At 10:05 am, the stock was trading 3.46 per cent lower at Rs 87.8 per share. In comparison, the Nifty was trading 0.25 per cent higher.
"The downgrade reflects the company's increased exposure to its group companies for which the company had guarantees and post-dated cheques amounting to Rs 283 crore," the ratings agency said in its ratings rationale, adding that these contingent liabilities could materialise in this fiscal elevating concerns on "liquidity position, credit metrics and refinancing risks".
Ind-Ra said it will continue to monitor the company's liquidity and levearge levels.
"Delays in planned deleveraging, difficulties in refinancing and/or additional support to group companies could further impact the company’s credit metrics and liquidity. The RWN implies that while the rating could be downgraded further, an affirmation may be driven by timely progress of stake and/or land sale as envisaged," it said.
Overhang of increased leverage at the group level, significant exposure to other group entities and ambiguity around auditors opinion on the impact of these exposures were some if the other reasons highlghted by the agency, which it belived, could constrain the ratings even in an improving scenario in the credit metrics.