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Ind Ra upgrades Capacite Infraprojects rating to 'BBB/Stable'; Stock plunges 3%

The ratings also reflect CIL’s pick-up in order execution, ability to maintain comfortable margins and improved liquidity profile.

November 29, 2021 11:11 IST | India Infoline News Service
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India Ratings and Research (Ind-Ra) has upgraded Capacite Infraprojects Limited’s (CIL) Long-Term Issuer Rating to ‘IND BBB’ from ‘IND D’. The Outlook is Stable.

Ind-Ra has taken a consolidated view of CIL and its 100% subsidiary CIPL-PPSL-Yongnam Joint Venture Constructions Private Limited, along with its joint ventures and associates including MHADA project (together referred to as CIL), owing to the strong operational and strategic ties among them. The joint ventures and associates have been included in financials using the equity method of accounting.

The upgrade reflects CIL’s timely debt servicing on the term loans since 23 August 2021, as per the information shared by the company along with the confirmation from the lenders in their respective communication with the agency.

The rating upgrade also factors in the improvements in the internal controls and governance measures established by CIL by way of configuring the auto-debit facility for the term loans to a single cash credit account.

CIL has also given an undertaking to the agency to maintain sufficient balance in the respective cash credit account to honour the next scheduled repayment all the time. Also, there is a second layer of protection in the form of a INR73.5 million debt service reserve (DSR). The ratings also reflect CIL’s pick-up in order execution, ability to maintain comfortable margins and improved liquidity profile.

At around 11:12 AM, Capacite Infraprojects was trading at Rs166.55 apiece down by Rs5.75 or 3.34% on the BSE.

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