ICRA reaffirms rating on long-term fund based limits of National Fertilizers; Stock slumps 9%

The outlook is Stable. The credit rating agency also reaffirmed ICRA A 1+. Rating on short-term and non-fund based facilities of the company.

Apr 12, 2021 11:04 IST India Infoline News Service

ICRA Limited has reaffirmed AA- rating with a Stable outlook to Rs4000cr long-term fund based limits of National Fertilizers Limited and Rs1,044cr term loans.

The credit rating agency also reaffirmed a short-term rating of Rs3,000cr non-fund based facilities at ICRA A 1+. On the Commercial Paper program Rs4000cr, the rating was reaffirmed at ICRA A1+.

“The assigned ratings for the credit lines of National Fertilizers Limited (NFL) factor in the leadership position in the fertiliser industry, expected improvement in the credit profile of the company with the likely hood of significant decline in working capital debt post the receipt of additional subsidy from GoI under Atma Nirbhar 3.0 package,” company shared ICRA’s rating rationale.

It further said, the ratings also factor in the low demand risk for urea, healthy contribution from the sale of traded and industrial products, exceptional financial flexibility arising out of strategic importance to Government of India (GoI) and the large sovereign ownership. The credit profile of the company is expected improve from end of FY2021 as GoI has released the additional subsidy allocation in FY2021 leading to the removal of the subsidy backlog.

At around 11.47 am, National Fertilizer Ltd was trading at Rs53.25  per piece down Rs5.40 or 9.21% from its previous closing of Rs58.65 per piece on the BSE.

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