Fortis Healthcare, Religare Enterprises shares plummet on default rating
Religare Enterprises closed 4.14% lower to Rs112.35, while Fortis Healthcare fell 8.66% to close at Rs148.80, after India Ratings downgraded RHC Holding to default
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Mumbai: Shares of Fortis Healthcare Ltd and Religare Enterprises Ltd on Monday slumped as concern rose over the debt levels of these firms, after India Ratings and Research downgraded RHC Holding Pvt. Ltd to default.
RHC Holding, along with Oscar Investments Ltd, jointly owns financial services firm Religare Enterprises Ltd and healthcare provider Fortis Healthcare Ltd.
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Religare Enterprises closed 4.14% lower to Rs112.35, while Fortis Healthcare fell 8.66% to close at Rs148.80. In the last two months, both the stocks have fallen around 45% and 25%, respectively, while so far this year, they have declined 56% and 16%, respectively.
The ratings agency also put three Religare group firms—Religare Enterprises Ltd, Religare Finvest Ltd and Religare Housing Development Finance Corp. Ltd—on a negative rating watch list.
Earlier on 12 July, Care Ratings downgraded Religare Finvest Ltd for its non-convertible debentures of Rs332 crore to Care AA- from Care A and placed on credit watch with developing implications citing corporate governance/disclosure issues.
“Going forward, the ability of the company to timely execute the strategic sale of its assets and eliminate the exposure to its corporate loan book, grow its loan portfolio and improve its profitability while improving its asset quality are the key rating sensitivities,” Care Rating said in its report.
As of March 2017, Religare Enterprises has total consolidated debt of Rs11,075.25 crore, while Fortis Healthcare has a debt of Rs1,961.30 crore.
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On 13 July, Mint reported that RHC Holdings has approached lenders for urgent funds to meet repayment obligations of financial services firm Religare Enterprises. RHC Holding is seeking funds from companies, including private equity firms KKR & Co. and Piramal Enterprises.