S&P downgrades Jain Irrigation

S&P said it lowered the long-term issuer credit and issue ratings on Jain Irrigation Systems Ltd. to B- from B+.

The agency said it placed the ratings on CreditWatch with negative implications.

Jain Irrigation's Indian government-led irrigation projects are facing collection delays resulting in elevated debt and thinning liquidity buffers, S&P said.

The company has a very low cash balance and adverse financial market sentiment can result in pressure on its banking relationships, which is a key to its liquidity, the agency said.

The CreditWatch placement signals a 50% probability S&P will lower the ratings by one or more notches over the next three months, if the company is unable to improve its liquidity.

Other risks to ratings include heightened uncertainty about the India's 2019 monsoon performance, which can dampen the retail sale prospects of Jain Irrigation's micro-irrigation systems, the agency said.

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