• Non-convertible debenture - Rs. 1.5 crore Rating : BBB+
• Non-convertible debenture - Rs. 33.45 crore Rating : A to BBB+ (Downgraded)
• Non-convertible debenture - Rs. 8 crore Rating :A to BBB+ (Downgraded)

A ‘BBB+’ (pronounced triple B plus) rating has been assigned to the proposed Rs. 150 million Non Convertible debenture issue of Gabriel India Ltd. (GIL). The outstanding rating on the Non Convertible debenture issues of GIL has been downgraded from ‘A’ (pronounced single A) to ‘BBB+’ (pronounced triple B plus).

The revision in rating is on account of the deterioration in the company’s financial risk profile as indicated by high gearing (as measured by total debt/tangible networth) levels and low interest cover (as measured by PBDIT/Interest Expenses), the continued absence of returns from its Rs. 324.0 million investment in its subsidiary, Stallion Shox Ltd., and the continuing pressure on profitability arising out of continuing capacity surpluses. The rating also takes into account GIL’s market leadership in the shock absorber business, its manufacturing presence close to its major customers and its status as the flagship of the Anand group of companies – a group that has a long standing and diverse presence in the Indian auto ancillary industry.

GIL is the oldest company in the Delhi based Anand group, and is engaged in the manufacture and sale of shock absorbers, struts, front forks and engine bearings. In the year 1998-99, GIL reported a loss of Rs.20.6 Million on net sales of Rs. 1819.4 Million.