Bajaj Electricals receives negative credit rating from ICRA

Bajaj Electricals' credit ratings were downgraded by rating agency ICRA. Reacting to the news, the stock of the company dipped more than 5 per cent intraday on Wednesday.

The rating agency considered the increasing level of leverages and subsequent weakening of debt coverage metrics of the company as the primary reasons for the downgrade of the credit rating of the company. ICRA downgraded the Line of credit (long term) and non-convertible debenture from [ICRA]A+ to [ICRA]A and Line of credit (short term) as well as commercial paper from [ICRA]A1+ to [ICRA]A1.

Bajaj Electricals has diversified business portfolio with healthy revenue growth but the company needs to face credit challenges such as high working capital intensity, increasing leverage level and volatility in raw material cost.

Bajaj Electricals Limited is a part of the Bajaj Group of Companies. The company has five business units namely, fans, lighting, luminaries, appliances and engineering and projects. It also has a 19 per cent stake in Hind Lamps Limited.

On Wednesday, the stock of Bajaj Electricals Ltd. opened at 425.05 per share and made intraday high and low of Rs. 426.15 and 404.20, respectively on BSE. The stock closed at Rs. 406.40 per share, down by 4.46 per cent.