ICRA assigns A1 rating to FFL's Rs 250 cr debenture prog

New Delhi, Apr 26 (UNI) Credit rating agency ICRA has assigned A1 rating to an enhanced Rs 250 crore short term non convertible debenture programme of Fortis Finvest Limited.

Earlier, FFL had an outstanding rating of A1 for Rs 150 crore short term debt programme. The A1 rating for the enhanced amount takes into account FFL's rapidly growing financing business volumes, its adequate risk management systems and its profitable operations.

The rating also draws support from the parentage of the promoters of Ranbaxy Laboratories Ltd and the continuous managerial and financial support demonstrated by them, including the letter of comfort provided by Ranbaxy Holding Company Limited (RHCL) whereby RHCL has committed to subordinate the unsecured loans amounting to Rs 100 crore given to FFL till the rated debt is outstanding in FFL's books.

FFL has also received a fresh equity infusion of Rs 20 crore and preference share capital of Rs 25 crore (redeemable in 5 years) from its holding company Religare Enterprises Limited in March 2006.

The rating also factors in the close synergies between FFL and Religare Securities Limited (formerly Fortis Securities Limited) which is the stock broking arm of Religare group. The rating is however constrained by FFL's vulnerability to stock market performance, its relatively short track record and the small scale of its operations.

UNI SS MP VC1842