Ind-Ra upgrades Chemplast Sanmar's long-term issuer rating to ‘IND A+' with Positive outlook; Stock shoots up 7%

2 Mar 2022 , 01:03 PM

India Ratings and Research (Ind-Ra) has upgraded Chemplast Sanmar Limited’s Long-Term Issuer Rating to ‘IND A+’ with a Positive outlook. The long-term – issuer rating has been upgraded to ‘IND A+ /Positive’. For short-term non-fund-based working capital facilities, the rating has been upgraded to IND A1+.

The company stock was bullish on Wednesday despite weak markets. At around 1.06 pm, Chemplast Sanmar Ltd was trading at Rs507.40 per share up by Rs33.9 or 7.16% from its previous closing of Rs473.50 per share on the BSE.

The scrip opened at Rs472 and has touched a high and low of Rs522.60 and Rs472 respectively.

“Ind-Ra continues to take a consolidated view of CSL and its wholly-owned subsidiary, Chemplast Cuddalore Vinyls Limited (CCVL). CSL has provided a corporate guarantee towards loans of Rs1,076.63 million availed by CCVL as of FY21. Moreover, CCVL has a significant scale and profitability, making the business strategically important to CSL’s consolidated profile,” company shared Ind-Ra’s rating rationale in a filing on Tuesday.

It added, the upgrade and the Positive Outlook reflect a substantial improvement in CSL’s consolidated credit profile after the completion of the initial public offering (IPO) in August 2021, healthy profitability over FY21-9MFY22, backed by strong polyvinyl chloride (PVC) prices, and Ind-Ra’s expectation of an improvement in CSL’s business profile over the medium term. This will be on the back of a consolidation of its market leading position in the paste PVC business, where the company plans to enhance the capacity, and a strong performance in other business segments.