Morgan Stanley downgrades India's IDFC as funding costs rise

Written by Reuters | Mumbai | Updated: Jul 24 2013, 19:45pm hrs
Morgan StanleyMorgan Stanley downgrades India's IDFC as funding costs rise
Morgan Stanley downgrades India's IDFC Ltd to "equal-weight" from "underweight" and cut its price target to 100 rupees from 150 rupees. The downgrade comes as Morgan Stanley cuts its loan growth outlook for IDFC and cites an increase of 125 basis points in three-month commercial papers, which would make funding more expensive.

The investment bank adds asset quality risk is also increasing for IDFC as the economy slows and rates rise. IDFC shares are down 8 percent to 118.30 rupees, in a session marked by declines across financial stocks after fresh RBI measures to curb liquidity.