Credit rating agency, CARE has assigned ‘BB’ rating to Rungta Irrigation’s long-term bank facilities worth Rs 14 crore. The rating agency has also assigned ‘A4’ rating to the company’s short-term bank facilities worth Rs 8 crore. The ratings assigned to the bank facilities of Rungta Irrigation (RIL) are primarily constrained by its small and stagnant scale of operations, low profitability margins and elongated working capital cycle. The ratings are further constrained by vulnerability to changes in government policies along with competitive industry dominated by few large organized players.
Rungta Irrigation is engaged in the manufacturing of micro-irrigation systems (MIS) which constitutes sprinkler and drip irrigation systems; aluminum, polyvinyl chloride (PVC), and high density polyethylene (HDPE) pipes and fountains. The raw materials required primarily constitutes of HDPE/LDPE granules and PVC (Polyvinly Chloride) resin which are procured domestically.
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