Press Release

VIS Maintains Entity Ratings of Indigo Textile (Private) Limited

Karachi, April 24, 2020: VIS Credit Rating Company Limited (VIS) has maintained entity ratings of Indigo Textile (Private) Limited (ITPL) at ‘A-/A-2’ (Single A Minus/A-Two). The assigned ratings have been placed on ‘Rating Watch-Developing’ status. Long term entity rating of ‘A-’ reflects good credit quality, adequate protection factors. Risk factors may vary with possible changes in the economy. Short Term Rating of A-2 indicates good certainty of timely payment. Risk factors are minor. Previous rating action was announced on November 27, 2019.

ITPL is a Private Limited Company with shareholding vested with Akhtar Group and Haji Khuda Bux Amir Umar. The Company is engaged in manufacturing and sales of denim fabric. Akhtar group specializes in the textile sector particularly denim fabric and garments and has diversified in the dairy and power sectors. Haji Khuda Bux Amir Umar group is engaged in the ginning, export, import, indenting of raw cotton and merchandising of cotton, blended yarns and other textile made ups since 1932.

The revision in rating outlook reflects prevailing uncertainty in textile sector dynamics due to coronavirus outbreak, prolonged lockdown, overall contraction in demand and challenging economic environment. It is expected that the entire value chain of the textile industry will be impacted by these developments. Status of the assigned rating is therefore uncertain as an event of deviation from expected trend has occurred; additional information will be necessary to take any further rating action, warranting a ‘Rating Watch-Developing’ status. Given the moderately leveraged capital structure and sound financial profile, it is expected that ratings will remain stable post recovery of the ongoing situation; nevertheless as scenario is evolving rapidly, VIS will closely monitor and will accordingly take action to resolve the outlook status.

For further information on this rating announcement, please contact Mr. Narendar Shankar Lal (Ext: 203) or the undersigned (Ext. 306) at 021-35311861-70 or email at info@vis.com.pk.




Faryal Ahmad Faheem
Deputy CEO

Applicable Rating Criteria: Industrial Corporates (April 2019)
https://s3-us-west-2.amazonaws.com/backupsqlvis/docs/Corporate-Methodology-201904.pdf

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report. VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright April 24, 2020 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.