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Brickwork reaffirms credit ratings for bank facilities and fixed deposit of Bombay Dyeing

The long-term rating has been reaffirmed at BWR BBB+; the Negative and short-term rating at BWR A2.

December 24, 2021 10:08 IST | India Infoline News Service
Bombay Dyeing
Brickwork Ratings has reaffirmed the ratings for Bank Loan Facilities and Fixed Deposit instruments amounting to Rs562.04cr of The Bombay Dyeing and Manufacturing Company Limited.

The long-term rating on Fund Based Bank Facility Rs111.26cr (reduced from Rs250cr) and for Fund Based Fixed Deposit Rs0.78cr (reduced from Rs0.81cr) has been reaffirmed at BWR BBB+; Negative. The short-term rating on On Non-Fund Based Rs450cr has also been reaffirmed at BWR A2.

At around 10.10 am, Bombay Dyeing & Manufacturing Company Ltd was trading at Rs104.05 per piece down by Rs3.15 or 2.94% from its previous closing of Rs107.20 per piece on the BSE.

“The rating reaffirmation continues to factor in the completed status of the project with low execution risk, receipt of a part occupation certificate (OC) for the project, and potential future cash flows from the land bank in Mumbai. The rating also draws comfort from the established track record of, The Bombay Dyeing & Manufacturing Co Ltd, resourceful promoter group and composition of Board of Directors, with the seven independent directors,” company shared Brickwork Ratings rationale.

It further said that the ratings remain constrained on account of marketing risk for the unsold portion associated with the project on account of a relatively high ticket value and exposed to inherent cyclicality in real estate, volatility in the raw material price of the polyester staple fiber (PSF) industry due to its linkages to crude oil prices and competition in home textile segment and low profitability levels.

The rating outlook continues to remain negative on account of uncertainties associated with timely monetization of land parcels, sale of FSI, inventory deal and reducing the debt level from the current level.

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