According to a Crisil release, the outstanding ratings of `A' (pronounced single A) assigned to the Rs 50.2 million debenture issue and the FA+ (pronounced FA Plus) assigned to the fixed deposit programme of Magma have been placed on rating watch with negative implications in view of the difficult business environment for the non-banking finance companies, which has led to a slow down in the company's operations and deterioration in asset quality.

This is expected to lead to strain on the company's profitability. Crisil will announce its final view after the completion of the detailed review exercise.

Magma, a Calcutta based NBFC, is engaged in the business of leading and hire purchase financing, real estate leasing and bills discounting.