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CRISIL ‘A+’ and ‘P1’ for GVK BIOSCIENCES’ bank facilities

July 07, 2008, Mumbai

 

Rs.200 Million Cash Credit/ Working Capital Demand Loan

A+/Stable(Assigned)

Rs.519.8 Million Long Term Loan

A+/Stable(Assigned)

Rs.220 Million Packing Credit

P1(Assigned)

Rs.150 Million Letter of Credit

P1(Assigned)

Rs.75 Million Short Term Loan

P1(Assigned

CRISIL has assigned its bank loan ratings of ‘A+/Stable/P1’ to the various bank facilities of GVK Biosciences Pvt Ltd (GVK BIO). The ratings reflect GVK BIO’s strong market position and favorable growth prospects, its low-risk business model, based predominantly on full-time equivalent (FTE) and fee-based contracts, and itshealthy operating margins. These strengths are, however, partially offset by increasing competition in the contract research industry and large and aggressive growth plans of the company which could impact the financial profile in the short to medium term future.

CRISIL has combined the financial profiles of GVK BIO and Inogent Labs, an affiliate company of the GVK Group; this is because both companies are controlled by the same management and are in similar line of business. While GVK BIO provides services in drug discovery and development, Inogent Labs provides custom synthesis, process development and contract manufacturing services of intermediates, NCEs and APIs for small molecules.

Outlook: Stable

CRISIL expects GVK BIO to maintain its trajectory of profitable growth, through organic and inorganic expansions. The financial risk profile is expected to weaken from current levels due to debt raised to fund capital expenditure plans and acquisitions, and yet remain on par for the rating category. The outlook may be revised to ‘Positive’ if the company achieves robust growth while maintaining a comfortable financial risk profile. Conversely, the outlook may be revised to ‘Negative’ if GVK BIO incurs more debt than expected to fund its growth plans, thereby straining its capital structure, or increases its exposure to risks inherent to Collaborative Research deals.

About GVK BIO

GVK BIO is one of India’s leading Contract Research Organizations engaged in providing integrated research services to big Pharma and Biotech companies globally. The company accelerates the Drug Discovery and Development process of its customers through science and innovation. Currently the company has more than 1,500 (GVK BIO and Inogent) employees spread across facilities in Hyderabad, Gurgaon.

 

Media Contact

Analytical Contacts

CRISIL Rating Desk

Ramya Krishnan Anil
Head, Market Development & Communications
CRISIL
Tel: +91-22-6758-8051
Mobile: +91 98203 42671
Facsimile: +91-22-6758-8088
Email: RamyaKA@crisil.com

Pawan Agrawal
Director, Corporate and Government Ratings – CRISIL Ratings
Tel: +91-22-6691 3301
Email: pagrawal@crisil.com

Revathy Sreedharan
Head, Corporate and Government Ratings – CRISIL Ratings
Tel: +91-22-6691 3096
Email: revathy@crisil.com

Tel: +91-22-6691 3047 / 6691 3064
Email: CRISILratingdesk@crisil.com

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Disclaimer: A CRISIL rating reflects CRISIL’s current opinion on the likelihood of timely payment of the obligations under the rated instrument and does not constitute an audit of the rated entity by CRISIL. CRISIL ratings are based on information provided by the issuer or obtained by CRISIL from sources it considers reliable. CRISIL does not guarantee the completeness or accuracy of the information on which the rating is based. A CRISIL rating is not a recommendation to buy, sell or hold the rated instrument; it does not comment on the market price or suitability for a particular investor. All CRISIL ratings are under surveillance. Ratings are revised as and when circumstances so warrant. CRISIL is not responsible for any errors and especially states that it has no financial liability whatsoever to the subscribers / users / transmitters / distributors of this product. For the latest rating information on any instrument of any company rated by CRISIL, please contact CRISIL RATING DESK at CRISILratingdesk@crisil.com, or at (+91 22) 6691 3001 – 09.

CRISIL is India’s leading Ratings, Research, Risk and Policy Advisory company. CRISIL leverages its core strengths of credibility and analytical rigour to deliver opinions and solutions, that help clients mitigate and manage their business and financial risks, make markets function better, and help shape public policy. For more information, visit www.crisil.com.

Disclaimer: A CRISIL rating reflects CRISIL’s current opinion on the likelihood of timely payment of the obligations under the rated instrument and does not constitute an audit of the rated entity by CRISIL. CRISIL ratings are based on information provided by the issuer or obtained by CRISIL from sources it considers reliable. CRISIL does not guarantee the completeness or accuracy of the information on which the rating is based. A CRISIL rating is not a recommendation to buy, sell or hold the rated instrument; it does not comment on the market price or suitability for a particular investor. All CRISIL ratings are under surveillance. Ratings are revised as and when circumstances so warrant. CRISIL is not responsible for any errors and especially states that it has no financial liability whatsoever to the subscribers / users / transmitters / distributors of this product. For the latest rating information on any instrument of any company rated by CRISIL, please contact CRISIL RATING DESK at CRISILratingdesk@crisil.com, or at (+91 22) 6691 3001 – 09.