CRISIL has reaffirmed rating on the bank facilities and debt programmes of National Fertilizers (NFL) at 'AA-/Negative/A1+'.

The continuing negative outlook reflects the adverse impact of operating losses and increase in working capital borrowings on NFL's debt protection metrics and capital structure. The deterioration in debt protection metrics has been precipitated by the persistent delay in receiving subsidies from the Government of India (GoI).

The 'Negative' outlook reflects the adverse impact on NFL's debt protection metrics and capital structure on account of the operating losses it incurred, and increase in working capital borrowings, precipitated by the persistent delay in receiving subsidies from GoI. The ratings may be downgraded if the company continues to post operating losses due to delay in attaining optimum capacity utilization and/or due to operating its Nangal, Bhatinda and Panipat plants at more than the revised energy norms.

The ratings may also be downgraded if the monthly subsidy payments from GoI are delayed further, resulting in cash flow mismatches. Conversely, the outlook may be revised to 'Stable' if the pressure on NFL's profitability is alleviated and the subsidy dues from GoI are cleared in a timely manner.

Shares of the company declined Rs 0.3, or 1.26%, to settle at Rs 23.50. The total volume of shares traded was 21,506 at the BSE (Monday).