Aban Offshore shares jump 17%

Rating agency Care revised rating of Aban's bank facilities from D to BB-

Shares of Aban Offshore jumped 17 per cent on Monday after Credit Analysis and Research  upgraded its rating on the offshore drilling firm's bank facilities.  Shares ended at Rs 490.7, up Rs 72.85, or 17.4 per cent.

Rating agency Care, which revised upwards the rating assigned to Aban's bank facilities (from D to BB-), said in a note, "The revision in the ratings assigned to the bank facilities of Aban takes into account improvement in capital structure consequent to mobilisation of fresh equity, improvement in the financial performance and completion of refinancing of debt at the group level."

Shares of the company were under pressure in the past few months, amid a decline in global crude oil prices.

 

Analysts are of the view Aban is fairly insulated from sharp drop in oil prices as its contracts are long-term in nature.

After today's surge, the gain in Aban's share price this year is in line with the market at around 27%.

The stock has a 12-month price target of Rs 750 according to consensus analysts' estimates provided by Bloomberg.