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IndusInd Bank Slips 3% After Moody's Revises Outlook To Negative

IndusInd Bank in early trade on February 12 slipped as much as 3% to Rs. 1252.2/ share versus its previous close of Rs. 1292.2. The losses in the stock are primarily triggered by Moody’s revision of outlook on the bank’s instrument from ‘stable’ to ‘negative’. The revision points to risk of further deterioration in asset quality. From last few quarters, the bank is reporting a decline in its asset quality, mainly in the corporate segment.

Nonetheless, Moody’s has maintained its ratings on domestic and foreign currency deposits at Baa3/P-3 amid sound capital base at the bank.

In contrast to other banks, IndusInd Bank has a comparatively greater exposure to real estate segment i.e. 8% of its overall loan book as of December 31. Though there has no NPA so far from the sector it poses risk given the sluggish momentum in the housing sector. Also, the lender could be impacted due to the AGR related woes in the telecom sector.

Further in a statement, Moody’s attributed stringent terms and conditions of refinancing for borrowers as the main reason for crystallisation of NPLs or non-performing loans.

At 10:49 am, IndusInd Bank quoted at Rs.1288.00 down by Rs 4.20 or 0.33% on the BSE.

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