Its a 2- step downgrade from BBB+ to BB+ . Its skipped BBB and BBB- in between. If you consider the outlook then it adds more steps to the downgrade as it has moved from BBB+ Negative to BB+ Stable (skipping Positive , Stable and Negative outlooks at each of the ratings).
Same goes for short term ratings – from A2 to A4+. Here the skipped steps are – A2-, A3+, A3 and A3-.
The link is attached:
http://www.crisil.com/Ratings/RatingList/RatingDocs/Omkar_Speciality_Chemicals_Limited_December_04_2015_RR.html
http://www.crisil.com/ratings/company_fact_sheet.jsp?ID=OSCPL#
The rating report has no new information that was not already known. While the multi step downgrade is meaningful and worrying, it looks like they are behind the curve.
One item I am not clear on, is that if you look at the “View” in Instrument Details for Long Term (in the 2nd link), it says “Proposed Long Term bank facility of Rs 863 million”. This is at variance to what the management has been maintaining – that only 25-30 crores (dont remember the exact figure) of additional debt will be taken which is only of routine capex maintenance nature. All other debt for expansion has already been availed and that debt levels would see a gradual reduction from Sep’15 levels (I particularly remember Pravin Herlekar stating this).
Discl – hold Omkar as a small portion of the PF from 170 levels bought in the last 1 year.
| Subscribe To Our Free Newsletter |
