CRISIL has downgraded its rating on the long-term bank facilities and debt programmes of Hindalco Industries (Hindalco) to 'AA/Stable' from 'AA+/Stable'. The rating on the company's short-term debt and bank loan facilities has been reaffirmed at 'A1+'.

CRISILs believes that Hindalco's debt to EBITDA, although currently high for the rating category, will gradually improve over the medium term driven by a steady ramp-up in its domestic greenfield capacities, access to captive Mahan coal block,  and portfolio rationalization in Novelis with increased focus on its high margin automotive-business. 

The outlook may be revised to 'Positive' if Hindalco's debt to EBITDA improvement is higher than expected driven by healthy realizations in the Indian business or higher-than-expected conversion margins in Novelis.

Conversely, the outlook may be revised to 'Negative' if its debt levels further increase or accruals deteriorate because of delayed ramp-up of its operations, or a significant fall in aluminium prices, or any delay in availability of captive sources of raw materials for greenfield projects.

Shares of the company gained Rs 3.15, or 1.94%, to settle at Rs 165.25. The total volume of shares traded was 710,039 at the BSE (Monday).