The agency has also affirmed 'IND A1+' to GHCL for issuance of commercial paper (CP) of Rs 100 crore, which shall be carved out of existing working capital facilities. The CP proceeds will be used for fulfilling working capital requirements/refinancing of debt/bridge finance/capital expenditure.

India Ratings said that the affirmation reflects GHCL's continued healthy business profile, reflected in its leading market position in the domestic soda ash industry, competitive cost structure, resilient margin profile and healthy credit metrics, which are likely to be sustained over the medium term.

The ratings factor in GHCL's sale of home textiles business and the proposed demerger of the textile segment, which are likely to result in a more stable earnings profile.

The Fitch Group Company stated that an increase in the scale of operations, and profitability, accompanied by an improvement in the overall credit metrics, all on a sustained basis, could result in a positive rating action.

A negative rating action could result from either a deterioration in the profitability or a - higher-than-expected debt diversion from the textile entity post demerger or a higher-than-expected debt-led capex.

GHCL is a diversified group which manufactures soda ash and textiles. Its 1.1mtpa soda ash facility is located in Sutrapada, Gujarat. The company's textile division is composed of a spinning facility in Madurai and has a capacity of around 27,000 tonnes.

The company's consolidated net profit zoomed to Rs 292.56 crore in the quarter ended September 2022 as against Rs 109.95 crore during the previous quarter ended September 2021. Sales rose 72.03% to Rs 1381.09 crore in Q2 FY23 over Q2 FY22.

The scrip fell 1.69% to end at Rs 568.20 on the BSE today.