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Fitch downgrades IVRCL, Radico Khaitan debt
India's macro economy may be in ship shape, but individual companies are continuing to face the heat of rising debt accumulated in good times, but which are tough to service because of delayed projects or rising costs.
India's macro economy may be in ship shape, but individual companies are continuing to face the heat of rising debt accumulated in good times, but which are tough to service because of delayed projects or rising costs.
Ratings agency Fitch downgraded the debt of two companies today. It marked down the long-term debt of IVRCL , including its fund and non-fund based limits, its loans and its non-convertible debentures to A+ from AA-. This is because of the potential increase in IVRCL's leverage given delays in some of its projects and the fact that it plans to undertake six new projects which will require equity infusion of Rs 101 crore.
Fitch has also downgraded the commercial paper of Radico Khaitan from F1 to F2+ because of the company's increased leverage. It says Radico's net debt to earnings before interest, taxes, depreciation and amortization stands at over 16 times now compared to seven times last year. A steep increase in input costs and high forex losses led to a decline in profitability last year, the agency added.
