Shares of PC Jeweller Ltd. fell over 8 percent to touch its 52-week low of Rs 20.80 on Wednesday after CARE Ratings downgraded the medium-term instrument of the company.
The rating agency downgraded the ratings of the fixed deposit programme of the company to CARE D (FD).
The revision in the rating factors in stressed liquidity position and deterioration in the financial flexibility of the company which has led to instances of devolvement of Letter of Credits (LC) and overutilisation in its working capital limits for more than 30 days.
The rating further factors in continuous decline in market capitalization, declining cash and bank balance and moderation in the financial performance of the company in FY19 and H1FY20 as reflected by its declining revenue, stressed profitability, elongated operating cycle and deterioration in the debt coverage indicators.
“The CARE Rating is specifically for the company's fixed deposit programme which stands suspended from June, 2019 onwards and no fresh deposits has been accepted by the company thereafter. Further, to confirm that till date the company has never defaulted in any of its deposits repayment obligations,” the company clarified.
Earlier on December 9, CRISIL had also downgraded PC Jeweller’s long-term and short-term ratings to the bank loan facilities of the company to CRISIL D.
At 10:55 am, shares of PC Jeweller fell 5.93 percent to Rs 21.40 on the BSE.
