CARE assigns A- rating to Shri Lakshmi Cotsyn

MUMBAI: CARE has assigned a 'CARE A-' rating to the proposed non-convertible debentures aggregating Rs 50 crore of Shri Lakshmi Cotsyn Ltd. Instruments with this rating offer adequate safety for timely servicing of debt obligations. Such instruments carry low credit risk. The NCDs would have maturity up to six years.

The rating factors in the consistent business growth in past, experience of promoters and management team, wide range of products including specialized products for defence sector and addition of higher value-added products.

However, stabilization of new product range including marketing tie-up and successful implementation of on-going & planned diversifications are key rating sensitivities.

Shri Lakshmi Cotsyn is engaged in manufacturing of blended suiting & shirting, microdot fusible interlining, industrial/technical fabric, embroidery, lace fabric and quilted fabric. The products mainly cater to lower to medium segment of market in the garment manufacturing.

The company recently diversified into manufacture of denim, terry towels, wider width sheeting and bottom weight fabrics. The project was completed in Sep 2006 at a cost of Rs 264 crore, financed through a term loan of Rs 185 crore, preferential equity of Rs 62 crore and internal accruals of Rs 17 crore.

Shri Lakshmi Cotsyn currently has a total installed capacity of 79.2 mmpa for processing of cotton and synthetic fabric and 3000 tpa for terry towels. The company has installed weaving capacity for 38 mmpa for denim, bottom weight fabric & wider width sheeting and 3000 tpa for terry towels.