Credit rating agency, India Ratings has upgraded Gallantt Ispat’s (GIL) long-term issuer rating to ‘IND B’ from ‘IND D’. The outlook is Stable. The rating agency has also upgraded rating of the company’s Rs 48 crore fund-based working capital to ‘IND B’ from ‘IND D’. Further, the rating agency has upgraded rating of the company’s Rs 6.62 crore non-fund-based working capital to ‘IND A4’ from ‘IND D’.
The upgrade reflects the company’s regular term loan repayments and interest payments for the six months ended December 2012, which were funded through internal accruals and financial support from an associate company - Gallantt Metal (GML).
The ratings continue to be constrained by the company’s weak liquidity as reflected in its operating cash flows inadequacy for debt servicing in FY13 (year end March) and high use (96%) of working capital limits for the nine months ended December 2012. Continuing inadequate cash flow amid delayed receipt of government subsidy has compelled the company to seek support from group companies/founders for debt servicing in FY13 as well.
Gallantt Ispat is engaged in the manufacturing and marketing of Sponge Iron, Mild steel billets, Re-Rolled products (TMT bars and Mild Steel Structural) and wheat flour products.
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