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Credit Raters Keep Missing Big Indian Company Defaults

  • Some companies see rating cuts of 10 levels after the default
  • Questions on quality of ratings may keep some investors away
Updated on

Mounting debt failures in India have been catching rating companies off guard, underscoring continued challenges a year after the landmark failure of shadow bank IL&FS increased scrutiny of the industry.

Defaults at companies including Dewan Housing Finance Corp., Cox & Kings Ltd. and Altico Capital India Ltd. have occurred even as their long-term ratings indicated very low to moderate risk of non-payment.