Mumbai: Domestic rating agency Icra has said its rating on the Rs 1,550-crore bonds issued by the Punjab Infrastructure Development Board (PIDB) has not been impacted by the controversy surrounding missing foodgrain stocks in the state. “The developments have no material impact on the credit quality of the PIDB or its ability to service the Icra-rated debt,” the agency said in a note. Foodgrain stocks procured by the Punjab government worth Rs 20,000 crore are allegedly missing from the state’s godowns. Some 30-odd banks, led by SBI, had extended loans of Rs 12,000 crore to the state for procuring foodgrain for the FCI on behalf of the Centre.
The RBI has asked banks to make provisions for the suspected bad loans, which led them to reportedly stop further lending to the biggest agricultural state in the country. In the note, Icra said its view is based primarily on the healthy infrastructure fee collections by PIDB in recent years and its comfortable liquidity position. Infrastructure fee collections have grown at 19 per cent per year between 2011-12 and 2014-15 to Rs 1,042 crore, it said, adding that its revenue is likely to be augmented further by the levy of infrastructure fee on diesel, electricity and immovable property.
Noting that PIDB has a limited dependence on the state government, the agency said it has a ‘BBB SO’ rating on all the four bonds issued by it. Icra, however, was quick to add that the rating is limited to PIDB’s outstanding bonds and the assessment does not represent its views on the general credit quality of the issuer. It can be noted that Icra’s peer India Ratings had earlier said Punjab’s finances are in a “precarious” situation. “Financial situation of Punjab, particularly with respect to liquidity, has remained quite precarious over the past few years… The situation has deteriorated considerably now,” it had said. PTI
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