Revision as of 11:08, 25 June 2021

Credit rating

2019, Nov: downgraded over debt

Nov 30, 2019: The Times of India

Shapoorji Pallonji and Company (SPCPL), part of the group which holds 18.4% in Tata Sons, has been downgraded by rating agency ICRA because of delay in reducing debt through equity infusion and asset sales. ICRA said that it has downgraded Rs 15,000 crore of nonfund-based limits and Rs 6,000 crore of fund-based limits to A+ from AA-. It has also lowered its rating on Rs 2,500 crore of commercial paper to A1 from A1+.

“The promoters have infused a total of Rs 2,270 crore in SPCPL during H1FY20, including Rs 1,900 crore from the proceeds of the Sterling & Wilson Solar (SWSL) initial public offering (IPO). However, contrary to ICRA expectations, the net debt levels have not come down because the same has been deployed to meet the funding requirements of several group companies, especially in the real estate business,” ICRA said.

SPCL has seen an increase in standalone debt on account of elongation in the working capital cycle given slow realisation of receivables and high inventory levels, especially for EPC projects from Andhra Pradesh government. “While the maturity profile of the debt has improved, with a significant reduction in short-term debt including commercial papers, it still remains exposed to high refinancing risk,” ICRA said.

Recently, SWSL promoters SPCPL and Khurshed Yazdi Daruvala sought from lenders a revised repayment schedule of the inter-corporate deposits (ICDs) due from their jointly held entities to SWSL. As part of the commitments made by the promoters during the IPO of SWSL, a portion of the net offer proceeds from the IPO were to be utilised for repayment of these ICDs.