The rating agency has downgraded two non-convertible debenture (NCD) programmes of Flex Industries amounting to Rs 143.89 crore to D. The company's Rs 39.33-crore partly-convertible debenture (PCD) programme has also been downgraded to the default category.

At the time of the last rating change, when the ratings on outstanding issues were downgraded to the C category, Crisil had forewarned that there were factors present that make the instruments vulnerable to default and timely payment of interest and principal on these instruments was possible only if the circumstances improve.

Flex Industries' rating outlook in the short term was expected to be governed by its ability to raise additional funds. However, the company has been unable to raise the additional resourcestill date which has adversely affected the cash flows and ability of the company to honour its repayment obligations on a timely basis.

The Rs 50-crore NCD programme of Flex Engineering has been downgraded to D on account of the stagnation in the domestic packaging industry which has affected sales of the company. The company is largely dependent on capital goods sales for the flexible packaging sector. Flex Engineering is currently in a difficult liquidity position which could adversely affect its ability to honour its repayment obligations on a timely basis.

Flex Foods' Rs 3.20-crore NCD programme has also been downgraded to the default category. The company is engaged in the production of freeze-dried mushrooms, mostly for the export market.

The project has been facing difficulties since its inception and it also had problems in the past with production stabilisation and marketing of mushrooms.

Though the company could rely on support from the group in the past, difficult funds position for thegroup has resulted in drying up of this support as well. Currently, Flex Foods is in a strained liquidity position which could adversely affect its ability to honour its repayment obligations on a timely basis.

Crisil has also downgraded the NCD and fixed deposit (FD) programmes of Escorts Finance Ltd. The Rs 2-crore NCD plan has been downgraded to A- from A+, while the FD programme has been downgraded to FA from FAA-. The revised rating reflects the difficult business environment and stiff competitive pressures in the NBFC industry resulting in a stagnation of disbursements.