Mumbai, Aug. 28: Credit Analysis & Research Ltd (CARE) today revised downwards its rating of outstanding bond issues guaranteed by the Maharashtra government.
The ratings were revised downwards from CARE+ (SO) to CARE A-(SO)—a downgrade by two notches. This makes it a notch below Rajasthan and Gujarat, who would now by default enjoy a higher rating than Maharashtra. However, it still signifies adequate safety.
The downgrade would affect outstanding bond issues of Maharashtra Krishna Valley Development Corporation, Konkan Irrigation Development Corporation and Vidarbha Irrigation Development Corporation.
Tapi Irrigation Development Corporation, Maharashtra State Road Development Corporation and Maharashtra State Electricity Board are among the other state government undertakings which will be hurt by the CARE downgrade.
CARE said the rating revision factors in the dependency of the above mentioned entities on the state government to service the bond issues. The revision of the implicit rating of the state government primarily takes into account the instances of delays in interest payments on some of the bond issues backed by the state guarantee.
Maharashtra government’s finances continue to suffer from fiscal stress as evidenced in high deficit levels in 2001-02, CARE said.
The Maharashtra government proposes to corporatise MSEB into separate generation, transmission and distribution companies within a year, a white paper on the power sector reforms in the state has said.
“The MSEB will be restructured in order to promote and encourage efficiency, autonomy and accountability in decision making and functional specialisation,” the white paper, which was released after a Cabinet meeting here today, said.