The rating for Balrampur Chinni Mills Ltd's Rs 20-crore short-term debenture programme has been upgraded by Crisil from P1 to P1+. The rating factors the company's strong market position in the sugar industry and its operating efficiency reflected by its sustained high recoveries and consistent product quality.
However, these points are partly offset by the risks associated with its presence in a highly regulated, cyclical and seasonal sugar industry and the debt-oriented capital structure of the company, according to a press release.
Balrampur, belonging to the Calcutta-based Saraogi group, is engaged in the manufacture and sale of sugar from its two sugar mills located in the eastern Uttar Pradesh. The total installed capacity of the two mills is 15,000 tonne of cane crushed per day (TCD). Balrampur has recently acquired a 71 per cent stake in Tulsipur Sugar Company Ltd, a sugar manufacturing unit located in eastern UP. Subsequent to this acquisition, the group's total sugar manufacturing capacity has gone up to 18,000 TCD.
