VIP Industries rating reaffirmed

The `A' (single A) rating assigned to the Rs. 25 crore non- convertible debenture issue of VIP Industries (VIP) has been reaffirmed. The `P1' (P one) rating assigned to the company's Rs. 25 crore commercial paper programme has also been reaffirmed.

The ratings continue to reflect the company's established position in the domestic luggage market on account of its diversified market presence, wide product range and strong brand name; and VIP's comfortable operating efficiencies due to its multiple manufacturing facilities & strong in-house R&D facilitating rapid introduction of new products.

The rating is, however, constrained by the company's moderate financial risk profile as reflected by moderate margins, gearing and coverage ratios and its continued high degree of exposure to group companies. The company's ability to sustain its market position in the domestic luggage industry through continued product innovations and improvement in its financial position through cost rationalisation, debt reduction and reduced exposure to group companies would critically determine its future credit risk profile.

VIP Industries (VIP), part of the Dilip Piramal Group of companies, is mainly engaged in the manufacture of hard and soft luggage. In addition, the company also manufactures and markets the 'Moderna' range of moulded furniture.

Corporate Bureau

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Section  : Business
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