Amid strong export demand and improved balance sheets in the past six months, India Ratings and Research (Ind-Ra) in its latest report has said that the partial-to-full lockdowns imposed by various states to contain the second wave of the pandemic are likely to have a muted impact on the overall business environment.
As per the report, retail borrowers and small business will see stress, leading to a build-up of potential asset quality issues in the unsecured lending books of lenders and an increase in softer delinquencies in the MFI segment. It further noted that the assessment could change if there were to be a stringent national lockdown or a protracted normalisation of activities due to the pandemic.
Besides, Ind-Ra said that the second wave of the pandemic infections will be less disruptive than the first wave for overall businesses, despite the daily caseload reaching more than four times of the peak level seen during the first wave. This is because the administrative response is likely to be confined to the regional/local lockdowns and containment zones.