Bangalore-based Brickwork Ratings, on Monday, has assigned BWR BBB+ with a stable outlook to long term facilities of R830 crore of term loans and R360 crore of cash credit, which includes export credit as sub limits amounting to R244 crore. The rating firm has also assigned BWR A3+ to short term facilities of R660 crore in the form of letter of credit and bank gurantee.
According to Brickwork, these are bank loan facilities sanctioned by banks to Bombay Dyeing which they can use as and when they need it. These are for the purpose of both working capital and term loan facilities, it said.
Bombay Dyeing has a credit line from a consortium of 12 banks, with State Bank of India being the lead banker, Brickwork told FE. Kotak Mahindra Bank is the most recent to have joined the list and has sanctioned R150 crore to the company. Last year, the company had a credit facility of R1,510 crore.
Bombay Dyeing did not comment for the story till the time of going to the press.
Brickwork said that the ratings factor Bombay Dyeing's strong brand equity and well established business operations for over a century, broad based board with persons of rich experience and repute, strong distribution network with over 300 exclusive and more than 2000 multi brand stores. Its huge land bank at Mumbai and the real estate division of the company are also acknowledged in the ratings rationale.
However, ratings are constrained by continuing poor performance of the textile and polyester division, high gearing level, volatility in raw material prices of polyester staple fibers, and strong competition in home textile segments.