Mumbai: Crippled ILFS group faced Tuesday more embarrassments after India Ratings downgraded its various mutual fund schemes and placed them on a rating watch negative (RWN).The agency downgraded three series-1, three series- 2 and two series -3 mutual fund schemes of the group, "due to the deterioration in the underlying portfolio quality of the schemes due to its exposure to ILFS group entities.The RWN reflects absence of clarity on the resolution of the above referred assets in the portfolio due to the poor financial profile of the sponsor group, which ILFS, it said.All ILFS IDF schemes generally have an exposure of around 23.55 per cent in group companies --ILFS Solar Power and ILFS Wind Energy, whose credit profile has weakened.ILFS and its group companies are facing liquidity crisis and had defaulted on debt repayments.The rating agency said the ratings do not factor in the expectation of the default risk for the scheme itself, as a fund/scheme generally cannot default."The ratings should be interpreted as an opinion about the strength of the fund's investment policies, the expertise and experience of the sponsors and investment managers, and the scheme's vulnerability to severe losses," it said.The ratings also do not address the risk of a loss due to changes in the prevailing interest rates, credit spreads and other market conditions, the agency said, adding the comments on the adequacy of market value to address the extent to which fund expenses and costs may reduce distributions to unit holders.