Fitch rates Indian Seamless loan A(ind)

Fitch Rating said it assigned a long-term issuer rating of A(ind) to Indian Seamless Metal Tubes Ltd. The agency also assigned a rating of A(ind) on its secured long-term bank loan of Rs.6000 million loan, A(ind) and F1(ind) ratings on its interchangeable cash credit limits of Rs.3050 million and working capital demand loan of Rs.3050 million; and F1(ind) on its Rs.4100 million non-fund based limits.

The outlook is stable.

Fitch said the ratings reflects the company's positioning in the seamless tube industry, which has high entry barriers and provided the company with healthy margins during the last two years, the benefits of backward integration and a favorable demand outlook for its products.

The ratings are tempered by its improving, but moderate leverage and a cost structure that still is higher than its peers primarily in respect to its cost of power and other overheads, the agency said.

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