The credit rating of Hero Electric Vehicles Private Ltd, led by Naveen Munjal, has been downgraded due to the company’s default on its loans and its current liquidity crisis. The Indian government has withheld over ₹500 crore of FAME-II subsidies, further worsening the financial situation for the company. As a result, credit ratings agency Crisil has downgraded Hero Electric’s long-term and short-term ratings from Crisil B and Crisil A4 to Crisil D.

Hero Electric, a leading manufacturer of electric two-wheelers, is now facing the consequences of its financial struggles. The default on its loans and the liquidity crunch have had a significant impact on the company’s creditworthiness. The government’s decision to withhold the FAME-II subsidies, which are meant to promote the adoption of electric vehicles, has only added to Hero Electric’s woes.

Crisil’s downgrade of Hero Electric’s ratings reflects the company’s weakened financial position. With a lower credit rating, the company may face difficulties in accessing credit from banks and financial institutions. It also raises concerns for the company’s stakeholders, including investors and suppliers.

Despite the challenges, Hero Electric remains committed to its goal of increasing the adoption of electric vehicles in India. The company has been investing in research and development, as well as expanding its product portfolio. However, the liquidity crunch and the withholding of subsidies have significantly hindered the company’s operations.

As the electric vehicle market continues to grow in India, it is essential for companies like Hero Electric to have access to capital and financial support. The government’s support in the form of subsidies is crucial for promoting the widespread use of electric vehicles and achieving sustainability goals. Hero Electric’s rating downgrade highlights the challenges faced by companies in the electric vehicle sector and underscores the need for a supportive policy environment for the industry to thrive.