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IndusInd Bank share rises 2% on rating upgrade

Boosted by the development, IndusInd Bank share price rose as much as 1.79 per cent to hit high of 986.35 on the BSE

twitter-logoBusinessToday.In | March 23, 2021 | Updated 09:47 IST
IndusInd Bank share rises 2% on rating upgrade
IndusInd Bank share price gains 2% in opening trade

IndusInd Bank share price rose nearly 2 per cent in opening deals on Bombay Stock Exchange on Tuesdday after global rating agency Moody's upgraded its outlook for the private sector lender from "negative" to "stable", citing its strong capital and core profitability. It has affirmed the long-term local and foreign currency deposit ratings of IndusInd Bank Ltd at Ba1.

Boosted by the development, IndusInd Bank shares rose as much as 1.79 per cent to hit high of 986.35 on the BSE. The stock opened higher at Rs 978.25 against previous close price of Rs 967.95 on the BSE. Meanwhile, the BSE benchmark Sensex opened 73 points or 0.15 per cent higher at 49,844.

On the National Stock Exchange, shares of IndusInd Bank were trading 1.61 per cent higher at Rs 983.75 against previous close price of Rs 968.15. The shares of private lender opened higher at Rs 977 and touched a high of Rs 985.90 in opening deals.

Moody's Investors Service has also affirmed its baseline credit assessment (BCA) and adjusted BCA at ba2. The agency said that the affirmation of the BCA and the deposit ratings takes into consideration the bank's strong capital and core profitability, as well as a relatively modest funding. The change in outlook to stable from negative is driven by improvement in its funding and capital, and marginal asset quality deterioration because of the economic disruptions from the pandemic, it said.

"Despite the economic disruption asset quality deterioration was moderate, with gross and net nonperforming loan (NPL) ratios, after including those benefiting from the Supreme Court order on loan classification, being at 2.93 per cent and 0.22 per cent respectively as of the end of December 2020, compared with 2.18 per cent and 1.05 per cent, a year earlier," Moody's said.

The agency, however, warned that the bank's BCA and ratings could be downgraded if there is a deterioration in its funding or asset quality, such that either NPL ratio or credit costs increase significantly from the current levels.

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