Crisil, the rating agency, has downgraded the country's biggest real estate player, DLF, raising concerns over the company's high debt.
A statement by DLF said the downgrade has been triggered by Crisil's assessment that its debt levels may remain high due to its inability to raise funds for reducing the debt through sale of its assets amidst a weakening economic situation.
The filing was made after close of trading hours on the BSE.
"It will not have any impact on the company's ability to raise funds or service its debt. The downgrade is due to worsening macro-economic conditions," said Saurabh Chawla, executive director-finance, DLF.
He added that the company would be able to raise around Rs 7,000 crore through sale of land assets, exiting from the hospitality business and from projects which do not form part of its business plan for the next three to four years. Of this, while Rs 1,500 crore has already been raised, the company expects to raise another Rs 2,000 crore before March.
"The downgrade means that in the short run the stock of the company may suffer losses, but long- term investors should stay put in the company and not exit by booking a loss," said a Mumbai-based analyst who did not wish to be named.
He, however, cautioned new investors to avoid investing as the company's borrowing ability could be impacted in the short-run.
DLF has seen its debt go up in 2011 due to the slower pace in launching new projects. Shares of DLF were down by 3.01% or Rs 5.8 on Thursday at Rs 186.8.