getting more and more confident about India. Companies waiting to invest in India will get higher comfort level." |