Utkarsh Small Finance Bank Limited has informed the Exchange about Credit Rating
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CARE Ratings has downgraded Utkarsh Small Finance Bank's Tier II Bonds from CARE A+ (Negative) to CARE A (Stable). The downgrade applies to two tranches of Tier II Bonds worth ₹15 crore and ₹200 crore. CARE cited deterioration in the bank's asset quality and profitability as the reason for the rating action. While the rating was downgraded by one notch, the outlook was revised from Negative to Stable, suggesting some near-term stability. The total Tier II Bond impact across both tranches is ₹215 crore.
This is a negative signal for shareholders as it reflects weakening fundamentals — particularly asset quality and profitability concerns at the bank. A lower credit rating may increase the bank's future borrowing costs, though the stable outlook provides some reassurance that further immediate downgrades are unlikely.