ICRA revises IVRCL’s long term rating

IVRCL Ltd. | Engineering - Construction | Construction & Infrastructure | BSE: 530773 | NSE: IVRCLINFRA

01 Dec 2011 Evaluate

ICRA has revised the long term ratings, which was assigned earlier to IVRCL’s Rs 100 crore term loans, Rs 866 crore fund- based facilities and Rs 3,709 crore non-fund based facilities from ‘A+’ to ‘A’. The credit rating agency has re-affirmed the short-term rating of A1 assigned earlier to the Rs 309 crore fund-based facilities and the Rs 841 crore non-fund based facilities of IVRCL. The long term ratings carry a Stable outlook.

The revision of IVRCL’s long term rating reflects the impact of the amalgamation of IVRCL Assets and Holdings (IAHL) on its credit risk profile. IAHL is the holding company for all the developmental projects implemented by the group, thus the amalgamation will increase IVRCL’s funding requirements as it will have to support the infrastructure projects (operational and under development) in terms of equity commitments, cost overruns and also to bridge the cash flow mismatches during the operations period.

The ratings also take into account the deterioration in the financial performance of the company as reflected by decline in the net profit on account of the rising interest cost and consequent weakening of the debt coverage indicators. The ratings, however, continue to draw comfort from the healthy order book position and the established position of IVRCL in the Indian Infrastructure sector.

IVRCL is engaged primarily in providing Engineering, Procurement, Construction and Commissioning services in major infrastructure segments including urban or rural water supply, irrigation and environment related projects, pipelines, power projects (substations and transmission & distribution Lines, buildings and industrial structures, roads and bridges