Rating agency Crisil has assigned a 'B+' rating with 'Stable' outlook to the long-term bank facilities of Kamal Haasan (KH), a proprietary firm of superstar Kamal Haasan. The rating is for the long-term banking loan facility worth Rs 25 crore.

The agency noted that the firm will continue to benefit from the extensive industry experience of its proprietor but has cautioned against concentration risks.

“The rating reflects a high degree of geographic concentration in revenue profile and exposure to risks inherent to the film industry. These weaknesses are partially mitigated by established presence and proprietor's extensive industry experience,” the firm said in its ratings note.

KH is a proprietorship firm with interests in directing, acting, and producing, mainly in the Tamil film industry.

"The operations are mainly confined to Tamil Nadu limiting its revenue; consequently, any dispute between the exhibitors and distributors, or strike in the film industry, or agitations by political parties will have a negative impact on revenue," the firm said.

As per the rating agency, healthy revenue growth along with improved operating profitability and improvement in capital structure could lead to upward rating revision while weakening in interest coverage ratio and decline in revenue or profit margin leading to cash accruals less than Rs 4.2 crore pose downward rating risks.

In the absence of working capital limits, any cash flow mismatches may severely impact the liquidity of the firm, Crisil added.

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