INSUBCONTINENT EXCLUSIVE:
Gati shares fell as much as 12.9% in the session before closing just off its lowsShares in Gati Ltd closed down 10 per cent on Monday after
ratings agency CARE downgraded the credit rating for the logistics company, citing a drop in profitability and decline in revenue from
operations.CARE cut its rating on Gati's long-term bank facilities to 'BBB' from 'A-', and downgraded short-term bank facilities to 'A3+'
from 'A2+', according to a regulatory filing.Shares in Gati, which focuses on courier work, fell as much as 12.9 per cent in the session
before closing just off its lows.Investors are paying closer attention to rating downgrades after the government rescued shadow banking firm
Infrastructure Leasing Financial Services (ILFS), whose rapid decline spooked investors and sent the markets lower.The rating agency said
Gati had raised additional debt in the fiscal year leading to higher repayment obligations in this fiscal year.The ratings agency said it
was also taking account of the risk associated with support extended by Gati to a hydro power company, Gati Infrastructure.Gati said in its
June quarterly report that it had extended a loan to the unit worth Rs 20.01 crore ($2.70 million), and was "confident" of recovering the
funds in due course.Gati had also said it gave operational advances worth Rs 20.15 crore to parties, which is "long overdue and the full
recoverability of which is doubtful".Gati said late on Monday that its "management does not envisage any risk arising from the corporate
guarantee extended to Gati Infrastructure Pvt Ltd".It also said volumes and performance were expected to improve in the upcoming festive
