Pain for B M Khaitan group companies mounted Tuesday after a rating agency downgraded long-term credit rating for dry cell battery-maker Eveready with a negative outlook.
Eveready Industries India Ltd (EIIL) hit the lower circuit after it tanked 19.99 per cent on the BSE to close at Rs 116.85. On the NSE, it plunged by 20 per cent to close at 117.20 per share at the end of the day's trade.
Credit ratings agency India Ratings & Research (Ind-Ra) has downgraded the long-term credit rating of Eveready with a negative outlook.
McLeod Russel, another group company of the B M Khaitan Group, also crashed by 19.96 per cent to close at Rs. 61.15 per share on the BSE.
B M Khaitan resigned recently as non-executive chairman from both these companies although he will continue to be the chairman emeritus in both these firms.
Ind-Ra in its report said, "The downgrade reflects Eveready's continued high net leverage and weakened liquidity amid continuous financial support extended to group companies and delayed asset monetisation."
Ind-Ra estimates Eveready Industries to reduce debt by Rs 130-140 crore in FY20 for the leverage to reduce to an acceptable level, which can only be achieved by the sale of its Hyderabad assets or full repayment of Inter corporate deposits.
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