New Delhi, March 19
Indian companies are selling equity and assets to reduce high debt and improve their credit profile" declared the global ratings agency, Standard & Poor’s (S&P).
Indian companies are selling equity and assets to reduce high debt and improve their credit profile" declared the global ratings agency, Standard & Poor’s (S&P).
In a recent announcement, the" Standard & Poor’s Rating Services said more Indian companies are improving their high financial leverage and boosting their credit profiles by adopting measures such as sale of equity and assets or using their free operating cash flows to reduce debt.
"Besides raising equity and selling non-core assets, Indian companies are also divesting stakes in businesses.
S&P said the companies' main reasons for improving their financial profiles are the weak economy and high interest rates in India, which have adversely affected cash flows and debt-servicing ability. Another reason is companies are refocusing on reducing debt after years of investing significantly on rapid growth.
Standard & Poor's recently revised the outlook on Tata Power and raised the rating on Bharti Airtel after both companies started focusing on lowering debt, in addition to benefiting from favorable regulatory developments.
Tata Steel has also taken steps to reduce its leverage. Many companies in the infrastructure sector with very high leverage are also considering selling assets or stakes in subsidiaries to improve their debt-servicing ability, financial flexibility, and liquidity"