The commercial paper programme is part of GIL's fund-based working capital banking lines. At present, the commercial paper programme for Rs 15 crore.
The rating also takes into account well-established relationship the GIL has with original equipment manufacturers (OEMs) across diverse segments of the automobile industry and reducing the concentration on any single OEM, Fitch said in a statement.
Furthermore, the large amount of debt to undertake capital expenditure, as well as limited internal accruals in 2007-08 (FY08) have put pressure on net margins and debt protection measures. Although the company has added significant capacity in the last few years, capacity utilisation remains low.
GIL suffered reduction in revenue and profitability in FY08 due to a slowdown in the automobile sector, particularly in the two-wheeler segment where volumes declined by about 8% during the year.
GIL's revenues declined by 9.4 per cent from 516.2 crore in 2006-07 to Rs 467.5 crore in 2006-07.
