Reliance Capital downgraded to A1 by ICRA

New Delhi: Reliance Capital Ltd announced that ratings agency ICRA has downgraded its rating by one notch to A1 for the company's short-term debt programme. The ratings agency attributed this action to a delay in monetising non-core investments and refinancing risk of short-term maturities. ICRA has downgraded the rating with negative implications outlook.

"ICRA has stated this action is primarily due to refinancing risk of short term maturities and a delay in monetising the noncore investments. The company considers the rating action completely unjustified and inappropriate," Reliance Capital said in a regulatory filing.

Entire review process futile

The company added that ICRA arbitrarily decided not to provide the company a chance to meet the Review Committee's members and address any concerns, thus turning the entire review process prescribed by the SEBI into a futile, pointless and unfair exercise, it said.

The company has also started monetising its entire 42.88 percent stake in Reliance Nippon Life Asset Management Ltd. At current market price, Reliance Nippon Life Asset Management is worth more than Rs 5,000 crore.

Reliance says it is monetising several non-core investments

"The company has also announced its plans to monetise 49 percent stake in Reliance General Insurance Company Limited (which is presently 100 percent owned), and the DRHP has recently been filed with SEBI," it said. In addition, the company is at an advanced stage of monetisation of several of its non-core investments.

Reliance Capital, Reliance Nippon and Reliance General Insurance are part of the Reliance Group, run by business tycoon Anil Ambani.

Based on the above, the company is likely to realise minimum proceeds of Rs 10,000-12,000 crore in the coming 3-4 months, and slash its debt substantially by 50-60 percent, apart from clearing all short term maturities, it added.