Mumbai, July 5 : CARE Ratings has downgraded the credit rating of PNB Housing Finance's bank borrowings, non-convertible debentures, and fixed deposits to 'CARE AA' from 'CARE AA+'. The rating agency has also revised its outlook to stable from negative. In a statement, CARE said that the revision in the ratings of the NBFC can be attributed to deteriorating asset quality of the company with a rise in absolute gross NPAs. "The revision in the ratings of PNBHFL factor in deteriorating asset quality of the company with rise in absolute Gross NPAs to Rs 1,856 crore, translating in GNPA of 2.75 per cent on loan assets as on March 2020, up from 1.75 per cent as on December 2019 which has been mainly due to increasing stress levels in the underlying assets, especially in the company's corporate portfolio in recent years," it said. The wholesale loan book forms about 18 per cent of asset under management (AUM) as on March 2020, reduced from 21 per cent of AUM as on March 2019. The CARE Ratings statement noted that in view of the Reserve Bank of India's move to allow banks, NBFCs and HFCs to offer six-month moratorium to borrowers till August 31, 2020 there could be an impact on company collections in the near term which could lead to further weakness in asset quality of the company. The rating action also takes into account the delay in planned equity infusion as PNBHFL needs to raise substantial capital in order to bring down its on-book gearing levels, which has become especially important in view of the increased portfolio vulnerability of the wholesale book, it said. As per management of PNBHFL, the company intends to raise up to Rs 1,700 crore of capital via rights issue in the near term that would be crucial for sustaining the growth in its loan book and reduce its leverage levels. However, given the prolonged weak market sentiment, the ability of PNBHFL to raise capital in a timely manner remains a rating sensitivity, it said. /IANS