Fitch assigns F1 rating to short term programme of Era

NEW DELHI: Rating agency Fitch on Wednesday assigned highest credit rating 'F1' to the Rs 100-crore short term debt programme of Era Infra Engineering Ltd.

The debt programme runs into two different issues - Rs 50 crore commercial paper and Rs 50 crore short term debt paper.

The rating is supported by the established operations of the company and stable cash flows from the contract construction business, Fitch said in a release.

The company is transitioning from a contractor to engineering, procurement and construction, to a player in the infrastructure segment with an entry into Build Operate Transfer road projects.

Era's ratings are constrained on account of increased working capital and capex requirements, which have increased the company's financial leverage substantially, and greater execution and project management risks associated with the large projects that it is taking on, it said.

Era operates in the construction space of sectors like railways, roadways, power, industrial construction and residential and commercial construction.