KOLKATA: Rating firms Care Ratings and India Ratings & Research have downgraded Altico Capital India Ltd’s credit rating to junk as the foreign private equity-backed non bank lender missed interest payment of Rs 19.97 crore on an overseas loans taken from Dubai-based Mashreq Bank.
Outlook for the company’s credit profile is negative.
India Ratings has downgraded the lender’s long-term issuer rating to ‘D’ from ‘A+’ and short-term issuer rating to ‘D’ from ‘A1’.
Care has revised credit rating for proposed long-term bank facilities from “AA-” to “B”.
“The company had unencumbered cash balance of Rs 490 crore as on September 12. As per the management, Altico faced pressure of accelerated debt repayment from some lenders and also experienced difficulty in mobilising fresh funds,” India Ratings said.
The rating firm said that shareholders — Fiera Capital, Abu Dhabi Investment Council and Varde Partners — had earlier articulated that they would ensure adequate liquidity for Altico. However, the shareholders were not forthcoming to shore up the liquidity buffers of the company.
The NBFC has more than Rs 4,000 crore of bank loans.
Given the recent developments, India Ratings expressed concerns over the possibility of Altico servicing its debt obligations in a timely manner from hereon.
Altico has exposure to real estate developers, many of which have weak and stretched credit profiles.
“Altico’s loan book is concentrated, given the high single party exposures. The top 10 individual exposures accounted 39% of the loan book (90% of the net worth) and the top 10 group exposures accounted 60% of the loan book (139% of net worth) at end-FY19. With this high concentration, the impact could be disproportionate in the event of any major defaults,” India Ratings said.
Source: Economic Times