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This article is more than 2 year old.

Jain Irrigation shares plunge 16% after Fitch downgrades long term issuer rating

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Jain Irrigation Systems shares tanked about 16 percent to day's low of Rs 21.40 on Tuesday after Fitch Ratings downgraded the company’s long-term issuer default rating to ‘CCC-‘ from ‘B-' rating earlier.

Jain Irrigation shares plunge 16% after Fitch downgrades long term issuer rating
Jain Irrigation Systems shares tanked about 16 percent to day's low of Rs 21.40 on Tuesday after Fitch Ratings downgraded the company’s long-term issuer default rating to ‘CCC-‘ from ‘B-' rating earlier.
At 11:10 AM, the stock was down 13.15 percent to Rs 20.15 per share on the National Stock Exchange.
Jain Irrigation
In its report, Fitch Ratings said, “Jain Irrigation’s (JISL) liquidity risk has increased significantly over the last few months since 31 March 2019. We estimate that weaker operating cash flow after 31 March, coupled with markedly reduced headroom under working capital lines and cash balance has resulted in heightened liquidity- and refinancing risks for JISL.”
According to the rating firm, the risks remain high in the fiscal quarter ending on 30 September 2019 due to the effect of seasonality where the company traditionally requires a larger working capital outlay in the first half of its fiscal year.
Furthermore, JISL's liquidity risks may increase further within a short span of time if it is unable to secure timely new credit facilities from lenders or if there are further delays in collections in the receivables due from the government, the report added.
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