ICRA upgrades long-term ratings of Escort's bank facilities worth Rs950 crore; stock gains ~1%

21 Apr 2022 , 11:37 AM

Escorts Limited informed that ICRA Limited has upgraded its long-term rating by one notch from “AA” to “AA+” accompanied by a revision in outlook from “watch with developing implications” to “Stable”.

ICRA has also reaffirmed the company’s short-term rating to “A1+”.

Total bank facilities reviewed by the rating agency were worth Rs950 crore.

Total facilities include fund-based working capital facilities worth Rs646 crore (Long-term), Non fund Based Working capital facilities worth Rs281 crore, and Unallocated facilities worth Rs23 crore.

ICRA had placed the long term rating of Escorts Limited (Escorts) on rating watch with developing implications in November 2021 after the in-principle approval by the company’s board to issue further equity stake on a preferential basis to Kubota Corporation (Kubota), worth Rs1,872.74 crore.

In February 2022, the company notified the completion of the preferential issue to Kubota; the open offer made by Kubota to acquire up to 26% of the share capital was oversubscribed and concluded on April 11, 2022. Following this update, ICRA has removed the long-term ratings from watch with developing implications and upgraded the rating, while also assigning a Stable outlook to the same.

Escorts Ltd is currently trading at Rs1,548.95 up by Rs24.3 or 1.59% from its previous closing of Rs1,524.65 on the BSE. It hit intraday high and low of Rs1,553.60 and Rs1,529.95 respectively.