Downward re-rating triggers for infra sector as Covid-19 strikes again

Developers grappling with labour shortage and getting construction material to sites could be among a list of problems.

The 2021-22 Budget banks on a big infrastructure push, but the deadly second wave of Covid-19 cases may lead to a downward rerating of many projects due to delays and other issues.

Developers face shortages and logistical problems with getting labour and construction material to sites. There could be bottlenecks caused by drops in steel and cement production, due to oxygen shortage. Financing could also be a problem as the vast government borrowing programme sucks resources out of the bond market.

Even before the second wave reached its April peaks, many projects faced delays. In March, the MOSPI reported that,