India Ratings and Research (Ind-Ra) has upgraded the short-term rating on KNR Constructions's bank loan facilities to 'A1+' from 'A1' while affirming the long-term rating at 'A+' with a stable outlook. The agency has also assigned KNRCL's proposed Rs 500 million commercial paper (CP) programme an 'A1+' rating.

The CP has been carved out of the existing cash credit facilities. The CP proceeds will be used for funding the working requirements of the company.

The upgrade in the short-term debt rating reflects the improvement in KNRCL's financial flexibility as a result of higher profitability in FY16 and receipt of a large tax refund of Rs 190.7 million during 1HFY17. EBITDA increased to Rs 436.9 million in 1QFY17 from Rs 246.7 million in 1QFY16.

Shares of the company declined Rs 4.50, or 0.64%, to trade at  Rs 700.00 at the BSE (12.51. p.m., Wednesday).