BWI: Brickwork Ratings Assigns “BWR AA” for PTC India Financial Services Ltd.’s Proposed Non-Convertible Bonds Issue of INR 100 Crore or INR 1 Billion

Press release from Business Wire India
Source: Brickwork Ratings
Wednesday, February 03, 2010 03:03 PM IST (09:33 AM GMT)
Editors: General: Consumer interest, Economy; Business: Accounting & management consultancy services, Banking & financial services, Business services, Financial Analyst, Stock exchanges
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Brickwork Ratings Assigns "BWR AA" for PTC India Financial Services Ltd.'s Proposed Non-Convertible Bonds Issue of INR 100 Crore or INR 1 Billion
Issue Rating: BWR AA: Outlook: Stable

Bangalore, Karnataka, India, Wednesday, February 03, 2010 -- (Business Wire India) -- Brickwork Ratings has assigned BWR AA (Pronounced BWR Double A) with 'stable' outlook to PTC India Financial Services Limited (PFS) for proposed non-convertible bonds issue of Rs 100 crore (Existing issue Rs. 100 crore - aggregate amount of Rs. 200 crore). Brickwork Ratings BWR AA signifies 'High Credit Quality' and the Rating Outlook further signifies the direction of the rating being stable in the near term. Brickwork has relied upon the audited financial statements, information and clarifications provided by the issuer in for assigning the Rating.

The rating factored positive factors including significant ownership of the promoter (PTC), comfortable capital adequacy and leverage, international perspective in infrastructure funding projects (Involvement of Goldman Sachs and Macquarie), healthy earning assets and lean operating structure. The rating was partially influenced by exposure to a single sector, the tendency of energy projects to have time and cost overrun, competition from well established and stronger players, difficulty in continuous availability of raw materials for biomass power projects, coal price fluctuation and limited standalone track record of the company. However, the company is a subsidiary of the PTC India Ltd and leverages its parent's network and strong power trading capabilities for it power finance business. The company has access to financial support from the PTC.

The company has appropriate policy in place to manage its asset-liability position. As a matter of prudence, the company has a policy to keep enough liquid investments in order to manage the fixed obligations. The proposed NCD issue of Rs 100 crore, would not only help the company augment its fund resource but also help sustain its growth momentum achieved in FY 09.

The company has performed well during the financial year 2009 in spite of many challenges witnessed in the macro environment front in the country. During the year, the Company has used mix of debt and equity to sanction financial assistance of Rs 722 crore to 15 projects. As on 31st March 2009, the company provided incremental financial assistance of Rs 886 crore to 19 projects. The company's limited ability to finance relatively smaller amount in the power projects is a constraint for its operations and growth and the company faces tough competition from well established players in the power finance market. Hence riskier projects are likely to come to it.

The company's revenue has improved to Rs 33.38 crore in Q3 FY 10 as against Rs 11.6 crore and Rs 3.16 crore in FY 09 and FY 08 respectively. The Company's PBT and PAT have increased to Rs. 8.68 crore and Rs. 8.53 crore respectively in FY09, which has further improved in FY 10. The company has reported net profit of Rs 20.19 crore in Q3 FY 10. It is observed that major part of the revenue had come from income from treasury investments. Going forward, the PFS is expected generate more revenue from core operations.

Copyright ©, 2009, Brickwork Ratings.

Brickwork Ratings has assigned the rating based on the information obtained from the issuer and other reliable sources, which are deemed to be accurate. Brickwork has taken considerable steps to avoid any data distortion; however, it does not examine the precision or completeness of the information obtained. And hence, the information in this report is presented "as is" without any express or implied warranty of any kind. Brickwork does not make any representation in respect to the truth or accuracy of any such information. The rating assigned by Brickwork should be treated as an opinion rather than a recommendation to buy, sell or hold the rated instrument and BWR shall not be liable for any losses incurred by users from any use of this report or its contents. Brickwork has the right to change, suspend or withdraw the ratings at any time for any reasons.


CONTACT DETAILS
Dr. A. Suresh Kumar, Lead Analyst, Brickwork Ratings, 1-860-425-2742, suresh.kumar@brickworkratings.com
Narahari Prashanthi, Co-Analyst, Brickwork Ratings, 1-860-425-2742, prashanthi.n@brickworkratings.com
Anitha G, Media, Brickwork Ratings, 1-860-425-2742, media@brickworkratings.com
Ramaswamy Annam, Director - Business Development, Relationship, Brickwork Ratings, 1-860-425-2742, ramaswamy@brickworkratings.com

KEYWORDS
CONSUMER, ECONOMY, CONSULTANCY SERVICES, BANKING, BUSINESS SERVICES, Financial Analyst, STOCK EXCHANGES

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