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-CRISIL rates Swarna Projects' bank facilities at B.

BANKING AND CREDIT NEWS-January 11, 2011--CRISIL rates Swarna Projects' bank facilities at B(C)2011 M2 COMMUNICATIONS

11 January 2011 - Indian rating agency CRISIL yesterday assigned a B/"stable" rating to the bank facilities of Swarna Projects.

The agency issued the following press release:

Rs.200 Million Cash Credit B/Stable (Assigned)

Rs.100 Million Letter of Credit* P4 (Assigned)

Rs.100 Million Bank Guarantee* P4 (Assigned)

*Full interchangeable between the facilities

CRISIL has assigned its 'B/Stable/P4' ratings to the bank facilities of Swarna Projects Pvt. Ltd (SPPL).

The ratings reflect SPPL's below-average financial risk profile, marked by a small net worth and high gearing, and exposure to risks related to high customer concentration in revenue profile, and a limited track record. These rating weaknesses are partially offset by the diversified business presence of SPPL's promoters.

Outlook: Stable

CRISIL believes that SPPL will continue to benefit over the medium term from its promoters' experience of executing turnkey projects. The outlook may be revised to 'Positive' if the company improves its operating margin substantially, or significantly scales up its operations. Conversely, the outlook may be revised to 'Negative' if SPPL's debt protection metrics deteriorate, most likely because of a decline in margins, or in case of large, debt-funded capital expenditure.

About the Company

Incorporated on January 1, 2009, SPPL has been executing its first project (part of the Maharastra Infrastructure Phase II of Rural Electrification) since November 2009. The contract for the project, which is worth around Rs.1.7 billion in Maharashtra, was obtained from Ramky Infrastructure Ltd (rated 'A-/Stable/P2+' by CRISIL), which in turn obtained it from the Maharashtra State Electricity Board. The promoters of SPPL have been undertaking various infrastructure and real estate projects since 1999 through the various group companies.

SPPL reported a profit after tax (PAT) of Rs.1 million on net sales of Rs.40 million for 2009-10 (refers to financial year, April 1 to March 31).

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Publication:M2 Banking & Credit News (BCN)
Date:Jan 11, 2011
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