The stocks of Fortis Healthcare and Religare slumped on Monday after India Ratings downgraded the holding firm's non-convertible debentures.
Some loans and non-convertible debentures held by RHC Holding Pvt Ltd were downgraded to default levels of "IND D" and "IND C".
The credit ratings agency said RHC defaulted on coupon obligations for NCDs due on June 27, amounting to principal of Rs 200 crore ($31.08 million).
"The downgrade of ratings on other debt instruments reflects an impaired debt servicing capability due to a stretched liquidity position," said India Ratings.
The Religare stock closed 4.44 percent or 5.20 points lower at 112 level. It hit an intra-day low of 107.15 on the BSE. On an year to date basis, the stock is down 55 percent.
The Fortis Healthcare stock too closed 8.07 percent or 13 points lower at 149.75 level on the BSE. The stock hit an intra-day low of 144 level.
On an year-to-date basis, the Fortis healthcare stock is down 17.33 percent
Previously the credit rating agency had a rating of "IND A" for some of RHC's NCDs and loans, while others were unrated.
"The downgrade of ratings on other debt instruments reflects an impaired debt servicing capability due to a stretched liquidity position," said India Ratings & Research.
India Ratings also put three Religare Group firms- Religare Enterprises, Religare Finvest and Religare Housing Development Finance-on under negative ratings watch list.
On July 13, CARE Ratings downgraded the rating of Religare Finvest Limited (RFL), a subsidiary of the company, from 'CARE AA-(Outlook Negative) ' to 'CARE A' with respect to RFL's Non-Convertible Debentures (NCDs) of Rs 332.05 crore.
The outstanding amount of these NCDs as on date was Rs 108.92 crore.
The revision in ratings of said NCD of RFL by CARE Ratings takes into account the issues as highlighted in the qualification/observations made by the auditors of RFL in the audited annual financial statements for FY 2016-17, Religare said in a statement.
As of March 2017, Religare Enterprises has total consolidated debt of Rs 11,075.25 crore, while Fortis Healthcare has a debt of Rs 1,961.30 crore.
Religare Enterprises is a financial services company. The company is engaged in the business of broking in securities and commodities, lending and investments, financial advisory services, custodial and depository operations, portfolio management services, asset management and insurance, institutional equities and investment banking services to clients.
Fortis Healthcare is an integrated healthcare delivery service provider. The firm is engaged in establishing, maintaining, operating, running, managing or administering hospitals, medicare, healthcare, diagnostic, health aids and research centres.