Setco Automotive Limited has informed stock exchanges that its subsidiary, Setco Auto Systems Private Limited, has received a significant credit rating downgrade from ICRA Limited. The rating agency revised the credit rating from [ICRA] B-(Stable) to [ICRA] D across all debt instruments, effective September 3, 2025.
The downgrade affects the subsidiary's entire debt portfolio valued at Rs 585 crores, comprising long-term non-convertible debentures worth Rs 565 crores and proposed non-convertible debentures of Rs 20 crores. All instruments previously carried a B-(Stable) rating, which indicated adequate credit quality with moderate credit risk.
The new 'D' rating signifies that the instruments are in default or are expected to be in default soon, representing the lowest investment grade on ICRA's rating scale. This classification indicates substantial credit risk and suggests potential difficulties in meeting financial obligations.
Setco Automotive Limited, listed on both BSE (Company Code: 505075) and NSE (Scrip Symbol: SETCO) with ISIN INE878E01021, disclosed this information in compliance with SEBI listing regulations. The company's notification to stock exchanges was signed by Company Secretary Hiren Vala.
The credit rating agency's detailed assessment and press release regarding this downgrade is available on ICRA Limited's official website. This development may impact the subsidiary's ability to raise funds and could influence investor sentiment toward the parent company's financial stability and operational performance.
The downgrade comes at a time when automotive sector companies face various operational and financial challenges, making access to credit markets increasingly important for business continuity and growth initiatives.