India Ratings and Research (Ind-Ra) has downgraded Nagarjuna Fertilisers and Chemicals (NFCL) long-term issuer rating to 'D' from 'BB-'. The outlook was stable.

The downgrade reflects NFCL's over-utilisation of cash credit limits and continuing delays in servicing principal and interest on its debts for the 12 months ended August 2015 due to tight liquidity. This was a result of lower production levels due to the unavailability of adequate gas supply and delays in the release of subsidy.      

NFCL's ratings are; long-term issuer rating: downgraded to 'D' from 'BB-'; Rs 8,200 million fund-based limits: downgraded to long-term 'D' from 'BB-'; Rs 11,811.1 million non-fund-based limits: downgraded to short-term 'D' from 'A4+'; Rs 2,315 million long-term loans: downgraded to long-term 'D' from 'BB-'; proposed Rs 5,190 million non-fund-based facility: 'Provisional A4+' rating withdrawn as the issuer did not proceed with the instrument as envisaged.

Proposed Rs 4,000 million term loan: 'Provisional BB-'; rating withdrawn as the issuer did not proceed with the instrument as envisaged; proposed Rs 300 million fund-based limits: 'Provisional BB-'; rating withdrawn as the issuer did not proceed with the instrument as envisaged.