CARE reaffirms Ramsarup rating, removes from 'Credit watch'

MUMBAI: CARE has reaffirmed the ���CARE A��� rating assigned to the long/medium-term bank facilities and the ���PR1��� rating to the short-term bank facilities of Ramsarup Industries Ltd. and the ���Credit watch��� has been withdrawn from the aforesaid ratings after evaluation of merger of Ramsarup Lohh Udyog Ltd and completion of all the formalities pertaining to the merger.

���CARE A��� rating is applicable for facilities having tenure over one year and ���PR1��� rating is applicable for facilities having tenure up to one year. The aforesaid ratings are assigned to the short-term, medium-term and long-term bank facilities aggregating Rs.1345.4 crore (enhanced from Rs.416.2 crore).

CARE has also retained the ���PR1��� rating for the short term debt up to Rs.170 crore (enhanced from Rs.120 crore) of RIL for a maturity up to six months. The STD limit should be carved out of the tied-up fund-based working capital facility of the company.

CARE has also retained the ���PR2+��� rating assigned to the STD programme of RIL for an amount up to Rs.25 crore for a maturity up to one year.

The ratings draw strength from Ramsarup���s long and satisfactory track record, experience of its promoters, company���s ability to offer whole range of TMT Bars to customers, satisfactory customer profile, empanelment with Power Grid Corp of India Ltd, improving profitability & financial position, backward integration initiatives to improve margins and synergies derived through merger of an associate company, Ramsarup Lohh Udyog.

However, the ratings are constrained by wide fluctuation in input prices, risks associated with implementation of large ongoing projects, high debt-equity & overall gearing ratios, cyclicality in business along with increased competition from unorganised sector players and present economic conditions in the country.

Future trend in sales price realisation vis-��-vis demand as well as key raw material prices, ability to maintain margins in the context of current downturn witnessed in the steel sector and successful implementation of the ongoing projects will remain the key rating sensitivities.