The ratings assigned to the bank facilities of Atul Products Limited (APL) draw significant comfort from its strong parentage being a wholly-owned subsidiary of Atul Limited, whereby the entire project cost of APL’s ongoing greenfield caustic-chlorine and related captive power plant is envisaged to be financed through fund infusion by Atul.

The ratings also derive comfort from Atul’s experience in setting-up and operating caustic-chlorine manufacturing facilities, envisaged synergies from the captive power plant, location benefits, some captive consumption of APL’s products by Atul and improved industry scenario.

APL draws significant comfort from its strong parentage, being a wholly-owned subsidiary of Atul, whereby the entire project cost of APL’s ongoing greenfield caustic-chlorine and related captive power plant is envisaged to be financed through fund infusion by Atul.

Atul already has an operational caustic-chlorine manufacturing facility of 125 Tonne Per Day (TPD) which it had previously setup at its Valsad plant. This experience of Atul is expected to help APL during implementation and stabilization of its project as its entire management team comprises of personnel from Atul.

Total cost of the ongoing greenfield project of APL is envisaged at around Rs.818 crore (including GST of Rs.125 crore on capital goods and services) which is proposed to be entirely funded by equity capital, preference share capital and extension of unsecured loan by Atul. APL has planned to avail capex LCs out of its sanctioned limit from the bank for import of machineries for the project which would be ultimately settled with the infusion of funds by Atul.

The project in APL is being set-up on the lease-hold land of Atul at Valsad which is expected to provide synergetic benefits for both companies. Out of total capacity of 300 TPD of caustic-chlorine of APL, around 200 TPD is proposed to be in the form of lye while the remaining 100 TPD is envisaged to be in the form of flakes.