Shares of Sadbhav Infrastructure Projects (SIPL) tanked 18 per cent to hit a record low of Rs 59 on the BSE on Friday after Care Ratings downgraded the credit rating of the firm's wholly-owned subsidiary, Rohtak-Hissar Tollway Private Limited (RHTPL), from 'BB+' to 'D'.
The ratings agency downgraded the company due to "sustained subdued toll collection" against large debt obligations. The subsequent poor liquidity and weak debt coverage indicators led to overdues in the account (as per lender’s feedback) for debt servicing.
"There are overdues in the account of RHTPL in servicing its debt obligations upto 15 days... Toll collection of the company during FY19 stood at Rs 64.95 crore while the debt obligations (interest + principal) stood at around Rs 110 crore for the same period," the agency said in its ratings rationale.
The company has not created liquidity backup mechanism in the form of debt service reserve account (DSRA) stipulated in terms of sanction, it said.
In response, the construction major attributed the weak toll collections to various alternate routes available near this project, but said it would clear the pending dues of approximately Rs 6.50 crore today.
"RHTPL and SIPL continue to remain in discussion with National Highway Authority of India (NHAI) to solve this matter. SIPL has supported this project by infusing funds of approx Rs 168 crore upto 31st March, 2019," it said.
SIPL, which is not a guarantor to the debt availed by RHTPL, has a comfortable liquidity position with cash, bank and its equivalent amounting to Rs 170 crore as on 31st March, 2019.
At 10:13 am, the stock recovered 14 per cent from its intra-day low and was trading 7 per cent lower at Rs 67 on the BSE. In comparison, the S&P BSE Sensex remained unchanged at 39,584 points. A combined 82,653 equity shares have changed hands on the counter on the NSE and BSE so far.