Mumbai-based real estate developer Housing Development and Infrastructure's (HDIL) has asked Credit Analysis and Research (CARE) to review its rating downgrade after the company's stock hit a new 52-week low of Rs 48.75 on Wednesday.
The credit rating agency CARE had downgraded the company's non-convertible debentures (NCDs) citing delay in servicing debt obligations.
CARE downgraded HDIL's NCDs and short-term non-convertible debentures worth over Rs 2,000 crore to 'D'. The stock crashed 21 percent on Wednesday and has fallen 50 percent year to date. D rating indicates that the instrument has defaulted or is likely to default soon.
"The company has not accepted the said rating assigned by CARE and would like to reiterate the company's strong financial and operational performance and sound fundamentals," HDIL said in a statement.
CARE's rating downgrade comes after a cash flow crisis HDIL faced in February HDIL defaulted on the interest payment liability on NCDs worth Rs 2095 crore in February because service tax officials had temporarily frozen its bank accounts in lieu of Rs 8 crore dues. HDIL has finally made an interest payment of Rs 2 crore in the first week of March, reports CNBC-TV18's Priyanka Ghosh.
Now HDIL is working on getting its finances in shape as soon as possible. One of these steps include repaying Punjab National Bank a sum of Rs 150-Rs 180 crore rupees by end of this month. The company plans to use proceeds from sale of 2-acres land in Andheri for this transaction.
Last year HDIL had sold 2 acre land parcel to Adani Enterprises for Rs 900 crore. Out of the total proceeds, Rs 400 crore was booked in the last quarter.
The company is looking for more ways to finance its mammoth Rs 4,000 crore debt and aims to bring it down by Rs 1,000 crore rupees over the next 12 months.
Analysts believe that HDIL needs to work fast, so that investor confidence is regained. The stock had witnessed a major sell-off last month after the promoters sold 1.2 percent stake to fund meet its payment obligation towards a land purchase deal.