India Ratings & Research has downgraded Texmaco Rail and Engineering Ltd's long-term issuer rating in the wake of rising net debt and weak credit metrics.
The agency has lowered Texmaco's long-term issuer rating to 'IND A' from 'IND AA-' and has simultaneously placed it on 'Rating Watch Negative' (RWN).
The downgrade reflects Texmaco's continued negative free cash flow, rising net debt and weaker-than-previously- expected credit metrics, India Ratings said in a release.
"The reliance on external financing remains critical for the company, and while it has been able to tie up incremental bank financing, the availability of adequate liquidity on its own balance sheet on a sustained basis will be key to resolving the rating watch," it said.
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