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Jain Irrigation Systems share price hits fresh 52-week low on S&P downgrade

Jain Irrigation share price fell 3.32% to Rs 13.10, a fresh 52-week low compared to the previous close of Rs 13.55 on BSE.

twitter-logo BusinessToday.In        Last Updated: October 15, 2019  | 15:27 IST
Jain Irrigation Systems share price hits fresh 52-week low on S&P downgrade
Jain Irrigation share price fell 3.32% to Rs 13.10, fresh 52 week low compared to the previous close of Rs 13.55 on BSE.

Jain Irrigation share price fell to a fresh 52-week low today after S&P Global Ratings cut ratings of the firm to selective default after it missed certain principal payments under working capital facilities. Jain Irrigation share price fell 3.32% to Rs 13.10, fresh 52 week low compared to the previous close of Rs 13.55 on BSE.

Jain Irrigation Systems share price is trading lower than 5-day, 20-day, 50-day, 100-day and 200-day moving averages.

On missing certain principal payments, S&P said it saw a "high likelihood" that the company would be classified as non-performing asset by its bankers. A selective default according to S&P means the firm has defaulted on a specific issue but will meet its other obligation.

"In our view, there is a significant likelihood that Jain Irrigation's liquidity crunch would spread to its international business, leading to a default on its US dollar bonds as well," S&P said in a statement. Delayed collection of government receivables and erratic monsoons in India continue to stress Jain Irrigation's cash flows, according to S&P.

This is the second downgrade for the agriculture firm within a week.

On October 12, Care Ratings downgraded long-term bank facilities of Jain Irrigation due to ongoing  delays in debt servicing.

"The revision in the ratings assigned to the bank facilities of Jain Irrigation Systems Limited(J/5L) is on account of ongoing delays in its debt servicing due to delay in collection of receivables, leading to cash flow issues in the company," Care  said.

The firm has long-term loan of Rs 783 crore, long-term bank facilities for working capital of Rs 1,650 crore and short-term bank facilities of Rs 2,220 crore -- with total facilities aggregating to Rs 4,653 crore, according to regulatory filings at the stock exchanges.

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