Ratings agency ICRA has downgraded the long-term rating of Deepak Fertilizers and Petrochemicals Corporation’s Rs 600 crore worth of non-convertible debentures (NCDs), Rs 575-crore (increased from Rs 500 crore) long-term fund-based limits and Rs 141.44-crore term loans from ‘AA’ to ‘AA-’.
The rating agency has reaffirmed the short-term rating assigned to the Rs 750-crore commercial paper programme and Rs 1,425-crore (reduced from Rs 1,500 crore) non-fund based limits of the company at ‘A1+’.
The rating agency has downgraded the company’s ratings on account of the deterioration in the financial profile, owing to the “continued regulatory overhang over gas supply issue and the recovery of unintended benefits from players manufacturing Nutrient “N” using domestic gas. Moreover the company’s working capital position has weakened over the last one year due to holding up of subsidy payments by the Department of Fertilisers’ pending recovery of unintended benefits, resulting in significant build-up of short-term debt.
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