CARE downgrades debt instruments of Talwalkars group cos

CARE Ratings has downgraded long-term facilities and debentures issues of Talwalkars Health clubs Ltd and Talwalkars Better Value Fitness (TBVFL) due to reduced financial flexibility after a decline in share prices, according to regulatory filings. Talwalkars Health clubs Ltd (THL) in a filing on Thursday said that CARE Ratings has downgraded its 'long-term facilities' of Rs 280.74 crore to 'B' from A+ earlier.

Its non-convertible debenture issue of Rs 163.34 crore has also been downgraded to 'B' (under credit watch with negative implications) from A+ with a stable outlook earlier. "The rating agencies have revised the rating of the company due to the reduced financial flexibility of THL and its promoters, following the significant decline in the share price of THL and its group company, Talwalkars Better Value Fitness Limited (TBVFL), in the last two weeks," the filing said.

TBVFL in a separate filing said that CARE Ratings has downgraded its long-term facilities of Rs 84.20 crore to 'B' from A+ earlier. The agency also downgraded its non-convertible debenture issue of Rs 105 crore to 'B' from A+ earlier due to reduced financial flexibility.

The company said that another rating agency ICRA has downgraded its NCD issue of Rs 80 crore to 'B-' from 'BBB-', implying issuer is not cooperating. Shares of TBVFL declined sharply by 4.99 percent to hit the lower circuit limit of Rs 17.15 on BSE. The stock has plunged by more than 64 percent in the last fortnight.

Shares of Talwalkars Health clubs have also declined sharply in the last two weeks. The stock hit the lower circuit limit for the third straight day this week, closing at Rs 31.65 with a loss of 4.95 percent on BSE.