Mafatlal Fin in default list

Crisil has downgraded the Rs 36 crore non-convertible debenture issueof Ashok Leyland Finance Ltd (ALFL) from `AA’ to `AA-‘. It has, however, reaffirmed the `AA’ and `P1+’ ratings assigned to the finance company’s fixed deposit and Rs 120 crore commercial paper programmes respectively.

The ratings are reflective of the weakening asset quality of ALFL, decline in profitability of the company on account of higher provisioning and tax outgo and the high leveraging of the company. These risks are however offset to a large extent by the strong manufacturer linkages of ALFL with the parent company, Ashok Leyland Ltd.

Crisil has downgraded the fixed deposit programme and the Rs 5 crore commercial paper programme of Gujarat Machinery Manufacturers Ltd (GMML) to `A+’ from `AA’ and `P2+’ from `P1+’ respectively. The revision in rating factors in the decline in demand for glass-lined equipment due to lower fresh investments for capacity creations in end-user industries, increased competition and declining sales and profitability of GMML. The rating also takes into account thesignificant increase in debtors and decline in advances from customers that has resulted in pressure on the working capital position of the company.

Crisil has assigned the collective investment scheme of Growgreen Forests (I) Ltd a `Grade-V’ rating. The rating reflects an adverse business risk profile on account of the nascent stage of operations, high level of developmental expenses, low agricultural base as compared to funds deployed in operations and low level operational cash inflows.

The rating also factors the high financial risk due to low capitalisation level, high cost of raising investors funds and significant quantum of short-term funds which is likely to result in high dependence on fresh investor funds to meet its operational expenses and repayment obligations in the short to medium-term.