ICRA reaffirms ratings assigned to bank lines of Honda Siel Cars India
BS Reporter / Mumbai Jul 02, 2010, 13:29 IST
ICRA has reaffirmed the LAA+ rating to Rs 425.5 crore fund based working capital facilities of Honda Siel Cars India Limited (HSCIL).
ICRA has also assigned a stable outlook to the long term rating. The rating reaffirmation continues to factor in HSCIL’s strong parentage {97.4% stake held by Honda Motor Company Ltd, Japan (HMC) rated A1/Stable/ Prime 1 by Moody’s Investors Services}, access to HMC’s product portfolio besides the healthy market share in the addressable segments (Upper C, Lower D, Upper D) of domestic passenger car market in India.
According to ICRA, HSCIL also benefits from the strong brand of the parent besides the technical, financial and management support. HSCIL continues to be significantly dependent upon single model (City) with some of its models (Civic and Accord) having witnessed decline in volumes in the recent past with increased competitive pressures in domestic car market. Nevertheless, ICRA believes, with the parent support the company would be able to maintain its product renewal cycle to withstand competitive pressures.
HSCIL was promoted as a joint venture by HMC and Siel Holding Limited in December 1995 to manufacture and market cars in India. Currently, HMC holds 97.4 per cent stake in HSCIL with the balance being held by Siel Holding Limited.
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ICRA has reaffirmed the LAA+ rating to Rs 425.5 crore fund based working capital facilities of Honda Siel Cars India Limited (HSCIL).
