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CRISIL upgrades ratings on Kesoram Industries' credit facilities; Stock gains 2%

The company will continue to benefit from its established market position in southern and western India.

December 28, 2021 1:17 IST | India Infoline News Service
CRISIL Ratings has upgraded its rating on the optionally convertible debentures (OCDs) and non-convertible debentures (NCDs) of Kesoram Industries Ltd (KIL) to 'CRISIL BB+/Stable' from ‘CRISIL B/Stable’.

The upgrade reflects CRISIL Ratings’ expectation of a significant improvement in KIL’s financial risk profile driven by equity raise of Rs400cr through rights issue and sustainable improvement in operating performance over the medium term.

As per rationale, the ratings reflect KIL’s established market position in the cement industry and improved operating performance. These strengths are partially offset by modest yet improving financial risk profile, exposure to refinancing risk and exposure to cyclicality in the cement industry.

CRISIL Ratings has noted KIL’s plan to refinance its high-cost debt with board approving fund raising upto Rs 2,500 crore. KIL’s financial risk profile can further improve if refinancing improves its interest coverage and debt service coverage ratios on a sustainable basis.

The agency said, "The company will continue to benefit from its established market position in southern and western India."

At around 1:17 PM, Kesoram Industries was trading at Rs61 apiece up by Rs1.3 or 2.18% on the BSE.

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