Crisil downgrades Arvind Mills, ICDS

As the earlier anticipated reduction in gearing levels appears difficult to achieve, the rating firm expects company’s gearing levels, which have steadily increased over the last three years, will continue to remain high, affecting the company’s financial risk profile.

On the whole, AML’s ratings continued to reflect the company’s strong business position in terms of international competitiveness in the cotton textile fabrics business resulting from its large installed capacity in denim,use of modern technology, association with leading international brands, and availability of cotton in India, Crisil said.

Crisil said the rating of ICDS’s fixed deposits have been downgraded from `FA’ to `FB’. The revision in rating reflects the pressure on credit fundamentals of the company arising out of sharp deterioration in the assets quality, decline in profitability and the significant asset-liability mismatch of the company.

Moreover, Crisil said the need to reduce to mobilisation of public deposits could affect the liquidity of the company. This is also expected to affect the future growth potential of the company.

The fixed deposit programme of Wiseman Finance has been downgraded from `FA’ to `FA minus’. The revision is based on the limited prospects in the changed business environment, weak assets quality and diminished profitability. The investment grade rating reflects the ownership by the C L Rajeja group and the financial flexibility enjoyed by the company on this account.

The ratingof J K Corp’s Rs 61.68 crore debenture programme has been downgraded to `BBB’ from `A minus’. The rating of the Rs 82 crore partly convertible debenture issue has been downgraded to `BBB’ from `A minus’. The rating reflects the difficult business conditions for the company and decline in performance in all the businesses of the company. Paper, cement and polyester synthetics fibre, the core businesses are under pressure because of adverse business environment. The rating also factors the substantial losses in the first half year, continued adverse financial performance in the second half and an adverse capital structure.

Meanwhile, CARE has downgraded the rating of the FD programme of Rs 5 crore of Ace Laboratories from `A’ to `C’. The rating for preference share issue of Rs 15 crore have been downgraded taking into view the company’s failure to meet in time its debt service obligation on account of ICDs, bills discounting and other loans, Care said.