Mumbai : Konkan Railway Corporation Limited’s (KRCL) proposed Rs 3 billion non-convertible debentures (NCDs) were assigned a ‘Provisional IND AAA (SO)’ rating, by the India Ratings and Research (Ind-Ra). The corporation, which raised Rs 500 million in April 2016, has total outstanding bonds at Rs 14, 517 million as of September 9.
After the closure of the issue and receiving the receipt of final documentation, conforming to the information already received by Ind-Ra, the corporation will be assigned the final rating.
The rating agency stated the outlook of KRCL is stable. However, it might turn negative if there is any change in KRCL’s strategic importance, substantial dilution in the government shareholding, and lack of visible support when required. The agency further stressed that the debt service during FY17-FY21 would constitute mainly interest payments. This will not be applicable for FY17 and FY18 due to the longer maturity period of the outstanding bonds.
In September 2016, the entity has already redeemed Rs 3,100 million, due to steady improvement of the interest coverage ratio. The rating agency believes the KRCL’s cash conversion cycle as favourable. The Rs-14.8billion entity is executing several projects. The corporation is working towards the execution of Udhampur Srinagar Baramulla Rail Link project connecting Jammu and Srinagar; and rail connectivity to Jaigad port near Ratnagiri in Maharashtra.