CRISIL revises fundamental grade of Electrosteel Castings

Revision a results of financial stress faced by the company's associate Electrosteel Steels Ltd

CRISIL Research has revised fundamental grade of Electrosteel Castings Ltd (ECL) to 2/5 from 3/5. 

 

The revision in ECL’s fundamental grade is a result of the financial stress faced by its associate Electrosteel Steels Ltd (ESL) and the delay in getting approval for its iron ore mine, CRISIL said in a statement. 

 

“The grade indicates that the company’s fundamentals are ‘moderate’ relative to other listed equity securities in India” CRISIL statement added.  

 

CRISIL has also revised the fair value of the share from Rs 45 per share to Rs 25 per share. 

 

Rating agency have however clarified that the grades are not a recommendation to buy, sell or hold the graded instrument, or a comment on the graded instrument’s future market price or its suitability for a particular investor. 

 

“Along with cost overruns and execution delays, the steel project is facing project stabilisation difficulty owing to the tough macroeconomic situation” rating agency said. 

 

ECL has approached lenders for debt restructuring.