Indo Gulf Ncd Rated Aa+ By Care

The proposed Rs 100-crore non-convertible debenture issue of Indo Gulf Fertilisers and Chemicals Corporation has been rated AA+ by the Credit Analysis and Research (CARE). The rating indicates the high quality of the instrument.

The debentures are being raised to augment the long-term working capital resources of the company, a CARE release said. The company had diversified its operations and set up a copper smelter unit at Dahej at an estimated cost of Rs 2,440 crore. The phase I capacity of one lakh-tonne per annum was commissioned in May and the second phase of 0.5 lakh tpa is to be commissioned in December 2000, the release said.

 

"IGFL's profitability would critically depend on the early stabilisation of the copper project and its ability to maintain conversion costs within the treatment and refining charges," it said. The company enjoys a high import duty protection of about 22 per cent and 27 per cent for the manufacture of copper cathode and rods respectively.

IGFL's profitability was satisfactory as it had a guaranteed return under the price retention scheme for fertilisers and high operating efficiencies.

"As its retention price is lower than the normative referral price as recommended by the Hanumantha Rao Committee, the company will derive substantial benefits if the panel's recommendations are accepted," the release said.

The Rs 50-crore commercial paper issue of Grasim Industries has been rated PR1+ by CARE. The CP issue of Zandu Pharmaceuticals Works has also been assigned a similar rating. The C rating assigned to the fixed deposit programme of Genius Financial Services has been downgraded to D, indicating that the instrument is in default.