ICRA reaffirms A1+ rating to Exide's Rs 125 cr CP prog

New Delhi, Oct 5 (UNI) ICRA has reaffirmed A1+ rating indicating the highest credit quality in the short term, to Rs 125 crore Commercial Paper (CP) Programme of Exide Industries Limited (EIL).

The rating took into account EIL's dominant market position and leading market share in the Indian storage battery industry, its diversified and established original equipment manufacturers (OEM) customer base and product profile.

ICRA also considered EIL's strong presence in the after market which helps mitigate cyclical risks and margin pressures in the OEM business and multiple brands positioned across the entire price spectrum with established brand equity and strong after sales services.

EIL's large investments in its life insurance joint venture, which would require substantial capital over the next three years, was also considered.

The rating is constrained by the industry's vulnerability to lead commodity cycles, the continued margin pressures in the OEM business, the industry-wide concerns regarding lead recycling and intensifying competitive pressures from the unorganised sector/cheaper imports.

EIL has a technology tie-up with Shin-Kobe, Japan the makers of world class Hitachi VRLA batteries for maintenance free batteries and with Furukawa, Japan and Oldham, UK for automotive batteries.

It has the largest storage battery manufacturing capacity in India with geographically well diversified manufacturing facilities and has eight manufacturing plants. The ninth manufacturing facility an EOU facility for traction batteries is currently under construction in Haldia.

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