Crisil Downgrades Debentures, Frn Of Lupin Labs

Credit Rating and Information Services of India Ltd (Crisil) has downgraded the Rs 186.5-crore non-convertible debentures (NCD) issue and the Rs 10-crore floating rate note issue of Lupin Laboratories Ltd from A+ to A-.

The revised rating indicates adequate safety with regard to timely payment of interest and principal. The cash flows of the company continue to be under strain and the gearing levels are likely to stay high.

Besides, the Rs 17.5-crore NCD issue of Indian Organic Chemicals Ltd (IOCL) has also been downgraded from BBB to B, indicating high risk regarding interest payments and return of principal. Also, the ratings indicate higher susceptibility to default. The losses incurred by IOCL have led to deterioration in the leverage ratios and the interest coverage ratios.

 

The Rs 500-crore taxable bonds of Indian Railway Finance Corporation have been assigned AAA (SO) rating by Crisil, which indicates highest safety with regard to timely payment of interest and principal. This rating has been given taking into account the strong structure of the instrument and the support mechanism from the ministry of railways for ensuring timely payment of obligation on the instrument.

Apart from this, Anagram Finance Ltds non-convertible debenture issue has been rated AA-. This rating indicates high degree of safety with regard to timely payment of interest and principal. The gearing ratio of the company continues to be high at 5.83 in December 1996 and 5.63 at the end of June 1996. The spreads of the company have come under pressure and have declined from 5.5 per cent to 4.98 per cent.

The NCD issues of Metrochem Industries Ltd and PMT Machine Tool Automatics Ltd have been assigned A and A- ratings up to Rs 15 crore and Rs 10 crore respectively. Metrochem Industries fixed deposit programme has been assigned FA+ rating, indicating adequate safety for the payment of interest and principal.

Moreover, Goetze India Ltd has been awarded a P1+ rating for its commercial paper issue, which reflects that the degree of safety regarding payment of interest and principal is very strong. The limit for this programme is up to Rs 20 crore.