Sintex Industries has defaulted on its interest payments and principal repayments aggregating to about ₹89 crore on non-convertible debentures.

In a disclosure to stock exchanges, the Gujarat-based textiles maker, which caters to both domestic and export markets, said this default affects six investors who have taken the private placement route. The company has defaulted on secured 7-year NCDs with a 10.7 per cent coupon.

The present liquidity crisis is temporary and will not affect the company’s operations, Sintex clarified.

According to its shareholding pattern as on March quarter, 84.01 per cent of the promoter’s shareholding have been pledged. The promoters hold 28.61 per cent in Sintex.

Industry watchers opined that the problems of Sintex Industries stems from a liquidity crisis. Amit Patel, Group Managing Director, in a recent investor presentation had said that domestic liquidity and collections continue to squeeze.

“The industry is facing a turbulent scenario, with a glut in overseas markets coupled with US-China trade war, the realisation in the domestic markets too has shrunk for the quarter under review resulting in a hit on the EBITDA margins. It will gradually improve as the industry stabilises and the trade war subsides,” said Patel.

EBITDA margins have remained at 14 per cent in 2019, the same as 2018 fiscal.