New Delhi: Mahindra & Mahindra Ltd, India’s biggest maker of tractors and sport-utility vehicles, had the outlook on its non-convertible bonds cut at Crisil Ltd on concern the company may borrow more for expansion.
Crisil cut the outlook on Mumbai-based Mahindra’s Rs1,300 crore non-convertible bonds to “negative” from “stable”, the ratings company said. Crisil also expects a “significant reduction” in Mahindra’s funds, it said. The negative outlook reflects Crisil’s expectation that Mahindra “will increase its financial leverage to fund organic and inorganic growth,” the ratings company said. “Reliance only on debt funding for incremental capital expenditure and investments could result in a rating downgrade.”
Mahindra will produce cars in an alliance with Renault SA and will start heavy truck manufacturing with Navistar International Corp.