"The moderate safety rating reflects RPL's progress in implementation of the refinery project at Jamnagar, the capital structure of the company and the relevant factors having a bearing on margins for the refinery operations," a Crisil release issued on Tuesday said, adding that the rating incorporates the uncertainties relating to commissioning and stability of the project in respect of achieving the targeted capacity within the envisaged time frame.

Meanwhile, Icra has downgraded the Rs 14-crore NCD issue of Madras Fertiliser Ltd (MFL) from `LA-' to `LBBB-' indicating moderate safety and retained the rating assigned to the company's fixed deposit (FD) programme at "MA-", indicating adequate safety.

However, Icra has placed both the debt issues of MFL under rating watch, pending the government'sdecision to approve the financial assistance and capital restructuring plan (FACR), an Icra release said, adding that MFL's ability to meet its debt obligations and sustain its operations would critically depend on the approval of FACR plan.

"The losses incurred by MFL in 1997-98 and expected losses in 1998-99 are the primary reasons for the erosion in the net worth of the company," Icra said. It added that the revised rating also takes into account increase in business risk levels on account of the decline in cost competitiveness of MFL without support of subsidy.

Meanwhile, Icra has reaffirmed the `MAA' rating assigned to the FD programme of Canbank Factors Ltd (CBFL), indicating high safety. "The `A1+' rating, indicating highest safety, assigned to the Rs 10-crore short-term debt programme of the company, has also been reaffirmed for an enhanced amount of Rs 20 crore," Icra said.

"CBFL, promoted by Canara Bank, Sidbi and Andhra Bank, has been in the factoring business for the past eight years, andthe ratings assigned to its debt programmes factor in the leadership position of the company in this business, the support from its parent Canara Bank, high profitability, good asset quality and comfortable undrawn limits from banks and institutions," Icra said. The rating also takes into account the likely squeeze in profitability in future on account of competition from other types of lenders.

Meanwhile, Icra downgraded the rating for the convertible redeemable cumulative preference share programme of Prudential Sugar Corporation Ltd from `LBBB+' to `LBB', indicating inadequate safety owing to strained liquidity due to repayment obligations on outstanding term loans and the delay in the sanction of increased working capital limits, an Icra release said.