Minda Corporation’s Credit Rating Upgraded by Fitch

The long-term bank facilities have been rated ‘IND A+’ 

New Delhi, India, November 23, 2016 – Minda Corporation (referred to as “Minda Corp”) is a leading automotive component manufacturer and flagship company of Spark Minda, Ashok Minda Group. The Company is pleased to announce that India Ratings and Research (Ind-Ra), a Fitch Group Company, has assigned a Long-Term Issuer Default Rating (IDR) of 'IND A+' to Minda Corporation.   

Rating Rationale by Ind-Ra: 

“The improvement in the credit profile of MCL has been substantial though gradual over the period FY13-FY16, with the company registering better capital structure (D/E) (FY16: 0.86x; FY13:1.51x) and improved EBITDA margins (9.1%; 5%) leading to comfortable net financial leverage (net debt/EBITDA) (2.1x; 4.5x). 

Successful formation of JVs for technological assistance, acquisitions in India and abroad along with rationalisation of business structure through consolidation have helped diversify both product and customer base leading to improvement in revenue, margins and cash flows. While it maintained its leadership position in the security and safety products, it consolidated and grew its share of revenue from driver-informatics and telematics system leveraging its technological tie-ups. The customer base has been widened to lower the concentration risk with top five customers contributing less than 50% to the overall revenue.”

Commenting on the development, Mr. D.C. Sharma, Group Chief Financial Officer said:

Minda Corporation’s Credit Rating Upgraded by Fitch

I am very pleased to announce that our long debt facilities have been rated IND A+ by Fitch Ratings, reinforcing the credit worthiness of Minda Corp. This is underpinned by consistent efforts of the senior management team to diversify Minda Corp’s product portfolio and carry out expansion activities.

Over the years, we have continuously strived to deleverage our balance sheet without jeopardizing growth and margins. The rating has come at an opportune time, on the backdrop of several new initiatives in progress, and will help lower the cost of funding for Minda Corp.

Minda Corp has always believed in profitable and synergetic expansion, but only after doing a complete risk assessment and ensuring optimal capital mix of equity and debt. Our most recent expansion activities include a 50-50 Joint venture with SBHAP China and acquisition of Panalfa Autoelektrik.

With an unrelenting focus on shareholder wealth creation, we look forward to reaching greater heights. I thank all of you for placing your valuable trust in Minda Corp.” 

About Minda Corporation

Minda Corporation is a leading automotive component and flagship company of Spark Minda, Ashok Minda Group. The Company has a diversified product portfolio that encompasses Safety, Security & Restraint Systems; Driver Information & Telematics Systems and Interior Systems for auto OEMs. These products cater to 2/3 wheelers, passenger vehicles, commercial vehicles and after-market.

Strong customer base including key OEMs: Ashok Leyland, Bajaj, BMW, Daimler, Hero MotoCorp, Honda Motorcycle, Mahindra & Mahindra, Maruti Suzuki, Renault Nissan, Tata Motors, TVS Motors, Yamaha and VW Group.

The Company has 30 state of the art manufacturing facilities - India (27), South-East Asia (3) and Europe (3) and a representative office in Japan with a workforce of over 10,000.

The turnover of Minda Corporation was Rs. 2,445 Crores in FY 2015-16 with international business accounting for 21% of revenues.

India Ratings & Research (Fitch)
Long Term
IND A+/ Stable
India Ratings & Research (Fitch)
Short Term
India Ratings & Research (Fitch)
Commercial Paper