Ind Ra downgrades Sadbhav Infrastructure Project and its NCDs to 'BB+'; places on RWN

20 Jun 2022 , 12:06 PM

India Ratings and Research (Ind-Ra) has downgraded Sadbhav Infrastructure Project Limited’s (SIPL) Long-term Issuer Rating to ‘IND BB+’ from ‘IND BBB+’ and placed it on Rating Watch Negative (RWN).

According to the rating rationale report, Ind-Ra continues to take a consolidated view of SIPL and its 69.7% parent Sadbhav Engineering Limited (SEL), collectively known as Sadbhav, owing to the strong legal and operational linkages between them.

Ind-Ra has also adjusted the financials for the equity required to be infused by SEL in its under-construction hybrid annuity model (HAM) projects along with the shortfall support envisaged for the operational build-operate-transfer (BOT) and HAM assets. Ind-Ra has not consolidated the debt of the projects, wherever it is on a non-recourse basis.

SIPL announced a scheme of merger with SEL in 3QFY20. The merger is pending for  completion, subject to the receipt of various statutory and regulatory approvals.

In addition to this, the downgrade follows a similar rating action on SIPL’s  parent, SEL.

At around 12:08 PM, Sadbhav Infrastructure Projects was trading at Rs7.15 per share down by Rs0.18 or 2.46% from its previous closing of Rs7.33 per share on the BSE.