India Ratings assigns Jubilant Ingrevia 'IND AA' rating

Credit ratings agency India Ratings and Research (Ind-Ra) assigned Jubilant Ingrevia (JVL) a long-term issuer rating of 'IND AA' with a stable outlook.

The ratings agency assigned a credit rating of 'IND AA/Stable/IND A1+' on the company's fund-based limits of Rs 475 crore. It has assigned 'IND A1+' rating on the non-fund-based limits of the company worth Rs 772.5 crore.

India Ratings and Research said that it has taken a consolidated view of JVL and its wholly-owned subsidiaries Jubilant Infrastructure ('IND A-'/Stable), Jubilant Lifesciences International, Jubilant Lifesciences NV, Jubilant Lifesciences USA Inc. and Jubilant Lifesciences Shanghai to arrive at the ratings, given the strong operational and strategic ties among them.

Effective 1 February 2021, the life science ingredients (LSI) business of Jubilant Life Sciences was demerged to JVL. The demerger was carried out to create separate and focused entities for the pharma and LSI businesses to unlock shareholder value and generate greater operational efficiencies, along with a dedicated management structure. JVL's business comprises specialty chemicals (SC; 34% of 9MFY21 sales;), nutrition and Health solutions (NP; 18%;) and life science chemicals (LSC; 48%;) businesses.

JVL has presence across three segments in SC, nutrition and health solutions and LSC, with healthy levels of backward integration and a leading market position. The ratings factor in the healthy balance sheet post business carve out of pharma business with JVL holding only long-term debt, which is not significant.

JVL is an integrated life science products company and provides innovative solutions to pharmaceutical, nutrition, agrochemical, consumer and industrial customers. The company's portfolio also extends to custom research and manufacturing for pharmaceutical and agrochemical customers on an exclusive basis. The company has five manufacturing facilities located in Gujarat, Maharashtra and Uttar Pradesh.

The scrip jumped 9.51% to end at Rs 571.85 on Friday.

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