Fitch affirms India Glycols

Fitch Ratings said it affirmed India Glycols Ltd.'s national long-term rating at BBB+(ind), Rs. 6.43 billion long-term loans at BBB+(ind), Rs. 4.75 billion non-fund-based limits at F2(ind) and Rs. 3 billion fund-based limits at BBB+(ind)/F2(ind).

The outlook is stable.

The agency said the ratings reflect India Glycols' established position in the Indian market as a mono ethylene glycol and ethylene oxide derivatives producer and management's efforts to reduce its dependence on commodity products and increase sales of mono ethylene glycol under long-term contracts.

While the company's profitability has always been volatile, the sharp commodity price movements in 2009 led to a larger-than-anticipated reduction in profitability, Fitch said. India Glycols is taking steps to reduce its commodity vulnerability, but the agency believes it will remain exposed to different commodity cycles at both the product and raw materials levels.

The company's ratings are also constrained by very high financial leverage, Fitch said. The total adjusted debt net of cash-to-operating EBITDAR ratio is 16.79 times.

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