India Ratings & Research (Ind-Ra) has downgraded Neo Metaliks Limited's (NML) Long-Term Issuer rating to 'IND BB' from 'IND BB+'.
The Outlook is Stable.
NML's bank loan ratings have also been downgraded as follows:
Long-Term Loans INR300.5m (reduced from INR436.6m): Downgraded to ´IND BB´ from ´IND BB+´
Fund-based limits INR412m: Downgraded to ´IND BB´ from ´IND BB+´
Non-fund-based limits INR700.9m: Affirmed at 'IND A4+'
Key Rating Drivers
The downgrade reflects NML's EBITDA losses amounting to INR82m during FY12 (year end March), and around nine months of delay in the commercialisation of its sinter plant.
The ratings continue to factor in the company's low capacity utilisation of its pig iron capacities, as well as its single product profile comprising pig iron only.
Ind-Ra said it expects that NML's sinter project, which started commercial production in FY13, will result in direct cost savings for the company.