Shares of Sterlite Technologies have rallied 35 percent in the last 2 months. Credit rating agency ICRA upgraded the ratings on the company's non-convertible debenture (NCDs) and letter of credits (LoCs) to AA from AA-.
Anand Agarwal, CEO of Sterlite Technologies, spoke to CNBC-TV18 about the company's business plans and growth outlook.
Agarwal said,"The cost of financing will go down on NCD post ICRA upgrade of rating."
“The rating is essentially a reflection of stronger balance sheet and outlook that the company has on financials moving forward,” he said.
Talking about the business, Agarwal said, “The debt is increasing essentially by the capital expansion that we are going through for going from 30 million km to 50 million km. We are spending a total of Rs 1200 crore, so part of it is coming from accruals and part of it we are financing through balance sheet for the short-term.”
“We just finished an acquisition in Europe for which we paid about Rs 350-360 crore, so that is also getting added to the debt portfolio,” he added.
According to Agarwal, "In the short-term the overall debt of the company is going up but with improved financials quarter-on-quarter, all the ratios continue to be healthy."
He further said that the orderbook is at an all-time high at over Rs 6,000 crore.