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ICRA has downgraded the long-term rating outlook of Indiabulls Housing Finance Ltd (IBHFL) to negative and reaffirmed the short-term rating.
The revision in the outlook for the long-term rating reflects IBHFL’s increased risk profile, given its investment in YES Bank’s additional tier-1 (AT-1) bonds and loans to companies belonging to the erstwhile promoters of the bank, and the continued challenges in resource mobilisation, which are likely to intensify further, given the increase in risk aversion and the widening credit spreads in the market.
It also factors in the likelihood of an increase in the company’s credit costs, while the recoveries during the quarter could partly offset the impact. Shares of IBHFL are currently hovering around ₹97.45, up 0.8 per cent, on the BSE.
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