In its writ petition, housing finance company requested the court to stop Icra from proceeding with the downgrade in the scenario arising due to Covid-19.
Indiabulls Housing Finance has decided to withdraw its writ petition against rating agency Icra at Delhi High Court after Icra reaffirmed long-term and short-term rating of the company. “The rating committee of Icra has reaffirmed the long-term rating of Indiabulls Housing Finance to ‘ICRA AA’ and the short-term rating has been reaffirmed at ‘ICRA A1+’,” Indiabulls Housing Finance informed stock exchanges through a release. “Indiabulls Housing Finance has withdrawn its petition against ICRA from the Delhi High Court.”
In its writ petition, housing finance company requested the court to stop Icra from proceeding with the downgrade in the scenario arising due to Covid-19. Market regulator Securities and Exchange Board of India (Sebi) on March 30 had announced conditional relief on rating of bonds by rating agencies.
According to Sebi’s March 30 circular, a ‘delay’ in payment of interest or principal may not be treated as ‘default’ if the credit rating agency thinks that the delay has arisen solely due to the lockdown conditions creating temporary operational challenges in servicing debt, including due to procedural delays in approval of moratorium on loans by the lending institutions.
In reaffirming rating for Indiabulls Housing Finance, Icra noted strong liquidity position and established track record in domestic mortgage finance industry for the company. Icra also said there was adequate capitalisation levels and total capital adequacy ratio of Indiabulls Housing Finance stands at 29% as on December 31, 2019. Icra believes there is comfortable asset quality in retail loan portfolio of the housing finance company.
Moody’s Investors Service on March 24 downgraded the corporate family rating and the foreign currency senior, secured rating of Indiabulls Housing Finance to ‘B3’ from ‘B2’, citing “significant uncertainty” about when the housing financier will regain access to market funding. The Singapore-based global ratings agency said access to funding would remain challenging for longer than expected for Indiabulls Housing Finance.