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Rating agency

has forecast India’s GDP growth for this fiscal at 9.5% but it expects some adverse impact in the fourth quarter due to the spread of Omicron variant of Covid-19 and a high base effect, it’s MD & CEO Amish Mehta told the Times of India in an interview.

He also expects the services sector to pick up decisively, leading to broad-based growth.

While highlighting the fact that there is easy liquidity in the market, Mehta says that through the pandemic, market shares have consolidated, which might have contributed to a resilient market. “Smaller companies have lost out due to supply chain disruptions, funding issues, and lack of business continuity plans. Another interesting aspect is that consumers seem to be focusing more on quality and reliability than price. That is why you see the top two or three companies in each sector doing well,” he said.

The Securities and Exchange Board of India (SEBI) now requires rating agencies to track IPO end-use, which Mehta says is a new era. “It’s something that banks and financial institutions (FIs) have done earlier. I feel this shows the regulator’s confidence in the ability of rating agencies to carry out such a critical activity,” he added.

Mehta says that the Insolvency and the Bankruptcy Code (IBC) has now established a deterrent- that promoters can even lose their indebted companies if they remain in default. “This has improved credit discipline, and we see more intent towards timely servicing of debt. When the pandemic began, there was talk about how things would go downhill for businesses. But timely interventions by the government and the RBI, lenders and corporates themselves have mitigated a lot of the impact,” he says.

Speaking on some of the emerging trends in the corporate sector, Mehta notes that companies have been investing to create robust and diversified supply chains, accelerating digitalisation on the customer-experience side, and automating processes since the pandemic broke out.

“The ongoing data explosion is also leading to greater demand for AI and machine language-based solutions. I am also seeing sustainability rapidly becoming an important agenda for corporates. Banks and FIs are integrating environmental, social and governance (ESG) factors into their risk frameworks for investment and lending decisions,” he added.