Raymond Ltd
14 Dec 1999
- Non-convertible debentures - Rs. 50 crore Rating : AA-
- Non-convertible debentures - Rs. 90.5 crore Rating : AA- (reaffirmed)
- Fixed deposit programme Rating : FAA (reaffirmed)
The outstanding ratings of Raymond Ltd had been placed on 'rating watch' while Crisil assessed the impact of the sale of Raymonds’ investment in group company Raymond Synthetics Limited to the Reliance group. As on 31 March 1999 Raymond had provided guarantees to Raymond Synthetics' borrowings to the extent of Rs. 93 crore besides loans of Rs. 128 crore.
Crisil is now of the opinion that the proposed sale is in an advanced stage and that the transfer of Raymonds' stake in Raymond Synthetics to the Reliance group would happen once all the legal formalities are completed. Raymond would also have an immediate inflow of Rs. 17.3 crore towards its 36 per cent stake in RSL. The above events, Crisil believes, would have a positive impact on Raymonds' credit quality as the company would now be absolved from all obligations under the guarantees as also the responsibility of supporting its loss making group company.
The reaffirmation in rating also takes into account the cash losses made by the steel division and the increase in market pressures for the textile division. The rating, however, finds support in Raymonds' dominant position in the domestic worsted fabrics market and the improvement in the company’s capital structure.
Raymonds is a multi-divisional company with interests in woollen/worsted textiles, cement, steel and files. For the half year ended 30 Sept 1999, Raymonds posted a profit of Rs. 28.43 crore on sales of Rs. 603.26 crore.
