CARE reaffirms and withdraws outstanding ratings on bank facilities of AGC Networks; stock ends 5% higher

The credit rating agency has withdrawn CARE BBB-; Stable/CARE A3 rating on request from the company.

Mar 25, 2021 04:03 IST India Infoline News Service

CARE has reaffirmed and withdrawn the outstanding ratings of ‘CARE BBB-; Stable/CARE A3’ assigned to the bank facilities of AGC Networks Limited (AGC) with immediate effect.

“The above action has been taken at the request of AGC and ‘No Objection Certificate’ received from the banks that have extended the facilities rated by CARE,” the company shared CARE Rating rationale in a regulatory filing on Thursday.

AGC Networks Ltd ended on a bullis note on Thursday amid the bearish markets. It ended Rs1,161.20 per piece up by Rs55.25 or 5% from its previous closing of Rs1,105.95 per piece on the BSE.
The rating factors in the comfort from progress in terms of equity infusion by promoter entity, with Rs73cr out of the total Rs225cr already received by AGC on January 08, 2021 in the form of allotment of warrants and improved performance during 9MFY21 resulting in positive net-worth as on December 31, 2020.

It further said, the rating continues to derive strength from experienced promoters (viz. Essar group) and management, the company’s sound technical knowhow and domain expertise translating in to significant improvement in performance of AGC’s subsidiary viz. Black Box Corporation Limited during FY20 and 9MFY21.

The rating also continue to factor in strong and diversified client base, diversified capabilities in Information and Communication Technology solutions, improved collection period in FY20 marked by securitization of receivables, and significant decrease in corporate guarantee extended to subsidiary. The ratings are however tempered by competitive nature of the IT/ITeS industry and foreign exchange risk faced by the company.

Related Story

Open Free Demat Account (Rs699)