Moody's Investors Service (Agency), vide their communication dated April 3, 2020 have communicated that they have placed IndusInd Bank's ("IndusInd") domestic and foreign currency issuer ratings of Baa3/P-3 under review for downgrade. The Bank's ba1 baselinecredit assessment (BCA) and adjusted BCA have also been placed under review for downgrade by the Agency.
The review for downgrade of IndusInd's ratings reflects the downside risks to asset quality amid the deteriorating macroenvironment and financial market volatility.
The bank's loan portfolio includes a relatively higher proportion of micro finance and vehicle finance loans than its peers, which are at high risk of being negatively impacted by the economic shock as customers in these segments tend to have limited buffers to withstand economic stress.
IndusInd's funding is weak when compared to other rated Indian banks, as reflected by its high deposit concentration and low share of retail deposits. This weaker funding makes the bank more susceptible to the dislocations in the financial markets, including on wholesale funding sources.
IndusInd's BCA and Adjusted BCA could be downgraded if (1) there is no meaningful improvement in growth in stable sources of funding, (2) asset quality weakens, such that either NPL ratios or credit costs increase significantly from current levels, and (3) there is a reduction in profitability at the PPI level.
IndusInd's final ratings could be downgraded if (1) its BCA is downgraded, or if (2) the sovereign rating is downgraded.
Shares of INDUSIND BANK LTD. was last trading in BSE at Rs.313.25 as compared to the previous close of Rs. 342.3. The total number of shares traded during the day was 1297280 in over 31879 trades.
The stock hit an intraday high of Rs. 350.8 and intraday low of 310.4. The net turnover during the day was Rs. 414967362.