Due to upgrades from S&P Global Ratings, several banking and financial stocks, including HDFC Bank, SBI, and ICICI Bank, are likely to be in focus on Monday, August 18.
S&P Global Ratings, on Friday, 15 August 2025, upgraded the long-term issuer credit ratings for seven Indian Banks and three financial institutions, one day after increasing India’s sovereign credit rating, reported the news agency PTI.
S&P Global upgraded the credit ratings of seven Indian banks: State Bank of India (SBI), ICICI Bank, HDFC Bank, Axis Bank, Kotak Mahindra Bank, Union Bank of India, and Indian Bank.
Bajaj Finance, Tata Capital, and L&T Finance were the three finance companies which also received a credit rating upgrade on Friday.
On Thursday, S&P Global Ratings also raised the credit ratings on ONGC, Power Grid, NTPC, and Tata Power to ‘BBB’ from ‘BBB—’. The outlook is stable.
S&P upgrades India’s sovereign credit rating
Highlighting the Indian economy’s resilience and sustained fiscal consolidation, S&P Global Ratings, last Thursday, raised India’s long-term credit rating by a notch. It was India’s first sovereign rating upgrade from S&P Global Ratings since 2007.
Indian government debt, which has remained at S&P’s lowest investment grade of “BBB—” for 18 years, now stands at a higher level of “BBB.”
S&P expects India’s GDP to grow at a 6.5 per cent rate in FY26 and foresees a continued momentum over the next three years. The rating agency believes that the impact of recently imposed US tariffs may be limited on India due to the country’s large and resilient domestic consumption base.
According to PIB, the rating agency suggested that a narrowing fiscal deficit and continued public investment could support further positive rating actions.
In the recent past, Morning Star DBRS, another rating agency, has also upgraded India to “BBB” status.
What does S&P’s upgrade mean?
The S&P upgrade highlights India’s increased creditworthiness and the strength of the Indian economy.
The upgrade may lower the government’s borrowing costs, which could allow banks and NBFCs to borrow funds at cheaper rates. Lower interest rates could trigger strong demand for credit, enhancing banks’ profitability.
Strong economic momentum, due to increased demand, is also expected to augur well for the power and energy sectors.
According to Madhavi Arora, Chief Economist at Emkay Global Financial Services, a rating upgrade to a higher investment-grade category of BBB can open the door for new pools of global funds’ capital.
“All of this will lower India’s risk premia and consequently, lower cost of funding across macro agents’ curves, including corporates —especially those borrowing abroad,” said Arora.
“Overall reduced cost of capital for the economy would help India finance its fiscal and CAD and could trigger positive externalities,” she added.
Experts say stocks such as ONGC, Power Grid, NTPC, Tata Power, SBI, ICICI Bank, HDFC Bank, Axis Bank, Kotak Mahindra Bank, Union Bank of India, and Indian Bank could stand as key beneficiaries.
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