Shares of Jain Irrigation Systems surged as much as 10 percent on Monday after the stock tanked to its 52-week low last week on India Ratings and Research downgrading the company's long-term issuer rating to ‘IND BBB’ from ‘IND A-’.
The stock rose Rs 27.40 per share intraday on the Bombay Stock Exchange. At 11.37 AM, it was trading 10.2 percent up at Rs 26.80 per share, while the Sensex was down 62.27 points, or 0.16 percent at 39,132.22.
Last week, the rating agency said, "The downgrade reflects deterioration in the liquidity profile of Jain Irrigation Systems on account of a delay in the realisation of its receivables from its micro-irrigation systems segment."
"The RWN reflects the risk of delay in the company's deleveraging plans or a further increase in its working capital requirement, resulting in further worsening of its liquidity position." it further added.
The company's overall debt stands at around Rs 4,900 crore and its working capital is approximately at Rs 1,900 crore. It's cash and cash equivalents have significantly reduced in a year from Rs 400 crore to Rs 100 crore.
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