The rating action also takes into account relatively slow bookings and funding risks associated with the company’s ongoing projects. Further, the sales velocity and collections are expected to remain low. This may put pressure on the cash flows, necessitating refinancing or mobilisation of additional funds to repay the debt obligations.
The rating downgrade factors in high refinancing risk given consolidated ongoing project debt repayments of Rs 663 crore from July 2019 to March 2020 and Rs 417 crore in FY21, as there is a slowdown in sales.
It has already paid Rs 176 crore during the first quarter of current financial year ended June 2019 (Q1FY20).