Fitch rates Sharmanji Yarns loans BB(ind)

Fitch Ratings said it assigned Sharmanji Yarns Pvt Ltd. a national long-term rating of BB(ind), national long-term bank loans of Rs. 525 million at BB(ind), fund-based working capital limits of Rs. 200 million at BB(ind)/F4(ind) and non-fund based working capital limits of Rs. 15 million at BB(ind)/F4(ind).

The outlook is stable.

The ratings are constrained by the company's small scale of operations and commoditized nature of the cotton yarns business, coupled with intense competition in domestic textile sector, Fitch said.

The company has a limited track record in manufacturing yarns, having only commenced commercial operations in April 2008, the agency said.

Favorable rating factors include its location advantage, Fitch said, technologically-advanced machinery and its efficient sourcing of raw material.

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