Crisil upgrades Instrumentation NCB

Credit rating agency Crisil has upgraded the rating of non-convertible bonds (NCBs) of Instrumentation Ltd after the public sector company paid up the interest due to investors.

Crisil had downgraded the rating on Instrumentation's Rs 35 crore Series B NCBs to D(so) from AAA(so) for defaulting on payment of interest on the due date on December 31, 2004.

The government also failed to pay up as the guarantor of Instrumentation's debt obligations. Subsequently, the company not only cleared the interest due, but also had to bear penal interest.

The reinstatement of the AAA(so) rating on Instrumentation's Series B NCBs is also based on the strength of a provision of a credit enhancement mechanism.

The company has deposited the principal and interest due on the bond issue in a trust and retention account as a credit enhancement structure to ensure timely payment to investors.

Crisil said the rating reflects the credit quality of the government of India, the guarantor of Instrumentation's debt obligations. It has also reaffirmed AAA(so) rating assigned to the company's Rs 28 crore Series A NCBs.

Instrumentation caters to the control and instrumentation needs of companies in the power, steel, oil and gas, chemicals and other sectors.

For the financial year 2003-04, the company reported a net loss of Rs 29.02 crore on net sales of Rs 139.96 crore.