Of the two remaining measures, one gauge showed that total outstanding debt at 50 firms affected by the crisis remained high, while the other indicated that there’s ample liquidity in India’s financial markets.
Glimmers of improvement in the sector come almost 18 months after the first default by major lender IL&FS Group. Many in the industry, ranging from Blackstone Group Inc.-backed Aadhar Housing Finance Ltd. to Edelweiss Financial Services Ltd., see a return to normalcy soon.
The picture, however, is far from rosy for non-AAA ranked issuers. Bond spreads remain wide, and Fitch Ratings has a negative outlook for 2020, as local funding, growth and asset-quality strains weigh on non-bank financiers.
The scores attached to each of the measures have been calculated by Bloomberg by normalizing the deviation of the latest value of the indicator from its yearly average. They are assigned on a scale of 1 to 7, with 1 implying weakness and 7 showing strength.