India Ratings and Research (Ind-Ra) has affirmed Kothari Products’ (KPL) Long-Term Issuer Rating at ‘IND A-’. The outlook is stable.

Ind-Ra continues to take a consolidated view of KPL and its subsidiaries. KPL is part of the diversified Kothari group of companies which includes Pan Parag India (PPIL) and several other companies involved in the real estate, hospitality and education sectors. KPL and PPIL have common directors and are led by Deepak Kothari (sponsor).

The ratings are supported by the sponsor’s more than three decades of experience in the commodity trading industry, and the company’s large scale of operations (consolidated FY15 revenue: Rs 66.3 billion) and its established relationships with customers and suppliers. KPL also has investments in the real estate sector, which reported segmental revenue of Rs 166 million and Rs 221 million in FY15 and FY14, respectively.

The company is exposed to a high concentration risk as over 50% of the sales is through the top three customers and more than 90% is through the top five customers. Also, it restricts its supplier and customer base to take the benefit of better pricing from suppliers and ease of operations.