Mumbai: Jain Irrigation Systems shares crashed 28.65% intraday to hit their 52-week low of ₹20.2 today after India Ratings cut its long-term issuer rating.
On Tuesday, India Ratings and Research said it had downgraded Jain Irrigation Systems' Long-Term Issuer Rating to BBB from A-. It has currently being placed on 'Rating Watch Negative' (RWN).
Jain Irrigation in an exchange filing last week said, "The company has not defaulted on any of its debt obligations. The company is a growth-oriented, profit making, dividend paying entity."
It said it had not defaulted on any of its debt obligations and stated it was confident of executing its plan to bring down its debt by ₹2,000 crore. Jain Irrigation is planning to sell its pipes or food businesses to reduce the debt.
Its overall debt is about ₹4,900 crore, of which ₹1,400 crore is in the form of long-term bonds due in February 2022. The company has a debt:equity ratio of 1:1.1 and a net worth of ₹4,561 crore.
The stock has fallen 45.66% this week despite the company's clarification on default in debt repayment. Year to date, the stock has fallen 71.16% while the Senex has climbed 8.04%.
The company’s liquidity deteriorated in FY19 on account of a delay in the realisation of receivables, according to India Ratings. Due to adverse movements in working capital, Jain Irrigation's cash flow swung from a positive ₹8,500 crore in FY18 to a negative ₹3,500 crore in FY19.