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-Maa Usha Urja's BBB rating affirmed by CARE.

M2 EQUITYBITES-December 21, 2010--Maa Usha Urja's BBB rating affirmed by CARE(C)2010 M2 COMMUNICATIONS http://www.m2.com

21 December 2010 - CARE on Monday maintained its BBB rating assigned to the long-term bank facilities of Maa Usha Urja Ltd aggregating INR80.6m.

The agency issued the following press release:

Facility Amount (Rs. cr.) Rating1 Remarks

Long-term Bank Facility 8.06 'CARE BBB' Reaffirmed

Total 8.06

Rationale

The ratings continue to draw strength from experienced promoters, stable operation of the plant since inception with high Plant Load Factor (PLF), provision of power tariff revision every three years in line with raw material prices and comfortable financial position. The ratings are however constrained by the relatively small size of MUUL, short track record of operations and dependence on Jayswals Neco Industries Ltd (JNIL) for sale of power. Steady power demand from JNIL and regular availability of fuel (rice husk) remain the key rating sensitivities.

Company Profile

MUUL, promoted by Shri Basant Lall Shaw, belongs to the Neco group of companies. Jayaswal Neco Industries Ltd (JNIL) is the flagship company of the group engaged in the business of manufacturing of iron & steel related products. MUUL incorporated in 1995, is engaged in generation of power since March, 2007 through a 7.5 MW biomass-based power plant (by using rice husk and coal) at Siltara, Raipur. The company supplies its entire generation to JNIL as per the power purchase agreement. MUUL earned a PBILDT and PAT (after deferred tax) of Rs.8.3 crore and Rs.4.4 crore respectively on net sales of Rs.18.3 crore in FY10.

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Publication:M2 EquityBites (EQB)
Date:Dec 21, 2010
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