High Court restricts ICRA ltd from publishing Indiabulls Housing Finance Ltd credit score.

The Delhi High Court on Friday restricted a private credit rating firm, ICRA Ltd, from allowing the Indiabulls Housing Finance Ltd (IHFL) credit score public until April 6. Justice Sanjeev Sachdeva’s interim direction came on a request to stop ICRA Ltd from downgrading IHFL’s credit score for failing to include any details the credit rating company was searching for.

The court also released a notice to securities regulator SEBI and ICRA asking their stand on the plea of IHFL until April 6, the next hearing date.

Before then the court restrained ICRA “from publishing or providing effect to some decision concerning the petitioner’s credit rating (IHFL) on its website.” The direction came in on IHFL’s plea alleging that ICRA was threatening to start the credit review following a March 30 SEBI guideline easing conformity with certain regulatory norms.

IHFL reported that “required requisite information” sought by ICRA for credit review could not be received in the prevailing evolving situation.

The petition also claimed that owing to the global coronavirus pandemic, Securities and Exchange Board of India (SEBI) had relaxed the time for presenting this information in view of the lockdown.

However, ICRA Ltd was threatening to move through with the credit review and was planning to downgrade the Indiabulls Housing Finance rating rather than giving IHFL more time to provide the data, the petition has claimed.

IHFL argued that if its credit score is downgraded, it would have a significant negative effect on its financial condition and there was a possibility that debenture holders might ask for immediate debenture redemption.