Care Ratings agency has downgraded the creditworthiness of Reliance Capital Ltd, Anil Ambani’s financial services company, citing diminished fundraising ability and defaults by his subsidiaries.

Reliance Capital is now rated triple-B, down three notches from single A for three sets of debt instruments: Long-term debt, subordinated debt and market-linked debentures. It is only two notches above junk.

Care said Reliance Capital’s financial risk profile has been hit by depletion of liquidity, high dependence on planned disinvestments for debt servicing, and delays in disinvestments yielding fruit.

Reliance Capital has protested against the downgrade and said that Care has not fully factored in the impact of its plan to raise more than Rs 100 billion ($1.42 billion) via asset sales and reduce its overall debt by more than half this financial year.

It pointed out that the last rating action happened four weeks ago and since then there has been no adverse change in the company’s operational parameters.

Reliance Capital is also in the process of selling its holdings in several assets to raise funds including its entire stake in Reliance Nippon Life Asset Management Ltd.

The financial services firm is the last stronghold in embattled tycoon Anil Ambani’s phone carrier-to-power empire, which has been beset by financial woes that earlier this year threatened to land the businessman in jail.

Read: Mukesh Ambani bails out younger brother Anil

Last month, Care Ratings downgraded long-term bank facilities worth 127 billion rupees (US$1.8 billion) held by another Anil Ambani firm Reliance Commercial Finance from Care BBB+ to Care D.

Read: Anil Ambani firms face rating downgrades

Anil Ambani’s telecom arm Reliance Communications has already applied for bankruptcy proceedings – the first Reliance Group company to do so.

Read: India’s RCom lenders to claim US$12 billion