Fitch rates Amaravathi Sri Venkatesa loans B+(ind)

Fitch Ratings said it assigned Amaravathi Sri Venkatesa Paper Mills Ltd. a national long-term rating of B+(ind), along with a B+(ind) rating on its Rs. 143.6 million term loans, B+(ind)/F4(ind) rating on its Rs. 57.5 million fund-based working capital limits and F4(ind) on its Rs. 102.5 million non-fund-based working capital limits.

The outlook is stable.

The ratings reflect the inherent risk of being in a commodity market business and the cyclical nature of the industry, especially considering the company's presence in the recycled paper or B-grade paper segment, Fitch said.

The company's debt-to-EBITDA ratio was a moderate 3.7x at the end of 2009, the agency said. This is likely to be stretched by the company's proposed capital expenditure plans going forward, Fitch noted.

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