Motherson Sumi's proposed NCDs worth Rs 3,000 crore assigned IND AAA/Negative rating

Mumbai: Automotive component maker Motherson Sumi's proposed non-convertible debentures (NCDs) worth Rs 3,000 crore were assigned "IND AAA" rating with a negative outlook by India Ratings and Research, the company said on Monday.

The rating agency reaffirmed the rating for Motherson Sumi's other financial instruments, including the IND AAA/Negative rating for its existing NCDs worth Rs 500 crore.

NCDs are a debt bond with a fixed tenure. Investors receive regular interest at a decided coupon rate.


"The Negative outlook reflects a slower production ramp-up in the global auto volumes, coupled with lower operating leverage and deterioration in the credit profile of end-consumers, which could result in MSSL’s leverage remaining higher than Ind-Ra’s expectations," a note from India Ratings read.

"Additionally, continued losses at the company’s greenfield plants in Alabama and Hungary could be a drag on the performance, resulting in a higher leverage than the rating triggers."