Credit rating agency Care has downgraded Vodafone Idea to CARE A with negative outlook on account of weak financial performance.
The development comes within two days of another rating agency Crisil downgraded credit value of Vodafone Idea.
“The revision in ratings assigned to the bank facilities/instruments of Vodafone Idea Limited (VIL) is on account of further deterioration in the operational and financial performance of the company during first quarter of financial year 2020,” CARE said in a statement.
The agency had earlier placed Vodafone Idea rating at CARE A+ with negative outlook.
CARE, however, acknowledged that Vodafone Idea was able to realise significant quantum of operational synergies post-merger, which is much ahead than the expected timelines.
“In the wake of prevalent high competition in Indian mobile telephone service industry thereby impacting the operating performance of the company will continue to remain as key monitorable,” CARE said.
Credit rating of a company reflects on its ability to pay back debt.
Vodafone Idea said the downgrade is on account of deterioration in the operational and financial performance of the company during April-June 2019 period although the company was able to realise significant quantum of operational synergies post-merger which is much ahead than the expected timelines.