Thursday, August 21 1997

Dewan Housing downgraded


MUMBAI, AUG 20: Credit Analysis and Research Ltd (Care) has downgraded the fixed deposit programmes of Dewan Housing Finance Corporation and Godrich Finance & Investments.

While the FD programme of Dewan Housing up to a limit of Rs 200 crore has been downgraded to CARE AA- (FD) from CARE AA (FD), Godrich Finance & Investment's FD programme has been downgraded to CARE BB (FD) from CARE BBB (FD). The rating agency has also decided to suspend the rating assigned to the company's FD programme. Care has also downgraded the Rs 13 crore non-convertible debenture programme of Dewan Housing from CARE AA to CARE AA-.

The revised rating of Dewan Housing, however, continues to be of the highest investment grade. The revised rating assigned to Godrich Finance & Investments suggests that the instruments are considered to be speculative with inadequate protection for interest and principal repayments.

While asset quality continued to be good with 99.12 per cent of the assets classifed as standard as on March 1997, Dewan Housing had to increasee its dependence on fixed deposits for financing the housing loans portfolio, over the last two years. This has increased the maturity mismatch of assets and liabilities, despite the relatively longer tensure of the deposits.

The financial flexibility of the company is limited by its somewhat low capital adequacy ratio of 12.20 per cent as on March 1997.CARE has downgraded the rating for the fixed deposit programme of Godrich Finance & Securities Ltd (GFSL) from BBB to BB. Such instruments are considered to be specualtive, with inadequate protection for interest and principal payments. The rating has also been suspended with immediate effect.GFSL is a small Delhi based NBFC promoted G K Mittal. In the last few months, there has been a sharp decline in the level of operations of GFSL and several employee have left the services of the company. GSFL is also reported to be mobilising FDs at a high cost.

The company has failed to furnish the information required by Care for monitoring the credit rating. As a result, the rating has been suspended. While Care has retained the AA (SO) rating assigned to the Rs 2.68 crore NCD programme of Lloyds Housing Finance, it has suspended the rating assigned to its FD programme since the company has not yet launched the programme. Care gave PR1+ rating to Rs 30 crore commercial paper programme of Kirloskar Electric Company Ltd.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.



Ceat Financial Services Ltd.


The Financial Express


Headlines | Front Page | Expressions | Politics | Business | General
Home | Sports | States | Leisure | Classifieds
Advertising | Feedback | What's New
Search | Archives
The Group