CRISIL has reaffirmed its credit ratings with respect to the bank facilities and debt instruments of Entertainment Network (India) Limited. The credit rating agency reaffirmed on total bank loan facilities rated Rs100 crore (upgraded from Rs50 crore).
The long-term rating was reaffirmed at CRISIL AA+/Stable and the short-term rating at CRISIL A1+. For the non-convertible debentures (NCD) of Rs50 crore, the CRISIL AA+/Stable rating has been reaffirmed. The Rs300 crore commercial paper rating was reaffirmed at CRISIL A1+.
At around 09:48, Entertainment Network (India) Ltd was trading at 172 rupees per share, up 3.55 rupees or 2.11% from its previous close of 168.45 rupees per share on BSE.
“CRISIL Ratings has reaffirmed its ‘CRISIL AA+/Stable/CRISIL A1+’ ratings on Entertainment Network (India) Limited’s (ENIL) Rs350 crore bank facilities and debt programs. revenue growth in the second and third quarters of FY2022 as radio advertising volumes increased Ebitda (earnings before interest, tax, depreciation and amortization) improved to Rs35.6 crore in third quarter (compared to a loss of Rs18.7 crore suffered in the second quarter) due to strict cost control measures and improved advertising volumes.However, the company is launching the Mirchi digital platform in international markets and which will weaken the Ebitda margin in FY2023,” the rationale for CRISIL’s rating shared on Wednesday.
The ratings also continue to reflect ENIL’s market leadership in the FM broadcasting sector, a comfortable financial risk profile backed by strong liquidity and the backing of parent company, Bennett Coleman and Company Ltd (BCCL; “ CRISIL AAA/Stable”). These strengths are partially offset by a heavy reliance on advertising revenue and exposure to intense competition, he added.
Analytical approach
To arrive at its ratings, CRISIL Ratings combined the business and financial risk profiles of ENIL and its subsidiaries, Alternate Brand Solutions (India) Ltd, Entertainment Network, Inc (EN, INC), Global Entertainment Network Limited WLL and Mirchi Bahrain WLL, who have commercial and financial links with ENIL. ENIL’s operations in the United States are hosted by EN, INC. CRISIL Ratings has also applied its mark-up criteria to take into account the extent of support expected from BCCL.
