Consequently, the ongoing Rs 297-crore Saurashtra Cement expansion project is being funded with a large proportion of debt, the rating agency said.

It has also downgraded the fixed deposit programme of Sterling Holiday Resorts (India) Ltd from `FC' to `FD'. The revised rating indicates that the instrument is either in default or is expected to default on maturity, the Crisil release said.

According to the rating agency, the debt-funded expansion and modernisation programme of Saurashtra Cement has resulted in a significant deterioration in the financial risk profile of the company. "Moreover, the increased debt burden islikely to result in substantially higher interest costs. In view of the above, the company's ability to meet its upcoming debt repayments over the next two years would critically depend on fresh funds infusion into the company," Crisil said.

The rating also takes into account the company's satisfactory operations, excellent limestone reserves and brand equity arising out of long presence in Gujarat.

Meanwhile, Icra has reaffirmed the rating assigned to the term deposit programme of State Bank of Patiala (SBP) at MAAA and the certificate of deposit programme at A1+. The reaffirmation of the rating takes into account the dominant presence of the bank in north India which is reflected by a strong deposit base and the good quality of credit portfolio particular in a agriculture and personal segments. "The rating reflects the comfortable capital adequacy of the bank which would provided opportunity for the bank to grow.

According to the release, the general slowdown in the economy has led to a marginaldeterioration in the asset quality of SBP. However, despite the deterioration, the asset quality of SBP is comparable to other strong banks in India.

It has assigned an MA- rating to the fixed deposit programme of Sky Industries indicating adequate safety. "The prospect of timely servicing of interest and principal is adequate. The debt servicing may be affected by adverse changes in the business and economic conditions," Icra said.

Duff & Phelps Credit Rating Agency (DCR) has assigned an Ind AA-(FD) rating to the fixed deposit programme of the Motor and General Finance. The rating indicates high credit quality. "Protection factors are strong and risk is modest but may vary slightly from time to time because of economic conditions," said a DCR release.