Credit raring agency, ICRA has assigned an A- rating to INR 650 million Fund Based bank limits of Ferro Alloys Corporation. The outlook on the long term rating is stable.

ICRA also has A- (stable) rating outstanding for the INR 468.2 million Fund Based Limits and an [ICRA] A2+ rating outstanding for the INR 540 million non fund Based Limits of Facor.

The rating takes into account FACOR`s experienced promoters; its integrated operations with access to captive chrome-ore mines and its healthy revenue growth in FY 2011 driven by optimum utilization of capacity and increase in average realization of its products and comfortable debt protection metrics as reflected in its low gearing and strong coverage indicators.

Further, the rating derives comfort from the expected improvement in FACOR’s cost competiveness and reduced dependence on Orissa State Electricity Board for power with the Phase I of 100 MW thermal power plant planned in FACOR`s subsidiary Facor Power becoming operational.

The rating is however constrained on account of expected increase in gearing levels in the short term with additional debt being employed for investments in FPL, further, the situation is unlikely to reverse with various other planned capital expenditure in the short to medium term.

(Sourced from IRIS.com)