Fitch Revises Duncans Ncd To Ind Bbb

Fitch India Ratings has revised the rating for the Rs 60 crore non-convertible debenture (NCD) of G P Goenka flagship Duncans Industries Ltd (DIL) from Ind A to Ind BBB.

The revised rating indicates that the protection factors are considered sufficient for investment but variability in risk during economic cycles is greater than that of instruments rated higher.

A press release issued by Fitch states, DIL's cash flows continue to come under strain due to factors such as a large exposure in group companies, high working capital requirements and a sizeable amount of fertiliser subsidy receivables from the central government.

The company's interest and loan repayment obligations are also heavy as it has taken additional debts in order to tide over its current liquidity squeeze.

"Low operational profits coupled with the pressures of servicing rising interest charges and a principal repayment burden have dampened the company's debt service coverage indicators. Other areas of concern include DIL's investments in group companies. The company advises that disinvestment plans are in progress however no transaction has been concluded as yet," said the release.