The Credit Rating Information Services of India Ltd (Crisil) has downgraded the debt programmes of two sugar companies and two financial services companies, specifically Andhra Sugars Ltd, New India Sugar Mills, Prakash Leasing Ltd, and Savani Financials Ltd.
Andhra Sugars (ASL) had its Rs 113-crore non-convertible debenture (NCD) programme downgraded to A+ from AA-, indicating very strong safety. Meanwhile, its Rs 20 crore commercial paper (CP) was awarded a P1 rating.
According to Crisil, ASL was downgraded following lower realisations in the chlor-alkali industry which is a key business for the company. Also, the company's increased access to debt for expansion projects, and increased investment in group companies will affect its future performance. The risks, however, are partly offset by the company's diversified business profile and encouraging prospects for the sugar division.
New India Sugar Mills (NISML) saw its outstanding Rs 88.9-lakh cumulative redeemable preference share issue downgraded to pfA from pfAA-, indicating adequate safety. The company's financial risk profile has weakened in line with industry trends. The rating has factored in the company's comfortable capital structure and its association as part of the KK Birla group of companies.
Prakash Leasing (PLL) had its fixed deposit programme downgraded to FB from FA-, indicating inadequate safety. The rating reflects a decline in the asset quality of Prakash Leasing which has necessitated substantial provisioning, affecting profitability. Meanwhile, the company is finding it difficult to attract fresh funds. Its deposit accretion has also declined.
Meanwhile, Crisil has assigned an AA(SO) rating for the upcoming Rs 100-crore bonds issue of the Ahmedabad Municipal Corporation, a P1+ rating for the Rs 6-crore commercial paper of Hindustan Gums and Chemicals, P1+- for the Rs 35-crore short term debt paper of Kotak Mahindra Capital Company, AA- for the Rs 50-crore NCD issue of Kotak Mahindra Primus, and P1+ for the company's Rs 50-crore CP.
Crisil has reaffirmed the FAA+ rating for the fixed deposit of Pudumjee Pulp & Paper Mills, and assigned a P1+ rating for its Rs 12-crore CP. Further, it has reaffirmed the P1 rating for the Rs 5-crore CP issue of Upper Ganges Sugar & Industries.
