CRISIL has downgraded its ratings on the bank facilities and debt programme of Man Industries (India) to ‘BBB+/Negative/ A2’ from ‘A-/Stable/CRISIL A2+’. However, the rating on MIL’s Rs 1 billion non-convertible debentures has been withdrawn as these have not been placed; while the rating on the Rs 1 billion short term debt programme too has been withdrawn as there is no outstanding amount against it.
The rating downgrade also takes into account the group’s weaker-than-expected operating performance during the last two quarters ended March 31, 2012, and June 30, 2012, wherein MIL reported a year-on-year decline of 24 per cent and 30 per cent in revenues, respectively. Further, the ratings reflect the benefits that the Man group derives from the healthy prospects for the submerged arc welded (SAW) pipe industry, its established market position in the SAW pipe industry, and the group’s current order book.
MIL’s real estate subsidiaries have repaid all their debt and a sizeable part of the real estate portfolio is at an advanced stage of construction, which provides visibility to its consolidated cash-flows. These rating strengths are partially offset by the Man group’s average financial risk profile, marked by modest debt protection metrics and gearing, working-capital-intensive nature of operations, exposure to risks inherent in the real estate industry, and vulnerability to volatility in raw material prices.
| Company Name | CMP |
|---|---|
| Tata Steel | 210.95 |
| JSW Steel | 1257.25 |
| SAIL | 176.45 |
| Jindal Stainless | 775.60 |
| APL Apollo Tubes | 2022.35 |
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