ICRA places ratings of PFS under watch with negative implications
Rating agency ICRA has placed the rating of PTC India Financial Services Ltd (PFS) under watch with negative implications following the resignation of three independent directors of the company.
Such events (resignations) are likely to have a bearing on business operations and investor and lender confidence in the company in the short to medium term. These changes could also impact the ongoing asset quality related resolutions for the company, ICRA said in a statement. The debentures and long term bank facilities carry “A+” rating and short-term bank facilities and commercial paper carry “A1+”.
Three directors – Kamlesh Shivji Vikamsey, Thomas Mathew T and Santosh B Nayar – resigned on January 19, 2022 alleging lapses in corporate governance. PFS refuted the allegations and said it has been adhering to the best corporate governance practices under the guidance of its promoter (PTC India Ltd), the regulator and the Government of India.
ICRA said it favourably notes that PFS’ liquidity position is currently adequate with on balance sheet liquidity of Rs 410 crore compared to repayments of Rs 400 crore to be made till March 2022.
ICRA will continue to monitor developments. It will take suitable rating action when there is more clarity on the new board, the outcome of the probe by high-level panel, the impact on incremental fund raising and business growth prospects.
Last week, another rating agency CARE said it will continue to monitor the outcome of the internal probe and also any possible impact of resignations on PFS’s financial performance and its liability franchise.
Securities and Exchange Board of India (Sebi) already asked PFS to file an action taken report (ATR) within four weeks on corporate governance matters and issues raised by resigning directors. The capital market regulator director directed the company to address these issues before holding board meetings.
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