Business Standard

Icra downgrades GMR Infrastructure's short-term loans

Related News

Rating agency has downgraded its rating for Ltd’s short-term loans to “A3” from “A2+” on growing regulatory and political risks impacting its airports and energy assets.

The rating revision also takes into account the funding risks arising from group’s considerable equity and debt servicing commitments. 

It also cut rating for term loans and non-fund facility to “BBB” from “BBB+”. The outlook on long-term rating has been revised to negative from stable.

Icra in a statement said GMR has low cash balances. The cash generation from operating assets and assets which will be commissioned in near term is expected to be inadequate.

The company is expected to largely depend on debt to meet its equity and debt-servicing commitments. Such dependence on leveraging would result in heightened financial and refinancing risks, Icra added.

The group has capex plans aggregating Rs 32,000 crore over the next two-three years, necessitating incremental equity investments of approximately Rs 3,600 crore.

The group also has substantial debt servicing commitments to the extent of Rs 5,516 crore over the next three years (debt raised to fund equity commitments and which is therefore not backed by project cash flows).

While GMR Infra has sufficient cash/liquid investments (Rs 2,700 crore) to meet immediate equity/debt servicing requirements, substantial additional funds would need to be tied up.

The group has divestment plans across several sectors. But, putting such plans into action is expected to be challenging given the scale of funds planned to be so raised and the continued weak market conditions.

Read more on:   
|

Read More

RBI to infuse Rs 8,000 cr through OMO on Jan 4

"Consistent with the stance of monetary policy and based on the current assessment of prevailing and evolving liquidity conditions, the Reserve Bank ...

Quick Links

More news from Finance Rss icon

Banks seek changes in law for better loan recovery

To improve the loan recovery performance of banks in Odisha, the state level bankers' committee (SLBC) has urged the state finance department to ...

SKS Microfinance completes Rs 316 crore securitisation

SKS Microfinance, the only listed microfinance company in the country, has completed its first securitisation transaction of Rs 316.25 crore in ...

RBI advisor says rate cut may be possible in March

"Real interest-rates are becoming more and more positive, which would be severely disinflationary, and that means we have to cut rates," said ...

Back to Top