Mumbai, Sep 18 (IANS): Rating agency ICRA on Monday downgraded the ratings of Infrastructure Leasing & Financial Services Ltd (IL&FS) for short-term and long-term borrowing programmes.
"ICRA has revised the long-term rating for the Rs 5,225 crore non-convertible debenture programme and the Rs 350 crore term loans of IL&FS to [ICRA]D from [ICRA]BB," an ICRA report stated.
"ICRA has revised the short-term rating for the Rs 2,500 crore commercial paper programme of IL&FS to [ICRA]D from [ICRA]A4. The ratings have been removed from watch with developing implications."
According to the report, the rating revision takes into account the recent irregularities in debt servicing by the company.
"The liquidity position at group levels remains under challenge given the delays in raising funds from the promoters in accordance with the earlier stated plans, deterioration in the credit profile of key investee companies and sizeable debt repayment obligations," the report said.
"The company had planned to raise Rs 4,500 crore equity (through rights issue) and Rs 3,500 crore long-term line of credit from its shareholders. These plans, however, are yet to be finalised."
The downgrade comes after the company was unable to meet the commercial paper (CP)redemption obligations due on September 14, 2018.
Furthermore, on September 15, 2018, the company reported that it had received notices for delays and defaults in servicing some of the inter corporate deposits (ICD) accepted by it.
IL&FS is a core investment company (CIC) and serves as the holding company of the IL&FS Group, with most business operations domiciled in separate companies which form an ecosystem of expertise across infrastructure, finance and social and environmental services
Initially promoted by the Central Bank of India, Housing Development Finance Corporation Ltd and the Unit Trust of India, IL&FS was incorporated in 1987.
Over the years, it has inducted institutional shareholders including SBI, LIC, ORIX Corporation of Japan and Abu Dhabi Investment Authority (ADIA).
As on March 31, 2018, LIC and ORIX Corporation are the largest shareholders in IL&FS with their stakeholding at 25.34 per cent and 23.54 per cent, respectively. Other prominent shareholders include ADIA (12.56 per cent), HDFC (9.02 per cent), CBI and (7.67 per cent) and SBI (6.42 per cent).