India Ratings and Research (Ind-Ra) has downgraded Shree Renuka Sugars (SRSL) long-term issuer rating to 'BBB-' from ' A'. The outlook is negative. The agency has also downgraded SRSL's Rs 2,500 million non-convertible debenture programme (reduced from Rs 3,350 million) to ' BBB-'/Negative from 'IND A'.

The downgrade reflects the substantial deterioration in SRSL's consolidated credit metrics for the third consecutive year in FY15. This was due to a continuous decline in its sugar segment profitability and consistently high debt levels.

The company's efforts to significantly deleverage and improve its balance sheet strength remain hindered by its negative operating cash flows due to weak profitability and high interest costs.

In addition, the absence of cash inflows, as against Ind-Ra's expectations, through the rights issue route continued to delay effective deleveraging. 

Shares of the company declined Rs 0.06, or 0.65%, to trade at Rs 9.17. The total volume of shares traded was 283 at the BSE (9.17 a.m., Friday).