Ratings agency Fitch has said the Indian infrastructure industry faces a negative outlook on account of increase in macroeconomic challenges and sector-specific stresses.
"Fitch expects the ratings of project companies to remain under pressure from equity capital constraints, high interest rates, slowing GDP growth, currency depreciation, fuel shortages, weak off-takers, execution delays and prospects of slowing traffic growth for transportation," Fitch said in its recent report titled '2012 Mid-Year Outlook: Indian Infrastructure'.
The rating agency said the proportion of negative outlook, which is 24%, would have been higher, if not for the support of non-contractual sponsor and expectation of continued support in many cases.
"Fitch believes that sponsors with stretched balance sheets will struggle to raise funds for a growing number of construction projects and to support under-performing assets, largely because of the weak and volatile stock market," it said.
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