The agency has placed the company's LT rating under 'rating watch with negative implications'.

Offering the rating rationale, India Ratings said that the downgrade reflects a continuous deterioration in the consolidated credit profile with a further widening of EBITDA losses in 4Q FY23 and a stretched liquidity position.

The credit rating agency said that it had estimated SWREL's business and financial profile to improve in FY23 post the collection of the entire inter-corporate deposits given to the group entities and equity infusion by RNEL.

However, a slower-than-anticipated order inflows and operational loss from the legacy international projects resulted in a weak operating and financial performance in FY23.

The 'rating watch with negative implications' reflects uncertainty in cash flows to meet the large scheduled repayment obligations in FY24, which is likely to be met through a mix of receivables, project advances from new orders, claim receipt under the indemnity agreement and debt refinancing.

Sterling and Wilson Renewable Energy is one of the largest non-original equipment manufacturers and solar EPC player globally with a diversified presence across geographies.

The scrip advanced 1.67% to currently trade at Rs 300.55.

On the BSE, over 5.10 lakh shares of the company had changed hands at the counter as against an average trading volume of 0.55 lakh shares in the past two weeks.