Rating agencies see a sharp rise in upgrades in Apr-Sep

Crisil-India-EconomyRating agencies are considering a sharp rise in the upgrades, reflecting a optimistic economy.

Though Crisil witnessed 253 promotes during the first half of FY11, Icra witnessed 215 upgrades during the period. In the year-ago period in contrast, they (Crisil and Icra) upgraded only 23 and 43 entities, correspondingly.

Crisil's customized credit ratio (MCR - the ratio of upgrades plus reaffirmations to reduces plus reaffirmations) has gone beyond one for the first time after a gap of three and a half years.

For both rating firms the upgrades were chiefly driven by a rush forward in ratings in communications, construction, auto and auto ancillary industries.

Ratings firms features this flow in upgrades to enhanced demand, better profitability, shorter working capital cycles; superior capital structures and caring outlook for the operating environment and the financial markets. Both debit and equity are more voluntarily available now than they were 18 months ago, from domestic and international markets.

Raman Uberoi, senior director- ratings, Crisil said that these fashions indicate that the credit quality of India's companies, which had initiating to improve in 2009-10, has remained buoyant in 2010-11.