Saloni Subha ( Intern Journalist ) Three out of four nonfinancial that used the loaned repayment moratorium are rated below investment grade. These Industries are struggling with the slowest economy even before the pandemic informed rating agency Crisil in a report on Monday.
According to Crisil more than 2,300 non-financial companies, from it’s rated portfolio, which availed of the moratorium to hide over the cash flow challenges from the pandemic, after categorizing them by rating, sector, and size. 75% of the entities that availed on the moratorium have a sub-investment grade rating. The severe curtailment in business activity in the June quarter reduced cash flows that’s why the moratorium came as a big relief for these Industries, he further added.
Thus, only one out of four Industries under moratorium is rated in the business-grade and took resources to the moratorium to build a liquidity cushion for exigencies in the future.
According to Subodh Rai, the senior director of Crisil rating, the companies in the sector are affected most by the covid-19 have been the keenest to use moratorium. “Whereas every sector has been affected by the pandemic, the majority of those with lower resilience have availed of the moratorium. Some among the more resilient ones have also done so”, informed Rai.
About Post Author
