Fitch ups Aravali Infrapower

Fitch Ratings said it upgraded Aravali Infrapower Ltd.'s national long-term rating to BBB(ind) from BBB-(ind) and affirmed its short-term facilities at F3(ind).

The agency also said it upgraded its Rs. 2.57 billion fund-based working capital limits, enhanced from Rs. 1.87 billion, to BBB(ind) from BBB-(ind) and affirmed it at F3(ind).

The agency also affirmed its Rs. 2.7 billion non-fund-based working capital limits, enhanced from Rs. 1.53 billion, at F3(ind) and upgraded its outstanding Rs. 320.2 million long-term bank loan, including foreign-currency loan, reduced from Rs. 478.9 million, to BBB(ind) from BBB-(ind).

The outlook is stable.

The upgrade reflects the improvement in the company's profitability and credit metrics in 2010, Fitch said.

The ratings continue to be underpinned by the company's diversified project portfolio across various infrastructure sectors and geographic locations, experience and track record for construction of transmission lines and favorable demand outlook for infrastructure sector, the agency said.

The ratings are constrained by the highly working-capital-intensive nature of the company's business, the highly competitive industry it operates in and the tender-based nature of the business, Fitch said.

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