Ansal Housing FD rating downgraded

ICRA has downgraded the fixed deposit programme rating of Ansal Housing and Construction (AHCL) from MA to MA minus. The revised rating also indicates adequate safety. The prospect of timely servicing of the interest and principal is adequate.

However, debt servicing may be affected by adverse changes in the business / economic conditions. The downgrade takes into account tight liquidity position of AHCL in the last few years resulting from a downturn in the real estate market and funding mismatches. AHCL, however, continues to be regular in meeting its interest and principal repayments to the fixed deposit holders.

The rating also factors in positive outlook in the housing sector in view of the number of incentives on investments in housing and strong position of AHCL in developing and selling properties in the Ghaziabad and Greater Noida regions in Uttar Pradesh.

AHCL has taken steps to correct the funding mismatches by contracting long tenure loans which is expected to help AHCL to improve its liquidity position.

The company has sold-off a major portion of existing projects and will need to invest long term funds in fresh projects to sustain its growth in the medium term.

Corporate Bureau

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Section  : Business
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