CRISIL Ratings has assigned its ‘CRISIL AA-/Stable/CRISIL A1+’ ratings on the bank facilities of Rubamin Private Limited (RPL; formerly known as Rubamin Limited; part of Rubamin Group).
CRISIL Ratings has also reaffirmed its ‘CRISIL A1+’ rating on the commercial paper of RPL. The ratings continue to reflect the group’s established market position with large product offerings and multi-locational operations, the extensive experience of the promoters in the commodity sector, the group’s healthy operating margin and comfortable financial risk profile. These strengths are partially offset by susceptibility of profitability to inherent volatility in commodity prices, exchange rates and geo-political risks, working capital-intensive nature of operations, and project risk in on-going debt funded capex.
To arrive at the rating, CRISIL Ratings has carried out full consolidation of the business and financial risk profiles of RPL and its subsidiaries and proportionate consolidation, as per the accounting standards, of its joint ventures.
Healthy operating margin has resulted in robust net cash accruals. Furthermore, group has sound risk management practices in place, for hedging foreign exchange exposure as well as commodity price volatility, and the same is expected to keep the operating margin stable going ahead.
CRISIL noted that the sensitivity factors have some upsides which include:
CRISIL Ratings' complexity levels are assigned to various types of financial instruments.