Senior public and private sector bankers said rating agencies — Icra, CARE and India Ratings — have been monitoring the activities of IL&FS, a holding entity of group, and its subsidiaries for long.
The expectation is that agencies will pick up signals about problems in time and issue a rating watch, followed by rating action. They have failed to act in time in this case.
They were rating bonds and loans of IL&FS and group entities at higher investment grade such as “AAA” until July. Now, IL&FS loans and bonds carry a “Default” grade.
Rating downgrade has a material impact on the bottom line of lenders.
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