Care downgrades credit rating of HAL’s ₹7,300 crore bank facilities

Care Ratings has downgraded long- and short-term bank facilities of Hindustan Aeronautics Limited worth ₹7,300 crore to AA ‘plus’ with a stable outlook.

The rating revision of bank facilities of Hindustan Aeronautics Limited (HAL) factors in the change in operating environment involving reduced advance funding by customers and build-up of receivables position translating into increased reliance on working capital debt.

“Earlier, HAL used to receive significant advance funding and milestone payments resulting in negligible borrowings and robust liquidity. However during FY19 delay in disbursement of sanctioned budget resulted in high receivables position and reduced cash balances.