Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Market / Stock-market-news/  S&P places Shriram Transport Finance rating on ‘CreditWatch’
BackBack

S&P places Shriram Transport Finance rating on ‘CreditWatch’

S&P Global Ratings placed the rating of Shriram Transport Finance on 'CreditWatch' following the announcement of a proposed merger of IDFC and Shriram Group of Companies

On 8 July, the boards of Shriram Group and IDFC entered into an exclusivity arrangement for 90 days to jointly explore an opportunity for a merger. Photo: BloombergPremium
On 8 July, the boards of Shriram Group and IDFC entered into an exclusivity arrangement for 90 days to jointly explore an opportunity for a merger. Photo: Bloomberg

New Delhi: S&P Global Ratings on Wednesday placed the rating of Shriram Transport Finance Co (STFC) on ‘CreditWatch’ following the announcement of a proposed merger of the IDFC group and Shriram group of companies.

“Any rating impact from the potential merger of Shriram group’s financial services businesses with the IDFC group would depend on the final terms of the deal, including the post-transaction structure, pricing and financial profile of the merged group," S&P Global Ratings credit analyst Nikita Anand said.

The rating impact will also depend on “STFC’s strategic importance within the group following the merger". In a statement, S&P said it had placed its ‘BB+’ long- term and ‘B’ short-term issuer credit ratings on STFC on CreditWatch with developing implications. CreditWatch, which deals in potential direction of a short-term or long-term rating, marks out identifiable events and short-term trends that cause ratings to be placed under special surveillance.

On July 8, the boards of Shriram Group and IDFC entered into an exclusivity arrangement for 90 days to jointly explore an opportunity for a merger.

S&P said the proposed merger requires approval from several regulatory bodies, along with approval from both groups’ shareholders.

“Given the complex nature of the transaction involving several listed entities, these approvals can take time. We believe the proposed merger could take up to 12 months to materialise," the rating agency said.

“We expect to resolve the CreditWatch placement over the next three to six months after we receive more details regarding the merger, including the expected final group structure and associated changes in management and strategy," it added.

S&P is also going to look into the creditworthiness of the merged entity and STFC’s strategic importance within the group.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 12 Jul 2017, 01:52 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App