CARE assigns ‘A+/PR1+’ rating to JMC’s proposed NCD & STD/CP issue
CARE has assigned a ‘CARE A+’ rating to the proposed non convertible debenture issue of JMC Projects (India) Limited (JMC) for Rs.40 crore. CARE has also assigned a ‘PR1+’ rating to the proposed short term debt (including CP) issue of JMC for upto...
By INDIATIMES NEWS NETWORK |
MUMBAI: CARE has assigned a ‘CARE A+’ rating to the proposed non convertible debenture issue of JMC Projects (India) Limited (JMC) for Rs.40 crore. CARE has also assigned a ‘PR1+’ rating to the proposed short term debt (including CP) issue of JMC for upto Rs 20 crore, which is to be carved out of tied-up working capital limits.
CARE has also assigned a ‘CARE A+’ rating to the long term bank loans and facilities and a ‘PR 1+’ rating to the short term bank loans and facilities of JMC for an aggregate amount of Rs 497.75 crore, including outstanding term loan March 31, 2007 of Rs .7.75 crore, fund based working capital sanctioned limits of Rs 65 crore and non-fund based sanctioned limits of Rs 425 crore.
The ratings take into account JMC’s sound parentage in the form of its status as a subsidiary of Kalpataru Power Transmission Ltd, its proven project execution capabilities, diversified presence in the construction sector, strong order book position and improved financial position. The long term rating is, however, constrained by relatively short track record of profitability and lack of presence in high margin segments of infrastructure sector.
JMC, incorporated in 1986, operates in three distinct business areas in the construction sector sector viz. buildings (51 per cent of total revenue in 2006-07), infrastructure (26 per cent) and industrial & power (23 per cent).
During 2004-05 (April-March), Kalpataru Power acquired 32 per cent stake in JMC. As on March 31, 2007, Kalpataru Power held 52.27 per cent stake in JMC.
Kalpataru Power is a major player in transmission line tower and distribution infrastructure. For 2006-07, the company had registered total income of Rs 1,600 crore on a consolidated basis.
In 2006-07, JMC’s revenue increased by 74 per cent over 2006-07 due to strong order book position and enhanced level of operations through broadening of project execution capabilities.
Long term debt equity ratio and overall gearing improved significantly due to increase in networth on account of issuance of fresh capital through rights issue & warrants conversion and were comfortable at 0.12 times and 0.58 times as on March 31, 2007.
Interest coverage also improved in 2006-07 to 3.25. The current ratio as on March 31, 2007 improved to 1.17 times as compared to 1.04 times the previous year mainly due to infusion of long term working capital through fresh capital through rights issue/warrants conversion.
Growing focus on infrastructure development in the country is likely to impact the construction sector positively. Efficient project execution skills and better working capital & supply chain management are likely to be the key success factors in this business.
CARE has also assigned a ‘CARE A+’ rating to the long term bank loans and facilities and a ‘PR 1+’ rating to the short term bank loans and facilities of JMC for an aggregate amount of Rs 497.75 crore, including outstanding term loan March 31, 2007 of Rs .7.75 crore, fund based working capital sanctioned limits of Rs 65 crore and non-fund based sanctioned limits of Rs 425 crore.
The ratings take into account JMC’s sound parentage in the form of its status as a subsidiary of Kalpataru Power Transmission Ltd, its proven project execution capabilities, diversified presence in the construction sector, strong order book position and improved financial position. The long term rating is, however, constrained by relatively short track record of profitability and lack of presence in high margin segments of infrastructure sector.
JMC, incorporated in 1986, operates in three distinct business areas in the construction sector sector viz. buildings (51 per cent of total revenue in 2006-07), infrastructure (26 per cent) and industrial & power (23 per cent).
During 2004-05 (April-March), Kalpataru Power acquired 32 per cent stake in JMC. As on March 31, 2007, Kalpataru Power held 52.27 per cent stake in JMC.
Kalpataru Power is a major player in transmission line tower and distribution infrastructure. For 2006-07, the company had registered total income of Rs 1,600 crore on a consolidated basis.
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In 2006-07, JMC’s revenue increased by 74 per cent over 2006-07 due to strong order book position and enhanced level of operations through broadening of project execution capabilities.
Long term debt equity ratio and overall gearing improved significantly due to increase in networth on account of issuance of fresh capital through rights issue & warrants conversion and were comfortable at 0.12 times and 0.58 times as on March 31, 2007.
Interest coverage also improved in 2006-07 to 3.25. The current ratio as on March 31, 2007 improved to 1.17 times as compared to 1.04 times the previous year mainly due to infusion of long term working capital through fresh capital through rights issue/warrants conversion.
Growing focus on infrastructure development in the country is likely to impact the construction sector positively. Efficient project execution skills and better working capital & supply chain management are likely to be the key success factors in this business.
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