Ratings agencies ICRA and Crisil downgraded Dewan Housing Finance Corp Ltd's (DHFL) commercial paper to their lowest ratings on Wednesday after the lender missed certain payments on bonds due this week.
This was Crisil's fifth rating cut on the company's paper this year and ICRA's fourth, highlighting the problems in shadow banking sector that has struggled since a series of defaults at Infrastructure Leasing and Financial Service Ltd last year.
ICRA cut its rating on the company's paper to D from A4, while Crisil downgraded to 'CRISIL D' from 'CRISIL A4+', implying that the company was in default or expected to be in default soon.
"The downgrade reflects delays in debt servicing by DHFL on some of its non-convertible debentures (NCDs) - not rated by Crisil - because of inadequate liquidity," Crisil said.
DHFL is in talks to meet its over Rs. 1,000 crore ($144.19 million) obligation before the seven-day grace period and its financing could come in by the end of this week, the report also said.
The lender, which stopped taking new deposits and blocked premature withdrawals last month, said it was taking steps to make the payment on time and that the delay did not amount to a default.