Fitch cuts Indian Farmers Fertiliser to AA(ind)

Fitch Ratings said it downgraded Indian Farmers Fertiliser Cooperative Ltd.'s national long-term issuer rating to AA(ind) from AA+(ind) and revised its outlook to negative from stable. The agency also said it assigned a national rating of AA(ind) to the company's outstanding long-term bank loans amounting to Rs.14.92 billion and national long-term ratings of AA(ind) and national short-term ratings of F1+(ind) to its Rs.126.89 billion fund-based sanctioned bank facilities, Rs.32.51 billion non-fund based sanctioned bank facilities and proposed working bank facilities amounting to Rs.10.6 billion and also has affirmed its Rs.1 billion commercial paper program's national short-term rating at F1+(ind).

The downgrade reflects higher than anticipated borrowings that have increased the financial and operating leverage and stressed the credit profile, Fitch said. The rise in debt level is largely attributable to the company's higher working capital requirements toward costlier raw materials, funding of subsidy recoverable from the government of India and increased trading activities, the agency said.

The ratings continue to be supported by its established business position in the Indian fertilizer industry as the single largest producer of urea and DAP, Fitch said.

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