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Shares of Bharti Airtel plummeted as Moody's placed the company under review for downgrade. The stock fell as much as 5.7 per cent to over one-week low of Rs 288.7.
Rating agency Moody's had on Thursday placed on review for downgrade the 'Baa3' issuer and senior unsecured rating of Bharti and the ratings on the backed senior unsecured notes issued by Bharti's unit Bharti Airtel International (Netherlands) B.V.
“The review for downgrade is primarily driven by our expectation that Bharti's cash flow generation will remain weak and leverage elevated,” Moody's said.
The rating agency said the review also reflects the company's low levels of profitability, particularly from its core Indian mobile operations, negative free cash flow and higher debt levels to fund capital spending.
“... we believe a more rational competitive environment in India's telecommunications market is unlikely over the next 12-18 months,” Moody's added.
Bharti Airtel stock was the top percentage loser on the NSE index, which was down 0.2 per cent as of 0410 GMT. About 2.6 million Bharti shares changed hands, vs their 30-day moving avg of 6.5 million shares. Up to last close, the stock had fallen 42.2 per cent this year.
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