Infomerics has reaffirmed Baroda Rayon's credit rating at IVR BB- Stable, increasing the bank facility to ₹189.10 crore. The company is focused on its Surat Textile Bourse project.
Infomerics Valuation and Rating Ltd has reaffirmed The Baroda Rayon Corporation Ltd's long-term bank facilities credit rating at "IVR BB- / Stable." The total rated facility has been increased to ₹189.10 crore from ₹175 crore. ## What just happened The credit rating agency, Infomerics, has maintained its assessment of Baroda Rayon's creditworthiness for its long-term borrowings, indicating no change in the perceived risk. Simultaneously, the total amount the company can borrow under these facilities has been raised. ## Why this matters This reaffirmation suggests stability in the company's financial health from a credit perspective. An increase in the rated facility can provide greater financial flexibility, but it also means higher potential debt levels. Investors should note the 'Stable' outlook, implying no immediate expected downgrades. ## The backstory Baroda Rayon Corporation is primarily engaged in real estate activities, with its key project being the Surat Textile Bourse. Recent financial reports for FY2025 show total operating income at ₹99.60 crore, EBITDA at ₹27.35 crore, and PAT at ₹40.35 crore, against total debt of ₹174.78 crore and a tangible net worth of ₹372.31 crore. ## What changes now While the rating remains the same, the expanded credit line offers Baroda Rayon more capacity for its ongoing real estate ventures. The promoters have also settled unsecured loans using personal funds, which could ease some financial pressure. ## Risks to watch Key concerns highlighted by the rating agency include 'stretched' liquidity, a proposed new term loan of ₹50 crore expected to increase leverage, geographical concentration of projects in Surat, and susceptibility to real estate market cycles. ## Peer comparison While specific peer credit ratings are not provided in the filing, companies in the real estate and textile sectors often face similar cyclical risks and liquidity challenges. Baroda Rayon's focus shift to real estate distinguishes it from traditional textile manufacturers. ## Context metrics (time-bound) For the year ended March 31, 2025, Baroda Rayon reported Total Operating Income of ₹99.60 crore, EBITDA of ₹27.35 crore, and PAT of ₹40.35 crore. Total Debt stood at ₹174.78 crore, with a Tangible Net Worth of ₹372.31 crore. ## What to track next Investors should monitor the progress of the Surat Textile Bourse project and how the company manages its liquidity. The impact of the proposed ₹50 crore term loan on the company's leverage ratio will also be a crucial factor.
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