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SEBI on Wednesday met executives from credit rating agencies to discuss issues related to identifying the stress points for India Inc and the rating agency expectations on corporate performance going forward.
About 15-20 members from SEBI met seven officials from credit rating agencies at SEBI Bhavan for about 75 minutes. It was chaired by Ananta Barua, ED, SEBI.
“SEBI asked the rating agencies about the areas that it should be looking at and the regulator’s tone was forward looking and positive. Most of the talking was done by the invitees,” said a source close to the development.
Issues related to potential risks emanating due to credit shifting from banks to bond market in India was discussed.
The discussion also included issues on macroeconomics such as the impact and risks related to downgrades of Chinese yuan and Brazil.
India Inc has a lot of unhedged exposures in the overseas markets. Discussions on default in offshore markets triggering stress on unhedged corporate exposures was done.
For instance, there was talk on a lot of entities looking at external commercial borrowings (ECB) from banks which were unhedged and any depreciation in the rupee would affect India Inc besides discussing its subsequent impact on the corporate bond market.
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