NEW DELHI :
Rating agency CARE Ratings on Friday downgraded real estate focused lender Altico Capital India Ltd, following the lenders default on an interest payment on Thursday.
“Care has revised credit rating for proposed long-term bank facilities from CARE AA-; Outlook: stable to CARE B; Outlook: negative," Altico said in a filing with stock exchanges.
On Thursday, Altico Capital said it has defaulted on interest payments worth ₹19.9 crore due to Mashreq Bank of Dubai, highlighting the rising stress in India’s cash-starved property market. The company added that this may lead to further defaults down the line. Altico has a total outstanding debt of ₹4,361.55 crore.
“The revision in ratings assigned to the proposed bank facilities of Altico Capital India Limited takes into account default in repayment of External Commercial Borrowing (not rated by CARE) due to liquidity constraints. The revision also takes into account Altico’s significant exposure to real estate sector which is witnessing slowdown and experiencing heightened refinancing risk which is reflected to an extent with moderation in asset quality of the company," rating agency CARE said.
The ratings remain constrained due to concentration risks in terms of clients, geography and sector as the company is primarily engaged in real estate financing and limited seasoning of the recently originated portfolio, it added
As of 30 June, the company has inflows from loans and advances of Rs.1,930 crore in one year time bucket against which Altico has borrowing repayments worth Rs.2,795 crore, thereby generating negative mismatch of Rs.865 crore, CARE said. “Against which company also has Rs.842 crore in form of cash & cash equivalents and investments as on June 30, 2019."
As on March 31, 2019, the company had a loan portfolio of Rs.6,906 crore.
The default by Altico followed a rating downgrade and the resignation of its chairperson and independent director Naina Lal Kidwai, former head of HSBC India, earlier this month.
On 3 September, India Ratings and Research downgraded Altico Capital’s long-term issuer rating to “IND A+" from “IND AA-" and short-term issuer rating to “IND A1" from “IND A1+", with a negative outlook.
Some of Altico’s real estate exposures include a ₹570 crore investment in Assetz Property Group and a plotted development project of Century Real Estate Holdings, a ₹120 crore investment in an affordable housing project being developed by the Century group, and ₹650 crore debt financing to Mumbai-based warehouse and industrial park Renaissance Industrial Smart City, according to the lender’s website.