Jan 20, 2010 03:38 PM
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(Updated Jul 31, 2010 12:31 PM)
Facilities/instruments with ‘Double A’ ratings are considered to offer high safety for timely servicing of debt obligations. Such facilities/instruments carry very low credit risk.
Facilities/instruments with ‘PR One’ rating would have strong capacity for timely payment of short term debt obligations and carry lowest credit risk. Within this category, facilities/instruments with relatively better credit characteristics are assigned PR1+ rating.
The ratings draw strength from the long & satisfactory track record of the company, established experience of the promoters, satisfactory capacity utilisation, operating efficiency arising out of various backward integration initiatives undertaken by the company, satisfactory clientele, significant presence in the export market, improving financial position with high profitability margins and favourable industry scenario for pipes in view of continuous emphasis on water infrastructure development by Government.
The ratings also factor in volatility in input & finished goods prices, risk associated with implementation of large ongoing projects & higher level of debt being availed to finance the same, substantial equity investment envisaged in the greenfield steel project of Electrosteel Integrated Ltd.
