Jindal Vijaynagar downgraded

MUMBAI, May 26: Crisil, the leading credit rating agency, has downgraded Jindal Vijayanagar Steel’s Rs 635 crore non convertible debenture (NCD) programme from `BBB-‘ to `BB’, indicating `inadequate safety.’In a statement, Crisil said the revised rating takes into account the substantial delays in project implementation and cost overrun in the project. This has increased the capital cost and interest costs significantly which will affect future profitability. "There also exists risks of project stabilisation and increased competition in the domestic steel industry," it said."The rating also takes into account, the HR mill to be commissioned shortly, decline in the risk associated with Corex technology and low cost of operations of the integrated steel plant," Crisil said.

Crisil has also has downgraded the Rs 60 crore NCD programme of ITC Bhadrachalam Paper Board from AA- to A indicating adequate safety. It has also downgraded the company’s fixed deposit programme from FAA to FA indicating adequate safety."The rating reflects Crisil’s concerns regarding the heightened risk profile of ITCBPL on account of weakening financial position characterised by increased pressure on on operating margins and higher financial charges which the company will need to absorb on account of debt financing of its capacity expansion programs," it said.