Indian Bank Merchant Banking Arm Downgraded
Icra has downgraded Indbank Merchant Banking Services (IMSL), a subsidiary of Indian bank, as the companys profitability has been affected by the significant depreciation in its large investment portfolio.
Icra has also downgraded DCM Shriram Industries (DSIL) as the operating performance of the companys main divisions have been hit, leading to a strain on its financial position. Phoenix International Finance also saw its fixed deposit programme downgraded by the rating agency.
IMSLs fixed deposit and floating rate debenture programmes was downgraded to MA from MAA-. The revised rating indicates adequate safety. The companys profitability was affected by the significant depreciation in its investment portfolio.
IMSLs fee-based income from merchant banking and related activities have dropped due to the downtrend in the capital markets. The company maintained the stability of its revenues by enlarging its hire-purchase and lease portfolio rapidly during 1995-96. However, the portfolio carried concentrated risks and there are signs of slowdown in collections over the past few months.
The fixed deposit programme of DSIL was downgraded to MB- from MA-.