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Everything you need to know about India's rating upgrade to Baa2

Highlights of Moody's India rating upgrade to Baa2 from Baa3

Implications: Positive for both Equity and Debt markets as majority of the FII allocation goes by ratings and economic outlook of a country. A rating upgrade after 13 years will kick-off foreign buying in Indian equities and debt.

A Quick Summary:

  • Upgrades India`s government bond rating to Baa2 from Baa3 
  • Changes India`s rating outlook to stable from positive 
  • Ups India rating on view of steady progress in econ reforms 
  • India`s econ, institutional reforms to up growth potential 
  • High debt burden remains constraint for India rating profile 
  • GST to remove interstate trade hurdles, up productivity 
  • India is mid-way through economic, institutional reforms 
  • India reforms will foster sustainable growth 
  • See India FY18 real GDP growth to moderate to 6.7% 
  • See India FY19 real GDP growth rise to 7.5% 
  • See India`s growth at robust levels FY20 onwards 
  • India`s growth potential significantly higher than peers 
  • Expect India government debt level to remain stable
  • Expect India debt-to-GDP ratio to rise by about 1% in FY18 
  • Reforms to strengthen India`s institutional framework 
  • Govt support for PSU banks lowers India banking sector risk 
  • Govt support for PSU banks to support India`s growth 
By Moneyfront | Nov 19, 2017