Fitch drops Indosolar to D(ind)

Fitch Ratings said it downgraded Indosolar Ltd.'s national long-term rating to Fitch D(ind) from Fitch BBB-(ind).

Fitch said the downgrade reflects defaults by Indosolar on its debt servicing obligations due to its strained liquidity position on account of a decline in the selling price for solar cells to below $0.40/Watt during H1FY12 (end-September 2011) from $1.40-$1.50/Watt during FY11.

The decline in price is because of the slowdown in demand from the European, U.S. and domestic markets, leading to intense competition. As a result, solar cell production became unviable and was stopped by the company at its manufacturing facility at Greater Noida (Uttar Pradesh) in June.

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