Fitch cuts Mudra Lifestyle debt to F3(ind)

Fitch Ratings said it downgraded the short-term rating of Mudra Lifestyle Ltd.'s Rs.440 million short-term debt to F3(ind) from F2(ind). Fitch also said it affirmed its national long-term rating at BBB(ind) and its Rs.1.3 billion long-term loan and its Rs.580 million cash credit limits at BBB(ind).

The outlook was changed to negative from stable, reflecting ongoing capital expenditure and the higher refinancing risk in the short-to-medium term, Fitch said.

The outlook further reflects the company's fresh Rs.1.4 billion debt-led capital expenditure program, which is expected to delay the process of deleveraging beyond 2010, as originally envisaged, the agency said.

Higher receivables and inventory pile-ups will continue to result in increased liquidity pressures, Fitch said.

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