Mumbai, Mar 9: The Credit Rating Information Services of India Ltd (Crisil) has downgraded the Rs 100-crore non-convertible debenture (NCD) programme of Arvind Mills Ltd (AML) from AA+ to AA. However, the rating agency has reaffirmed the P1+ rating assigned to Arvind Mills' Rs 35-crore commercial paper (CP) plan.The revision in rating is mainly on account of the increase in the financial risk profile of the company arising out of higher proportion of debt funding in the projects than originally envisaged and the continued financial support to the group companies.
AML's high safety category ratings reflect the company's strong business position in terms of international competitiveness in the cotton textile fabrics business resulting from its large installed capacity in denim, use of modern technology, association with leading international brands and availability of cotton in India.
In addition, the company has achieved consistent growth in the domestic branded garments business which offers highervalue addition. AML is primarily engaged in the manufacture of cotton textile fabrics and garments.Crisil has assigned a triple-A rating to the Rs 300-crore NCD programme of Tata Engineering & Locomotive Company Ltd (Telco). It has also reaffirmed the triple-A rating assigned to the Rs 34.35-crore debenture issue of Telco. The ratings indicate that the degree of safety regarding the timely payment of interest and principal on the instruments is the highest.The rating factors in the company's position as the flagship of the Tata group of companies, the company's strong market position in the Indian commercial vehicle market, well developed engineering skills and a strong sales and distribution set-up.
These strong positives are partly offset by the commercial vehicle industry's continuing susceptibility to industrial downturns and the project implementation and market risks associated with the company's small car project.Crisil has assigned a P1+ rating to the Rs 5-crore CP programme of Forbes Gokak Ltd. Therating reflects the strengths arising from diversification into various businesses and the company's ability to successfully circumvent the cyclicality in the textiles business through support from other equally strong businesses.
