The Reserve Bank of India has discontinued the issuance of Letters of Undertaking (LoU) and letters of comfort for trade credit by banks.
Anil Gupta, CMD of KEI Industries anticipated that LoU ban will not have any impact on the company’s business. “We expect to grow around 17-18 percent,” he said.
However, Gupta mentioned that the ban may lead to temporary hike in the cost of funding of raw materials but would not affect exports.
The estimated contribution from retail segment to revenues is at 33 percent which is expected to rise to 40 percent by FY20.