Business Standard

Shriram Transport shares tank 16 pc after ratings downgrade '


Press Trust of India New Delhi
Shares of Shriram Transport Finance Company Limited (STFC) on Monday plunged 16 per cent after Fitch Ratings downgraded long-term issuer default ratings of the NBFC alongwith two others on increasing macro-economic challenges following the coronavirus pandemic.
These non-banking financial companies are Shriram Transport Finance Company Limited (STFC), Muthoot Finance Limited (MFL) and India Infoline Finance Limited (IIFL).
Scrip of Shriram Transport declined 15.92 per cent to close at Rs 609.10 on the BSE. During the day, it dropped 17.73 per cent to Rs 596.
Muthoot Finance fell by 1.01 per cent to close the trade at Rs 612 after falling 4.73 per cent to Rs 589 in intra-day.
The long-term issuer default ratings (IDRs) of STFC and MFL have been downgraded to BB from BB+, while that of IIFL to B+ from BB+.
"The rating actions reflect increasing macro-economic challenges for the Indian non-bank financial institution (NBFI) sector. These include the growing effects from measures to contain the COVID-19 pandemic, which will compound the tightening in funding conditions for NBFIs in recent weeks," it added.
The RBI's recent liquidity and regulatory support measures should help to improve the funding environment in near-term, but it also underlines the severity of the situation and Fitch sees continued uncertainty in the coming months nonetheless, the global ratings agency said.
Meanwhile, the broader market also depicted a weak trend as the BSE benchmark tumbled 1,375.27 points to close at 28,440.32.

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First Published: Mar 30 2020 | 5:30 PM IST

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