S&P cuts rating outlook of TCS, Wipro, Infy

Standard & Poor's on Wednesday downgraded the rating outlook of as many as 21 entities spanning across top banks, software exporters and public sector undertakings following the agency's revision of country's sovereign outlook.

State Bank of India, ICICI Bank, HDFC, NTPC, SAIL, TCS, Infosys, Wipro and IIFCL are among the companies whose rating outlook has been slashed to negative from stable by S&P.

The global rating agency's move reflects the "outlook on the sovereign credit rating on India", which too has been lowered to negative, citing slow fiscal progress and deteriorating economic indicators.

S&P has also revised downwards the rating outlook of Export-Import Bank of India, Indian Railway Finance Corp, Power Finance Corp, NHPC, Axis Bank, Bank of India, IDBI Bank, Indian Overseas Bank, Indian Bank, Syndicate Bank, Union Bank of India and IDFC.

"We have equalised the ratings and outlooks on India EXIM, IIFCL, and IRFC with the sovereign rating and outlook. This reflects the entities' integral linkages with, and their critical roles to, the Government of India," S&P said.

According to the agency, outlook rating of NTPC, NHPC and SAIL, are highly influenced by the sovereign rating given the entities' sensitivity to government intervention in the event of financial distress.

S&P has also affirmed the 'BBB-' long- term issuer credit ratings of all the 21 entities.

Regarding banks, the agency cautioned that their rating could also be lowered if similar steps are taken for sovereign rating.

Experts also said that S&P's move would not significantly impact the cost of resource mobilisation of the Indian banks since they raise bulk of the money from the domestic sources.

Lowering the rating outlook of the top three software exporters - TCS, Infosys and Wipro - the agency said it "reflects our 'BBB+' transfer and convertibility (T&C) assessment of India.