- Commercial paper programme - Rs. 6 crore
- Rating : P1+
A P1+ (pronounced P one plus) rating has been assigned to the proposed Rs 60 million commercial paper programme of Asian PPG Industries Limited (APPG).
The rating primarily factors in the strength derived by APPG from its strong parentage of Asian Paints (India) Limited - the largest Indian producer of architectural coatings - and PPG Industries Inc. of USA - the world's leading supplier of automotive and industrial coatings. CRISIL expects the technological, financial, and business support received by APPG from its parents, to continue in the future.
The rating also takes into account the company's established position in the domestic automotive paints industry, association with some of the leading automotive producers, and moderate capital structure. These factors are partly offset by cyclicality in the user automotive industry, high degree of competition in the industry, and lower profit margins in the OEM business. In the future, CRISIL does not expect the company's gearing to increase from existing levels.
APPG is a 50:50 joint venture between Asian Paints (India) Limited and PPG Industries Inc. of USA. As per the agreement between the two parents, their business of paints for automotive industry, auto-ancilliaries, and other industrial appliances in India would be exclusively carried through APPG. Asian Paints has an outstanding long-term rating of AAA by CRISIL and PPG Industries has been rated A by S&P.