Penalty on cement cos credit neutral | India Ratings

Penalty on cement cos credit neutral | India Ratings

The Competition Commission of India´the players´ 2015-16 operating profits, however, the move is credit neutral due to their low leverage levels, said India Ratings and Research.

´Most of the companies (eight out of 11) maintain a low leverage and thus will be in a position to absorb the burden, in the event the penalty has to be paid. The penalty, however, will put pressure on the credit metrics for companies with relatively high levels of leverage,´ the ratings agency said in a statement.

Fair trade regulator CCI in its order dated August 31, 2016 imposed a penalty of Rs 6,700 crore on 11 cement companies for alleged cartelisation.

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