Fitch rates Varun Beverages loans A-(ind)

Fitch Ratings said it assigned Varun Beverages Ltd. a national long-term issuer rating of A-(ind), along with an A-(ind) on its fund-based long-term bank loans aggregating Rs.682.8 million, A-(ind) and F2+ on its fund-based working capital banking lines aggregating Rs.350 million and F2+(ind) on its non-fund based working capital banking lines of Rs.245 million..

The outlook is stable.

The ratings reflect its established market position as PepsiCo's (rated AA- with stable view) largest bottler in India and its proven track record of working with PepsiCo, Fitch said.

A key concern is Varun's entire dependence on PepsiCo and its inability to pass on any increase in input costs to customers as the price of the product is decided by the latter, the agency said.

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