CESC

ICRA has lowered the rating for the proposed Rs 155.29-crore non-convertible debenture (NCD) issue of CESC Ltd, part of the RPG group, from `LA' to `LBBB+'.

The revised rating indicates moderate safety as opposed to the earlier rating of adequate safety. A deterioration in the financial risk profile, pending completion of the ongoing tariff revision process, an increase in transmission and distribution (T&D) losses and continuing losses in 1999-2000, are some of the reasons for the downward revision by ICRA.

In a note, ICRA explained that the essential nature of the business, significant improvement in generating efficiency, recent recovery in high tension industrial sales and continuing access to credit were factored in the rating. However, the fact that CESC has been incurring losses since 1997-98 and the steady erosion of net-worth are reasons for concern.