Intimation of change in credit rating from CARE Ratings Limited
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Awaiting price reaction for this filing.
CARE Ratings has downgraded Star Housing Finance Ltd's ₹300 crore long-term bank loan facilities from 'CARE BBB-; Negative' to 'CARE D', its lowest/default grade. The downgrade follows delays of 1–11 days in term loan repayments to six lenders in February 2026, due to severe liquidity stress. The stress was triggered by an investor's accelerated redemption of non-convertible debentures (NCDs), recalled after the company's CFO resigned leaving the position vacant, despite no covenant breach. Liquidity crashed from ₹20 crore on December 30, 2025, to just ₹2.91 crore by February 19, 2026, against ₹17.6 crore in debt obligations due in March 2026. CARE noted the company failed to disclose the NCD recall to the rating agency or stock exchanges, and auditors flagged liquidity stress including delays in salary payments.
This is a deeply negative development — the default rating triggers a likely breach of lending covenants, potentially accelerating further debt obligations and worsening the liquidity crunch. The stock could face sharp selling pressure, and the company may need emergency fundraising or asset sales to survive.