By Neelam Agrawal

India Ratings and Research (Ind-Ra) has assigned the USD30m fund based working capital facilities guaranteed by Firestar International Private Limited (FIPL) and availed by Firestar Diamond Limited, Hong Kong (FDLHK) ‘IND A-(SO)’/Stable/‘IND A2+(SO)’ ratings. The rating is according to the national credit rating symbols and definitions prescribed by Securities and Exchange Board of India.

KEY RATING DRIVERS

The ratings are based solely on the unconditional and irrevocable guarantee provided by FDLHK’s ultimate parent company FIPL for the former’s working capital facilities. FIPL’s ratings are based on a consolidated view of its businesses and financials. 

For the guarantor’s rating rationale, please click 
here.


RATING SENSITIVITIES

Negative: A rating downgrade of the guarantor could be negative for the bank loan ratings. 

Positive:
A rating upgrade of the guarantor could be positive for the bank loan ratings.

The revocation of the corporate guarantee would warrant a review of the ratings.


COMPANY PROFILE

FDLHK was incorporated as a wholly owned subsidiary of Firestar Holding Limited (Hong Kong, FHL) in 2009, for trading of cut & polished diamonds. FHL is 100% subsidiary of FIPL. In FY15, FDLHK reported revenue of USD238.62m (up 18% yoy) and EBITDA margins were stable at 2%. Its EBITDA/net interest coverage was 2.92x in FY15 (FY14: 2.97x) and net debt/EBITDA was 3.62x (3.31x). For 9MFY16, the company reported revenue of USD197.12m, operating EBITDA interest cover of 3.84x and net debt/EBITDA of 2.44x. Working capital cycle is stable at 73 days and the company’s average maximum fund-based utilisation for the 12 months ended December 2015 was 99%.



SOLICITATION DISCLOSURES

Additional information is available at www.indiaratings.co.in. The ratings above were solicited by, or on behalf of, the issuer, and therefore, India Ratings has been compensated for the provision of the ratings. 

Ratings are not a recommendation or suggestion, directly or indirectly, to you or any other person, to buy, sell, make or hold any investment, loan or security or to undertake any investment strategy with respect to any investment, loan or security or any issuer. 

DISCLAIMER

ALL CREDIT RATINGS ASSIGNED BY INDIA RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTPS://WWW.INDIARATINGS.CO.IN/RATING-DEFINITIONS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE WWW.INDIARATINGS.CO.IN. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. INDIA RATINGS’ CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE.

Applicable Criteria

Analyst Names

  • Primary Analyst

    Neelam Agrawal

    Analyst
    India Ratings and Research Pvt Ltd Wockhardt Towers, 4th Floor, West Wing, Bandra Kurla Complex, Bandra East,Mumbai - 400051
    +91 22 40356115

    Media Relation

    Mihir Mukherjee

    Manager Corporate Communications and Investor Relations
    +91 22 40356121