Page 9 - Icra

ICRA upgrades Vedanta's long-term rating to AA on strong credit profile

Credit rating agency ICRA on Wednesday said that it has upgraded Vedanta Ltd's long-term credit rating, reflecting the company's strengthened credit profile. The long-term credit rating has been upgraded to AA from AA-. The long-term rating upgrade considers an expected improvement in the company's credit metrics, following the successful fund-raising worth USD 1 billion by the company via a qualified institutional placement (QIP) in July and an additional USD 400 million generated from the offer for sale (OFS) of Hindustan Zinc Ltd in August, ICRA said. This upgrade comes amidst significant developments at Vedanta Group that focuses on long-term strategic growth and financial strength. Vedanta Ltd has built a war chest exceeding Rs 22,000 crore, comprising mainly of existing cash reserves, stake sale and dividend from its subsidiary Hindustan Zinc Ltd. Vedanta Resources Ltd is also actively pursuing to refinance a substantial portion of its outstanding bonds, aiming to lower the

Retirement mutual funds AMC jumps 256% to Rs 29,903 cr in 5 years

Rising awareness of financial planning has fueled a 256 per cent increase in retirement mutual fund AUM in the last five years, according to a report. Factors such as rising healthcare costs, increasing nuclear families, and higher life expectancy are likely to fuel further growth in this sector, an ICRA Analytics report said. "Assets under Management (AUM) of these funds have grown by over 256 per cent in the last five years, reaching Rs 29,903 crore in July 2024, compared to Rs 8395 crore in July 2019," it said. ICRA said the growing awareness has led to a surge in the number of folios, which has increased by 17.44 per cent in the last five years to 29.36 lakh in July 2024, up from 25 lakh in July 2019. The number of schemes has also increased from 21 in 2019 to 29 in 2024. A retirement mutual fund is a specialized investment vehicle designed to provide a secure and comfortable post-retirement life. These funds invest in both equity and debt, aiming to balance wealth appreciation

Delinquencies in microfinance sector may push NBFC-MFI credit cost: ICRA

Increasing delinquencies in the microfinance sector is likely to push up the NBFC-MFI credit cost to 320-340 bps in 2024-25 from 220 bps in the previous financial year, according to an Icra report. Non-banking financial companies microfinance institutions' (NBFC-MFIs) AUM growth is also likely to moderate to 17-19 per cent in the current financial year from 29 per cent in 2023-24 amid rising concerns about asset quality, it said. The report said the robust growth in the last two years has accentuated concerns about potential overleveraging of borrowers in certain regions. "Further, farmers' protests and the Karz Mukti Abhiyan in certain regions, especially Punjab and Haryana, have impacted collections and the asset quality. "This, along with climatic conditions and operational challenges, including employee attrition, would keep the asset quality under pressure in the near term. As per Icra's estimates, non-performing assets (NPAs) have increased by 30 bps in Q1 FY2025," it ...

New mining cess may increase cost pressures for steel industry: ICRA

The power sector, which is heavily dependent on coal, may see a rise in the cost of supply by 0.6 per cent to 1.5 per cent, potentially leading to higher retail tariffs, ICRA added

New mining cess may increase cost pressure for steel makers: ICRA

The enforcement of the new mining cess by some states following the Supreme Court ruling may bring challenges for the domestic steel industry by adding to the cost pressures, according to rating agency Icra. On August 14, the Supreme Court upheld the power of states to levy tax on mineral rights and mineral-bearing land, and allowed them to seek refund of royalty from April 1, 2005 onwards. This development is poised to compress operating margins across the sector, impacting both primary and secondary steel producers, Icra said in a note. While margins of the primary steel producers could shrink by 60-180 basis points, secondary producers may face a more severe impact, with margins declining by 80 -250 basis points, based on various scenarios that cess rates could vary between 5-15 per cent. The power sector, which is heavily dependent on coal, may see a rise in the cost of supply by 0.6-1.5 per cent, potentially leading to higher retail tariffs. Further, primary aluminium producer

India's GDP growth slowed down to six-quarter low of 6% in Q1 FY25: ICRA

The credit rating agency expects India's GDP to grow by 6.8 per cent for the full fiscal year 2024-25, lower than the 8.2 per cent achieved in 2023-24

Local manufacturing will offer 25K cr annual opportunity for vendors: ICRA

Currently, India imports nearly 50 per cent of its component requirement (by value) from suppliers based out of China, Japan, and South Korea, among others

Auto companies Tata Motors, Ashok Leyland board the fully built bus boom

Financing, better after-sales services and stricter regulations fuel rising demand for FBUs

Tata Capital Housing Finance to raise up to Rs 3,500 crore via NCDs

The loan book of the company as of the end of March was Rs 51,402 crore

Discoms face financial constraints due to payment delays from govt: ICRA

The state-owned power distribution companies are facing financial constraints despite improving their aggregate technical and commercial losses, according to an Icra report. The agency has cited delays in realising payments from state government departments for power supply as one of the reasons for the constrain of discom finances and assigned a negative outlook for the power distribution segment. The all-India aggregate technical and commercial (AT&C) losses for state-owned discoms declined from 23 per cent in FY2021 to 16.5 per cent in FY2022 and further to 15.8 per cent in FY2023 due to infrastructure upgrades and higher subsidy payout. Despite this progress, losses remain particularly high at over 20 per cent for the discoms in Bihar, Jharkhand, Madhya Pradesh, Odisha and Uttar Pradesh, Icra noted. "The performance of state-owned discoms remains constrained by inadequate tariffs relative to the cost of supply, higher-than-regulator-approved AT&C losses, and a considerable

Residential sales in top cities expected to witness double-digit growth

ICRA expects the average sale price (ASP) to increase further by 5-6% in FY2025

Budget 2024: Fiscal marksmanship on display; over to implementation

On the personal income tax front, the Budget brought in some modest tweaks, which should support sentiment and consumption for salaried individuals

Cotton yarn industry expected to spin back to recovery in FY25: ICRA

The domestic cotton spinning industry will recover in FY25, growing 6-8 per cent, rating agency ICRA said on Wednesday. The recovery will be aided by 4-6 per cent volume growth and mild-realisation gains, the rating agency said. The estimated recovery would follow two consecutive years of de-growth on the back of subdued domestic demand and falling yarn realisations. Over two-thirds of the total cotton yarn produced is consumed domestically, where green shoots of recovery are visible from the downstream segments, such as ready-made garments and home textiles. According to ICRA, cotton yarn exports, which rebounded in FY24 on a lower base, are likely to normalise in FY25. "While exports will remain exposed to headwinds from sluggish global demand, a shift in sourcing preference away from other countries will offset this impact to an extent," the rating agency said. It shared that domestic cotton prices, which peaked sharply in H1 FY23 and reached a lifetime high of Rs 284 per kg,

Indian auto component industry growth to moderate in FY25, says ICRA

ICRA also expects the industry to invest Rs 20,000-25,000 crore in FY2025 for capacity expansion and technological advancements

Rising focus: Budget push likely for social sector to lift rural demand

Bumper RBI dividend may help govt increase funding

Tariff hikes signal better profitability for telcos going forward: ICRA

The latest telecom tariff hikes announced by telcos can yield additional operating profits of around Rs 20,000 crore for the industry once they are fully absorbed, ICRA said on Friday. With an improved financial metrics, the industry will have the headroom to undertake deleveraging as well as fund capex for the technology upgrade, and network expansion, Ankit Jain, Vice President and Sector Head of Corporate Ratings, ICRA said. The domestic rating agency's view comes after Reliance Jio and Bharti Airtel announced they would roll out tariff hikes - in the range of 10-27 per cent - marking the first major telecom tariff increase in the industry in a span of two-and-a-half years. "The latest round of tariff hikes wherein the telcos increased the prepaid tariffs by around 15-20 per cent will provide the traction in the (Average Revenue Per User) ARPU levels and can result in additional operating profits of around Rs 20,000 crore for the industry once these hikes are fully absorbed," ICR

Thermal power plant load factor to remain healthy at 70% in FY25: ICRA

Thermal plant load factor or capacity utilisation is expected to remain healthy at 70 per cent in FY2025 on power demand growth of 6 per cent, ICRA said on Thursday. ICRA's outlook for the thermal power segment is "Stable", following the improvement in the thermal plant load factor (PLF) and healthy demand growth, thereby improving visibility on signing of new power purchase agreements (PPAs), an ICRA statement said. Also, it stated that the implementation of the Late Payment Surcharge (LPS) scheme enabled an improvement in payment discipline from state distribution utilities (discoms) to power generation companies from August 2022. However, it stated that ICRA's outlook for the power distribution segment remains "Negative" amid limited tariff hikes and continued loss-making operations. According to the statement, ICRA projects the all-India thermal PLF level to rise marginally to 70 per cent in FY2025, from 69 per cent in FY2024, led by the growth in electricity demand and limited

What will Indians do for jewellery amid high gold prices? Agency answers

Consumers are expected to remain watchful of price movements, says ICRA

Indian Inc faces Q1 revenue uncertainties due to slow govt spending: Icra

Corporates are bracing for revenue uncertainties in the April-June period due to a slowdown in government spending and the onset of the annual monsoon season, domestic rating agency Icra said on Monday. The sequential revenue growth will taper in the first quarter of the fiscal, the agency said in a note, adding that there was a 6.5 per cent growth in revenues in the March quarter compared to the preceding December quarter. "While signs of a revival in rural demand have emerged, headwinds, such as a slowdown in the Government of India's (GoI) spending during the Parliamentary elections and onset of the monsoon period, are likely to weigh on growth in H1FY25," the agency said. "India Inc braces for revenue uncertainties in Q1FY25," it added. Its co-group head for corporate ratings Kinjal Shah said the sequential revenue growth will slow down because of a relatively high base amid a perceived temporary pause in the infrastructural activities for a major part of the quarter due to the

Domestic commercial vehicle sales likely to dip 4-7% in FY25: ICRA

In February 2024, the industry saw a slight 0.7 per cent year-on-year decline in wholesale volumes, although it managed a 5.1 per cent sequential growth