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Journalism of Courage
ICRA downgrades KMF
MUMBAI: ICRA, a leading credit rating agency, has downgraded the rating of the fixed deposit and medium term debenture programme of KMF Limited KMF from MA8217; to MB8217;, indicating inadequate safety. The rating has been put under watch with negative implications.
The downgrade takes into account the sharp fall in profitability of KMF in 1996-97 due to fall in earnings and increase in interest expenses. There was a drop in disbursements and deterioration in asset quality during the year. 8220;The company does not follow the RBI provisioning norms for NPAs which has resulted in overstatement of profits,8221; ICRA said. The rating has been put under rating watch pending certain clarifications yet to be received from the company regarding the financial results for 1997-98 and status of repayment of contractual obligations.
Oriental Housing rating lowered
MUMBAI: ICRA has downgraded the fixed deposit rating of Oriental Housing Development Finance Corporation LtdOHDFC from MB8217; TO MC8217;. It also put the instrument under rating watch with negative implications. The new rating indicates that chances for default are high. 8220;Adverse changes in business conditions could result in inability/unwillingness to service debts on time and as per terms,8221; ICRA said. It has assessed the performance of the company based on available information from secondary sources. The downgrade takes into account OHDFC8217;s poor financial performance over the last two years caused by a significant increase in expenses and depressed yields in its housing finance business. The company8217;s investments have also depreciated significantly.
