CARE revises credit ratings on AGC Networks’ bank facilities

CARE Ratings revised the credit ratings assigned to bank facilities of AGC Networks Limited on both long-term and short-term basis.

AGC Networks long-term bank facilities has been revised to CARE BBB with Stable Outlook from CARE BB+ / Stable. The rating on Short Term Bank Facilities worth has been revised to CARE A3 from CARE A4+.

In its rationale, CARE said that the revision in the ratings assigned to the bank facilities of AGC Networks Limited (AGC) takes into account progress in terms of equity infusion by promoter entity, with Rs.73 crore out of the total Rs.225 crore already received by AGC on January 08, 2021 in the form of allotment of warrants and improved performance during 9MFY21 resulting in positive net-worth as on December 31, 2020.The rating continues to derive strength from experienced promoters (viz. Essar group) and management, the company’s sound technical knowhow and domain expertise translating in to significant improvement in performance of AGC’s subsidiary viz. Black Box Corporation Limited during FY20 and 9MFY21.

Also, CARE adds that the rating continues to factor in strong and diversified client base, diversified capabilities in Information and Communication Technology solutions, improved collection period in FY20 marked by securitisation of receivables, and significant decrease in corporate guarantee extended to subsidiary. The ratings are however tempered by competitive nature of the IT/ITeS industry and foreign exchange risk faced by the company.