CRISIL has downgraded its ratings on the bank facilities and debt programmes of Jindal Steel and Power (JSPL) to 'D/D' from 'BB+/ A4+'; the ratings have been removed from 'Watch with Negative Implications'.
 
The rating downgrade reflects delays by JSPL in payment of interest on its term loans; the delays were due to weakened liquidity. Liquidity deteriorated significantly as the steep fall in steel realisations coincided with high debt repayment obligations. Pressure on liquidity intensified further due to delays in materialisation of asset monetisation plans and refinancing of debt. 

''JSPL's steel business remains vulnerable to volatility in demand and in prices of metal, while its power business is susceptible to demand and price volatility in the merchant market and lack of raw material integration. The group is also exposed to risks related to regulatory changes in the mining sector,'' said CRISIL

However, it has a healthy market position in the steel industry, value-added product profile, and proximity to raw material sources. Successful debt refinancing and asset monetisation will be critical for the group and will assist in tiding over the current liquidity constraint.
 
Shares of the company gained Rs 1.95, or 3%, to trade at Rs 66.95. The total volume of shares traded was 2,161,944 at the BSE (12.12 p.m., Thursday).