/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/170123.mbx T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Monday, January 23, 2017, Vol. 20, No. 16 Headlines A U S T R A L I A BRISBANE BAROQUE: Festival Placed Into Voluntary Liquidation CRUSADE ABS 2016-1: Moody's Hikes Class E Notes Rating From Ba1 GABBA HOLDINGS: First Creditors' Meeting Set for Jan. 31 PUMPKIN PATCH: To Close All Stores After No Buyer Found WORLD RUGBY: Consortium of Private Investors Acquires BLK C H I N A FUFENG GROUP: S&P Revises Outlook to Positive & Affirms 'BB+' CCR SUNAC CHINA: Moody's Changes Outlook to Negative on B2 CFR YUZHOU PROPERTIES: Moody's Rates New USD Sr. Unsecured Notes B1 I N D I A AAKARSHIT ICE: CRISIL Assigns B+ Rating to INR6.5MM Cash Loan AMRIT AGRO: CRISIL Assigns 'B' Rating to INR3.25MM LT Loan ANUPAM INDUSTRIES: CRISIL Assigns B- Rating to INR108MM Loan ARS AGRO: Ind-Ra Assigns 'B' Long-Term Issuer Rating BALAJI INSTALMENTS: CRISIL Assigns FB Rating to INR3MM Fixed Dep. BHARAT CHEMICALS: ICRA Assigns B+ Rating to INR14cr Loan BNSR INDUSTRIES: Ind-Ra Affirms 'BB-' Long-Term Issuer Rating CDE ASIA: Ind-Ra Lowers Long-Term Issuer Rating to 'BB' COLOSSUS TRADE: ICRA Revises Rating on INR25cr Loan From B+ CONTINUAL RENEWABLE: Weak Fin'l Strength Cues ICRA SP 4D Grading CYNOSURE MANIK: Ind-Ra Assigns 'BB' Rating on INR55MM Bank Loans DELCO INFRASTRUCTURE: Ind-Ra Assigns 'BB' Long-Term Issuer Rating DEWAN HOUSING: Fitch Plans to Withdraw 'BB' LT FC IDR ELECTRONIC APPLYANCES: CRISIL Assigns B+ Rating to INR7.5MM Loan FERROMET STEELS: ICRA Reaffirms 'D' Rating on INR25cr Loan FORTPOINT AUTOMOTIVE: CRISIL Ups Rating on INR16.28MM Loan to B G. VENKATESHWAR: CRISIL Reaffirms 'B' Rating on INR5MM Cash Loan GURUKRUPA DEVELOPERS: ICRA Reaffirms B+ Rating on INR125cr Loan HAV MOTORS: CRISIL Reaffirms B+ Rating on INR7.0MM Loan HYDROMATIK: ICRA Reaffirms B+ Rating on INR6.62cr LT Loan INDIAN PROGRESSIVE: CRISIL Cuts Rating on INR20MM Overdraft to B+ IVRCL CHANDRAPUR: ICRA Reaffirms 'D' Rating on INR313.99cr Loan KUSHALAVA SPINNERS: CRISIL Assigns B- Rating to INR6.0MM LT Loan LOCKSMITHS INDUSTRIES: ICRA Reaffirms B- Rating on INR5.25cr Loan M-BO GRANITO: ICRA Assigns 'B' Rating to INR8.80cr Loan MADHYARANGA ENERGY: ICRA Withdraws 'B' Rating on INR30cr Loan MODTECH MATERIAL: Ind-Ra Assigns 'BB+' Long-Term Issuer Rating NANDU CHEMICALS: CRISIL Assigns B Rating to INR6.44MM Term Loan NATURAL AGRITECH: Ind-Ra Assigns 'B-' Long-Term Issuer Rating OME SREE: Ind-Ra Assigns 'D' Long-Term Issuer Rating OPAL LUXURY: CRISIL Assigns 'D' Rating to INR8MM Cash Loan PARAS FOODS: CRISIL Lowers Rating on INR5MM Cash Loan to 'D' PCI LIMITED: CRISIL Reaffirms 'D' Rating on INR100MM Loan PHALANX LABS: CRISIL Reaffirms B- Rating on INR31.5MM LT Loan PRAKASAM ENTERPRISES: CRISIL Reaffirms B+ Rating on INR10MM Loan PRIME LEATHERS: CRISIL Lowers Rating on INR6MM Cash Loan to B+ PUNEET AUTOMOBILES: Ind-Ra Affirms 'BB' Long-Term Issuer Rating R.P. STEEL: ICRA Hikes Rating on INR10cr Fund Based Loan From B RAJESH SPICES: CRISIL Assigns 'B' Rating to INR5MM Cash Loan RICHI TRAVELS: CRISIL Reaffirms B+ Rating on INR5.0MM Cash Loan SABARI TEXTILES: ICRA Reaffirms 'D' Rating on INR12.47cr Loan SAHAJ FASHIONS: CRISIL Hikes Rating on INR17MM Cash Loan to BB- SAMBHAJI RAJE: ICRA Assigns 'B-' Rating to INR5.0cr Cash Loan SANGRAM CANE: CRISIL Assigns B- Rating to INR27MM LT Loan SAURABH SOLAR: Weak Financial Strength Cues ICRA SP 4D Grading SHREE VENTURES: CRISIL Lowers Rating on INR5MM Cash Loan to 'D' SKAJEN VITRIFIED: CRISIL Assigns B+ Rating to INR18MM LT Loan SLK PROGRESSIVE: CRISIL Reaffirms B+ Rating on INR2.0MM LT Loan STARBURST MOTORS: Ind-Ra Assigns 'B+' Rating to INR165MM Loan SUNGRO SEEDS: Ind-Ra Affirms 'BB' Long-Term Issuer Rating SV ISPAT: Ind-Ra Assigns 'BB' Long-Term Issuer Rating TAMILNADU STATE: CRISIL Reaffirms B- Rating on INR13MM Cash Loan VEGA ENTERTAINMENT: Ind-Ra Lowers Long-Term Issuer Rating to 'D' VIJAY BREEDING: CRISIL Reaffirms B+ Rating on INR4.05MM Cash Loan VIJAY STONE: ICRA Reaffirms 'B' Rating on INR4.90cr Loan WHITE BRICKS: CRISIL Lowers Rating on INR14.5MM Term Loan to B J A P A N TOSHIBA CORP: Seeks Buyers for American Gas N E W Z E A L A N D ABT CONSTRUCTION: In Liquidation; Creditor Claims Due Jan. 27 JAMIE'S ITALIAN: Shuts 6 UK Restaurants; Effect on NZ Unclear RELATIONSHIPS AOTEAROA: Unsecured Creditors Unlikely to Recoup - - - - - ================= A U S T R A L I A ================= BRISBANE BAROQUE: Festival Placed Into Voluntary Liquidation ------------------------------------------------------------ Phil Brown at The Courier-Mail reports that the State Government has stepped in to help pay creditors owed money by a high-brow Brisbane festival that has gone into voluntary liquidation. According to The Courier-Mail, Tourism and Events Queensland's Group Executive - Corporate Affairs Megan Saunders said TEQ would stand by its offer to help pay creditors owed money by the Brisbane Baroque festival. "It is now a matter for the liquidators who we will work with as required," the report quotes Ms. Saunders as saying. "Our offer to alleviate the hardship suffered by creditors of Brisbane Baroque by contributing a voluntary payment equal to the post- event payment to those creditors still stands. TEQ does not owe any sum to Brisbane Baroque. "We are of course disappointed but our focus remains on continuing to secure events which drive the best tourism outcomes possible for the state." For a while, Brisbane Baroque looked like doing that, the report relates. QPAC has moved to distance itself from Brisbane Baroque, even though it was an "in association" partner and provided in-kind support. The Courier-Mail relates that a spokesperson said they did not receive any formal communication from Brisbane Baroque Limited and, like everyone else, they had to refer to the published statement advising Brisbane Baroque Limited's decision to place the company into voluntary administration. Brisbane Baroque festival was officially put into voluntary liquidation on Jan. 15, 2016. The boutique classical music festival had Australia's most famous arts impresario, Leo Schofield, as its artistic director and was being hailed as proof that Brisbane had come of age culturally. CRUSADE ABS 2016-1: Moody's Hikes Class E Notes Rating From Ba1 --------------------------------------------------------------- Moody's Investors Service has upgraded the ratings on four classes of notes issued by Perpetual Corporate Trust Limited as trustee of the Crusade ABS Series 2016-1 Trust. The affected ratings are as follows: Issuer: Crusade ABS Series 2016-1 Trust $A65M Class B Notes, Upgraded to Aa1 (sf); previously on Apr 26, 2016 Definitive Rating Assigned Aa3 (sf) $A52M Class C Notes, Upgraded to A1 (sf); previously on Apr 26, 2016 Definitive Rating Assigned A2 (sf) $A36.4M Class D Notes, Upgraded to Baa1 (sf); previously on Apr 26, 2016 Definitive Rating Assigned Baa3 (sf) $A26M Class E Notes, Upgraded to Baa3 (sf); previously on Apr 26, 2016 Definitive Rating Assigned Ba1 (sf) RATINGS RATIONALE The upgrade mainly reflects the correction of a model input error related to the yield of new receivables purchased during the Substitution Period. At the time the definitive ratings were assigned, the yield for new receivables was incorrectly set up, which decreased the transaction's total yield. The rating action reflects the correct cash flow modelling. The principal methodology used in these ratings was Moody's Global Approach to Rating Auto Loan- and Lease-Backed ABS published in October 2016. Factors that would lead to an upgrade or downgrade of the ratings: Factors that could lead to an upgrade of the ratings include (1) an increase in the notes' available credit enhancement, and (2) performance of the underlying collateral that is better than Moody's expectation. Factors that could lead to a downgrade of the ratings include (1) a decrease in the notes' available credit enhancement, (2) performance of the underlying collateral that is worse than Moody's expectation, and (3) deterioration in the credit quality of the transaction counterparties. GABBA HOLDINGS: First Creditors' Meeting Set for Jan. 31 -------------------------------------------------------- A first meeting of the creditors in the proceedings of Gabba Holdings Pty Ltd will be held at the offices of Vincents, Level 34, 32 Turbot Street, in Brisbane, Queensland, on Jan. 31, 2017, at 10:00 a.m. Nick Combis of Vincents was appointed as administrator of Gabba Holdings on Jan. 18, 2017. PUMPKIN PATCH: To Close All Stores After No Buyer Found ------------------------------------------------------- The Australian reports that all Pumpkin Patch will close by mid- February after receivers couldn't entice a buyer for the failed children's wear chain, which traded through the traditionally busy holiday period. Sixty-eight stores employing 560 people will close by January 31, and the remaining 56 stores across New Zealand and Australia will shut as and when stock is sold, through the middle of next month, receiver Neale Jackson of KordaMentha said in a statement, according to The Australian. The Australian says Pumpkin Patch staff at head office will lose their jobs over the coming weeks. "We have successfully traded stores through the traditional holiday period and stock levels are now considerably reduced," The Australian quotes Mr. Jackson as saying. "The balance of stock will be consolidated in the remaining stores as the receivership enters its final phase." The Australian notes that the company was tipped into receivership by its lenders in October and appointed voluntary administrators after failing to reinvent itself in the face of shrinking sales and too much debt. The receivers wanted to sell the business as a going concern, but couldn't shake out any buyers. It had last year closed 27 stores, mostly in regional and suburban Australia, but had outlined plans to keep the remainder in operation until a buyer was found, according to The Australian. Pumpkin Patch owed its lender ANZ Bank New Zealand US$59.5 million (AUD78.6 million) as of the date of receivership, the report said, up from US$46 million (AUD60.8 million) at the year ended July 2016, when it posted an annual loss of US$15.5 million (AUD20.5 million), The Australian discloses. Mr. Jackson said all staff were aware that stores would gradually close as stock was sold and would receive holiday pay, outstanding wages and any other entitlements, The Australian relates. "This has been a very difficult time for all Pumpkin Patch staff. We acknowledge them for continuing to work diligently to see the closure process through," the report quotes Mr. Jackson as saying. About Pumpkin Patch Based in New Zealand, Pumpkin Patch Limited (NZE:PPL) -- http://www.pumpkinpatch.biz/-- is a designer, marketer, retailer and wholesaler of children's clothing. The Company's product range encompasses all stages of a child's growth, from baby to toddler, primary school kid to pre and early teen, including clothing, nightwear, accessories, rainwear, footwear and teddy collection. Pumpkin Patch also caters for mums-to-be with a maternity collection. The Company also has a fashion mini-brand for discerning pre and early-teen girls, Urban Angel Girls. The Company's collections are available in numerous countries and regions, including New Zealand, Australia, the United Kingdom, the United States, South Africa and the Middle East. Pumpkin Patch predominantly sells through its own store network in New Zealand, Australia, the United Kingdom and the United States. The Company's subsidiaries include Torquay Enterprises Limited, Pumpkin Patch Originals Limited, Pumpkin Patch LLC, Pumpkin Patch Direct Limited, Patch Kids Limited and Urban Angel Girls Limited. On Oct. 26, the Board of Pumpkin Patch has placed the company into Voluntary Administration under Part 15A of the Companies Act 1993. The board has therefore appointed Andrew Grenfell and Conor McElhinney of McGrathNicol as administrators for Pumpkin Patch and a number of its subsidiaries. Pumpkin Patch's bank has appointed Neale Jackson and Brendon Gibson of KordaMentha as receivers. WORLD RUGBY: Consortium of Private Investors Acquires BLK --------------------------------------------------------- SmartCompany reports that a private consortium of Fijian and Timor-Leste investors has bought troubled sportswear manufacturer BLK from receivers McGrathNicol. According to the report, the consortium, lead by Timor-Leste oil and energy company Esperanca Timor Oan (ETO), acquired BLK from its parent company World Rugby Specialists for an undisclosed sum. SmartCompany relates that the receivers revealed BLK will maintain its partnerships with a number of its previously sponsored clubs. According to SmartCompany, Esperanca Timor Oan executive director Nilton Gusmao dos Santos said the BLK purchase would allow ETO to move beyond the energy sector, with the BLK brands to be established under a new company called BLK International Pty Ltd. Esperanca Timor Oan will also keep BLK's executive team and senior management on board, including presiding chief executive Tyson Brant, the report says. In a statement, Mr. Brant said the company will continue under the new ownership, the report relates. "BLK International expects to maintain a high level of customer service and market leading innovation and intends to better deliver product and experience for BLK's loyal customers," the report quotes Mr. Brant as saying. SmartCompany says the business has managed to maintain high- profile partnerships with teams such as the Silver Ferns and A- League team the Newcastle Jets. It will also continue supplying its Australian and South African Super Rugby clubs, UK's Saracens and Ospreys rugby clubs, Ireland's Connacht Rugby, Stade Toulousain in France, Ricoh Black Rams in Japan and Canterbury in New Zealand. No contracts with AFL or NFL teams have been maintained, although Mr. Brant hopes the business will return to its former glory in time, the report says. "Despite the clubs terminating their arrangements with BLK, BLK International is confident that it will be able to replace that lost business over the medium term once it has rebuilt confidence in the brand," Mr. Brant, as cited by SmartCompany, said. About BLK World Rugby Specialists and World Rugby Specialists Group, operated as BLK, which stood for Beyond Limits Known. World Rugby Specialists Group operates a national sports apparel wholesale and retail trade business that provides branded apparel to a range of customers including pro-teams, sporting associations, schools and major retailers. BLK had distributors from Ireland to the Solomon Islands. Jamie Harris and Anthony Connelly McGrathNicol of McGrathNicol were appointed as receivers in November 2016. ========= C H I N A ========= FUFENG GROUP: S&P Revises Outlook to Positive & Affirms 'BB+' CCR ----------------------------------------------------------------- S&P Global Ratings said that it had revised its outlook on Fufeng Group Ltd., a China-based food additive manufacturer, to positive from stable. At the same time, S&P affirmed its 'BB+' long-term corporate credit rating and 'cnBBB+' long-term Greater China regional scale rating on the company. "We revised the outlook to positive because we expect Fufeng to improve its profitability over the next 12-24 months despite operating in a maturing industry," said S&P Global Ratings credit analyst Clifford Kurz. "We also anticipate that the company will reduce capital spending over the period." S&P therefore estimates that Fufeng's free operating cash flow will turn positive, reducing the debt-to-EBITDA ratio below 2.0x and increasing the ratio of funds from operations (FFO) to debt to above 45% on a sustainable basis. S&P's base-case forecast assumes Fufeng's EBITDA margins will increase to 15%-16% in 2016 from 12% in 2015, despite lower topline growth across major product categories. The margin improvement is driven by the company's recent investments to increase operating efficiency at its monosodium glutamate (MSG) production facilities. Declining corn prices, a major input for production of MSG and xanthan gum (XG), should also support margins. S&P expects Fufeng to sustain strong profitability over the next 12-24 months driven by continued investment in production efficiency as well as a decline in corn prices. However, a fall in MSG prices as a result of the company's efforts to increase market share could temper the gains. Fufeng is already the market leader in MSG globally, with about 60% share of production in China and about 50% share of global production. However, S&P expects the company to take advantage of its low-cost production to reduce MSG prices further and pressure smaller players with higher cost structures. While Fufeng's profitability in the XG segment is likely to decline significantly in 2016, S&P believes a further fall is unlikely, given that the recovery in oil prices in 2016 should boost XG demand in 2017. The contribution of the XG segment to Fufeng's revenue has shrunk to about 5% and its share in profit is even lower. The impact of the segment on Fufeng's overall profitability is therefore likely to be small. S&P expects Fufeng to be more disciplined in capital spending over the next two years. S&P forecasts that capital expenditure will decrease to Chinese renminbi (RMB) 1.0 billion, from an average of about RMB1.8 billion over the past five years, as a result of maturing product categories and improved operating efficiency. S&P's capital spending forecast could be high, given that the company's maintenance capital expenditure is only RMB400 million. "The positive outlook on Fufeng reflects our expectation that the company's financial position will continue to improve over the next 12 months owing to higher margins and disciplined capital spending," said Mr. Kurz. S&P expects the debt-to-EBITDA ratio to fall below 2.0x and the FFO-to-debt ratio to rise above 45% during the period. S&P could revise the outlook to stable if: (1) Fufeng's profitability weakens such that the company's EBITDA margin falls below 14% over the next 12-24 months; and (2) the company risk tolerances increases, resulting in more acquisitions, diversification, or adoption of aggressive capital return initiatives for shareholders. The debt-to-EBITDA ratio increasing to above 2.0x or the FFO-to-debt ratio falling below 45% would indicate such deterioration. S&P may upgrade Fufeng if the company adopts and adheres to a prudent financial policy and demonstrates a risk tolerance that supports stability in financial metrics. S&P would raise the rating if the company's operating performance continues to improve and it generates consistently positive free cash flows, such that the debt-to-EBITDA ratio falls below 2.0x and the FFO- to-debt ratio rises above 45% on a sustainable basis. SUNAC CHINA: Moody's Changes Outlook to Negative on B2 CFR ---------------------------------------------------------- Moody's Investors Service has changed to negative from stable the outlook on Sunac China Holdings Limited's B2 corporate family and B3 senior unsecured ratings. At the same time, Moody's has affirmed both ratings. Moody's action follows Sunac's announcement on January 13, 2017 that it had entered into sales-and-purchase agreements to acquire 8.61% of Leshi Internet (unrated), 15% of Leshi Pictures (unrated), and about 33.5% of Leshi Zhixin (unrated) for a total consideration of around RMB15 billion. RATINGS RATIONALE "The negative outlook reflects Moody's concern that Sunac has increased its business risk because it has no experience in Leshi's businesses, which are developing. Furthermore, Sunac's liquidity position could be affected if further funding needs arise as Leshi expands its businesses," says Franco Leung, a Moody's Vice President and Senior Credit Officer. Leshi's businesses are, as indicated, developing and will take time to become profitable. Therefore, Moody's expects that the investment will add business risk to Sunac's business profile and will not generate meaningful cash flow over the next 12-18 months. Moody's points out that the RMB15 billion investment is a material amount and represents around 37.5% of Sunac's reported cash of around RMB 40 billion as of June 2016. Moody's expects the Chinese property market will continue to face regulatory challenges in the next 12 months. Such a situation could constrain Sunac's contracted sales growth which will in turn limit the growth of its cash balances. Thus, any capital call from Leshi could negatively impact its liquidity position. Sunac's B2 corporate family rating reflects its strong sales execution, leading brand and market position in first- and second-tier cities, as well as the good quality of its land bank. Sunac achieved strong attributable contracted sales of RMB104 billion in 2016 representing year-on-year growth of about 139%. The rating also considers the company's adequate liquidity profile. It has adopted a rapid asset turnover business model to manage its liquidity. Its reported cash of RMB40 billion in June 2016 provided coverage of around 1.6x against short-term debt. However, the rating is constrained by the high financial risk and high debt leverage associated with its fast expansion plans and acquisitive appetite. The adoption of a rapid asset turnover business model has resulted in declining profitability and weak interest coverage. Moody's estimates that Sunac's adjusted EBIT/interest and revenue/debt -- including adjustments for shares in joint ventures and associates -- will likely stay around 1.0x-1.3x and 50%, respectively, over the next 12 months. In addition, the company's strategy of using joint-venture (JV) partnerships in recent years to support growth has reduced corporate transparency and added volatility to its performance. Downgrade pressure could arise if Sunac (1) fails to generate positive contracted sales growth; (2) experiences a deterioration in its liquidity position, as evidenced by declining cash balances or cash/short-term debt below 100% on a sustained basis; or (3) shows a deterioration in its credit metrics, with adjusted revenue/debt below 50%-60% or adjusted EBIT/interest below 1x. Upward rating pressure is unlikely in the near term, given the negative rating outlook. However, the company's rating outlook could return to stable if it can (1) establish a track record of restraint in investing in non-core businesses; and (2) demonstrate an improvement in its credit metrics, such that EBIT/interest exceeds 1.5x and revenue/debt exceeds 55%. The principal methodology used in these ratings was Homebuilding And Property Development Industry published in April 2015. Listed on the Hong Kong Stock Exchange on 7 October 2010, Sunac China Holdings Limited is an integrated residential and commercial property developer, with projects in China's main economic regions of Beijing, Tianjin, Shanghai, Chongqing, Chengdu and Hangzhou. At end-June 2016, its gross land bank totaled 37.8 million square meters and its attributable land bank totaled approximately 24.7 million square meters. YUZHOU PROPERTIES: Moody's Rates New USD Sr. Unsecured Notes B1 --------------------------------------------------------------- Moody's Investors Service has assigned a B1 senior unsecured rating to the USD notes to be issued by Yuzhou Properties Company Limited (B1 positive). Yuzhou plans to use the proceeds from the proposed notes mainly to refinance existing indebtedness and for general working capital purposes. RATINGS RATIONALE "The proposed notes will improve Yuzhou's liquidity, lengthen its debt maturity and lower its funding costs," says Franco Leung, a Moody's Vice President and Senior Credit Officer, and who is also the International Lead Analyst for Yuzhou. The proposed notes will have limited impact on the company's leverage, because the proceeds will be mainly used to refinance its existing higher-cost debt. This use of the funds will in turn help lower Yuzhou's funding costs and thereby support its interest coverage position. Moody's estimates that Yuzhou's average borrowing costs will fall to around 5.5%-6.0% over the next 6-12 months from 6.3% in 1H 2016 and 7.0% in 2015. "Yuzhou's credit metrics will likely continue to improve relative to its B1 peers, as reflected by its positive rating outlook," adds Cindy Yang, a Moody's Assistant Vice President and Analyst, and who is also the Local Market Lead Analyst for Yuzhou. Yuzhou's revenue/adjusted debt will likely to improve to 70%-75% over the next 12 months, while EBIT/interest coverage will rise to around 3.5x over the same period. These likely results are based on Moody's expectation that the company can contain its debt growth, slow land acquisitions, achieve its sales target and maintain stable margins over the next two years. Yuzhou reported a 66% year-on-year growth in 2016, with full-year contracted sales totaling RMB23.2 billion. Such an achievement exceeded its revised full-year target of RMB22 billion and will support the company's revenue recognition over the next 1-2 years. Yuzhou's B1 corporate family rating continues to reflect its growing operating scale, increasing geographic diversification, robust profitability and sufficient liquidity. The B1 rating also reflects the company's moderately high debt leverage, as measured by revenue/adjusted debt. Moody's notes that Yuzhou has increased its use of onshore financing, a move which could raise in turn the subordination risk for offshore investors of debt securities, and lenders at the holding company level. Moody's will continue to monitor the company's funding strategy and assess the risk of subordination. The company's B1 senior unsecured bond rating could be under downgrade pressure, if the level of priority debt at the subsidiary level does not trend down for the fiscal year ended 31 December 2016. Upgrade pressure for the company's corporate family rating could emerge if Yuzhou can: (1) achieve a sustainable contracted sales growth, (2) reduce its debt leverage by controlling its appetite for land acquisitions, while ramping up revenue recognition, (3) maintain high profit margins, strong liquidity and interest coverage. The credit metrics indicating upgrade rating pressure would include revenue/adjusted debt above 70%-75% and EBIT interest coverage above 3.0x-3.5x on a sustained basis. On the other hand, the ratings outlook could return to stable, if Yuzhou shows: (1) slower-than-expected growth in contracted sales and revenue, (2) a strong appetite for land acquisitions, or (3) that its credit metrics are unlikely to reach upgrade levels over the medium term. In such a situation, EBIT interest coverage will fall below 3.0x and/or revenue/adjusted debt will remain below 65%-70%. The principal methodology used in this rating was Homebuilding And Property Development Industry published in April 2015. Yuzhou Properties Company Limited is a property developer that focuses on residential housing in the West Strait Economic Zone and Yangtze River Delta. The company recently moved its headquarters to Shanghai from Xiamen. At end-June 2016, it had a land bank of over 9.04 million square meters in terms of total saleable gross floor area. Of this land bank, 53% were in the Yangtze River Delta, 44% in the West Strait Economic Zone, and 3% in the Pan-Bohai Rim. ========= I N D I A ========= AAKARSHIT ICE: CRISIL Assigns B+ Rating to INR6.5MM Cash Loan ------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable' rating to the long- term bank facilities of Aakarshit Ice and Cold Storage Private Limited. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 6.5 CRISIL B+/Stable Term Loan 3.5 CRISIL B+/Stable The rating reflects the company's modest scale of operations and below-average financial risk profile because of high gearing and small networth. These weaknesses are partially offset by the extensive experience of its promoters in the agro commodities and cold storage businesses. Key Rating Drivers & Detailed Description Weaknesses * Modest scale of operations: With net sales of INR18 crore in fiscal 2016, scale remains small. Revenue was INR11 crore till December 31, 2016, and is expected to remain small in near term. * Below average financial risk profile: Networth was INR2.7 crore and gearing 1.5 times as on March 31, 2016. With ongoing, debt- funded capital expenditure (capex), gearing is expected to weaken further to about 3-3.2 times in near term. Strength * Extensive experience of promoters: Presence of over two decades has enabled the promoters to forge strong ties with suppliers and customers, which will continue to benefit business risk profile. Outlook: Stable CRISIL believes Aakarshit will continue to benefit over the medium term from the experience of its promoters. The outlook may be revised to 'Positive' if considerable ramp-up in operations and profitability leads to higher net cash accrual, or if significant equity infusion results in a better capital structure, thereby strengthening financial risk profile. The outlook may be revised to 'Negative' if steep decline in scale of operations or profitability, deterioration in working capital management, or large capex further weakens financial risk profile, especially liquidity. Incorporated in 1997 and promoted by Mr. Mangal Sain Madaan and family, Aakarshit is engaged in the cold storage business and also trades in agro commodities such as potato, carrot, chana, and jiggery. AMRIT AGRO: CRISIL Assigns 'B' Rating to INR3.25MM LT Loan ---------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the bank facilities of Amrit Agro (AA). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Short Term Bank Loan Facility 2 CRISIL A4 Cash Credit 2.25 CRISIL B/Stable Long Term Loan 3.25 CRISIL B/Stable The ratings reflect AA`s modest scale and working capital intensity in operations in the intensely competitive rice milling industry. The ratings also factor in susceptibility to project implementation risks, adverse government regulations and volatility in raw material prices. These rating weaknesses are partially offset by the partners' extensive experience and the stable demand for rice. Key Rating Drivers & Detailed Description Weaknesses * Exposure to project-related risks: AA is exposed to implementation and stabilisation risks on its ongoing project'to set up a mill at Kurud, (Chhattisgarh) for milling and processing paddy into rice, rice bran and broken rice. The mill, with capacity of 3 tonne per hour (tph), is expected to cost INR5.2 crore, and will be funded primarily by term loan of INR3.25 crore. Commercial production is expected to begin in April 2017. * Susceptibility to adverse regulations, volatility in raw material prices, and vagaries of monsoon: Cost of paddy accounts for 80-85% of the cost of producing rice. In response to domestic market conditions, GoI periodically imposes restrictions on rice exports and on price increases in the domestic market, thus constraining rice millers' profitability. * Small scale of operations in a highly fragmented industry: Scale of operations may remain modest (revenue is expected at INR11 crore in fiscal 2018), because of intense competition in the rice processing industry, constraining ability to bargain with suppliers and customers. Strength * Benefits from the promoters' experience and the stable demand for rice: AA is promoted by Mrs Hemeshwari Bhaghel, with operations managed by her husband, Mr. Dharmendra Chandrakar, who has extensive experience in the rice milling industry. The firm also benefits from the steady demand for rice in India, the second largest consumer of rice in the world, with rice being a staple diet in the country. Outlook: Stable CRISIL believes AA will benefit from the healthy prospects for the rice processing industry over the medium term. The outlook may be revised to 'Positive' in case of timely implementation of production capacity and higher-than-expected revenue and profitability. Conversely, the outlook may be revised to 'Negative' in case of significant time and cost overrun in project completion, lower than-expected capacity utilisation, or significant stretch in working capital management, weakening financial risk profile. Set up in 2016, AA is setting up a non-basmati parboiled rice mill with capacity of 3 tph at Kurud, (Chhattisgarh). Operations are managed by Mrs. Hemeshwari Bhaghel and her husband, Mr. Dharmendra Chandrakar. Production is expected to commence from April 2017. ANUPAM INDUSTRIES: CRISIL Assigns B- Rating to INR108MM Loan ------------------------------------------------------------ CRISIL has assigned its 'CRISIL B-/Stable/CRISIL A4' ratings to the bank facilities of Anupam Industries Limited (AIL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Long Term Loan 4.18 CRISIL B-/Stable Inland/Import Letter of Credit 190.00 CRISIL A4 Cash Credit 108.00 CRISIL B-/Stable Corporate Loan 47.82 CRISIL B-/Stable The ratings reflect AIL's below-average financial risk profile because of moderately high gearing, weak debt protection metrics, and stretched liquidity driven by working capital-intensive operations. The ratings also factor in susceptibility of business and earnings to performance and cyclicality in end-user industries such as steel, power, and infrastructure. These weakness are partially offset AIL's established position in manufacturing and supply of a variety of cranes supported by the extensive experience of promoters and reputed clientele. Analytical Approach For arriving at the ratings, CRISIL has considered the standalone business and financial risk profiles of AIL. Key Rating Drivers & Detailed Description Weaknesses * Below-average financial risk profile and stretched liquidity: Gearing was above 1.5 times as on March 31, 2016, because of high reliance on large working capital borrowings and capital expenditure. Also, debt protection metrics were weak, with interest coverage and net cash accrual to total debt ratios of 1.61 times and 0.07 time, respectively, for fiscal 2016. However, networth was healthy at INR166.44 crore. Liquidity remains stretched due to working capital-intensive operations. Gross current assets have been over 450 days in the three years ended March 31, 2016, due to stretched receivables of over 200 days and large inventory of 250 days. High gross current assets constrain liquidity to a large extent, and improvement in working capital management will remain a key monitorable. * Susceptibility to performance and cyclicality in end-user industries: The cranes manufactured by AIL are predominantly used in iron and steel, power, cement, and infrastructure segments. The performance of these sectors is linked to the investment cycle of the economy and is hence cyclical in nature. The strain in the working of these sectors had impacted business as reflected in stagnant revenue and stretched receivables. Strength * Established position in the crane manufacturing business: AIL is among the leading crane manufacturers in India, with a sizeable scale of operations, reflected in operating revenue of INR283.56 crore for fiscal 2016. Experience of over two decades has helped scale up operations and establish a reputed clientele from public as well as private sectors enterprises. Outlook: Stable CRISIL believes AIL will benefit over the medium term from its established industry presence, but operations will remain working capital intensive and management of these requirements will be critical. The outlook may be revised to 'Positive' if significant improvement in working capital cycle strengthens the financial risk profile and liquidity. The outlook may be revised to 'Negative' if decline in profitability and cash accrual, or further stretch in the working capital cycle or large, additional, debt-funded capital expenditure results in deterioration in liquidity. Set up in 1973 in Anand, Gujarat, as a proprietorship concern by Mr. J C Patel and reconstituted as a public limited company in 1998, AIL manufactures a variety of cranes (electric overhead cranes, gantry cranes, and tower cranes) that find application in the steel, power, construction, ports and defence segments. The company is one of the largest overhead crane suppliers in India with manufacturing capability of 45,000 tonne per annum. Status of non-cooperation with previous CRA: AIL has not cooperated with ICRA Ltd, which suspended its ratings vide release dated December 26, 2016. Reason provided by ICRA was non- furnishing of information by AIL for monitoring ratings. ARS AGRO: Ind-Ra Assigns 'B' Long-Term Issuer Rating ---------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned A.R.S. Agro Business Private Limited (ARS) a Long-Term Issuer Rating of 'IND B'. The Outlook is Stable. *the ratings are provisional and the final rating will be assigned subject to execution of sanction letter for the above facilities. KEY RATING DRIVERS The ratings reflect no operational track record of ARS as it is in project phase. According to the management, the commercial production (processing of wheat) is expected to start from April 2017 for which the company is setting up a flour mill. The total cost of the project is estimated at INR135.49 million out of which promoter's contribution (share capital and unsecured loan) is INR72.49 million, term loan is INR55 million, subsidy from Ministry of Food is INR5 million and capital link subsidy is INR3 million. The ratings also reflect the cyclical risks in the wheat industry, along with the climatic conditions and price fluctuations. The ratings remain constrained by the industry's fragmented nature of operations. The ratings, however, are supported by ARS' locational advantage due to adequate irrigation facilities, abundant wheat availability in close proximity. The ratings are further supported by the management's experience of more than two and a half decades in the agro processing industry. RATING SENSITIVITIES Positive: The company's ability to execute the project and ramp up the operations/production in a timely manner along with achieving stable business operations could lead to positive rating action. Negative: The company's inability to execute the project and ramp up the operations/production in a timely fashion and/or any additional debt led capex impacting the debt servicing capability of the company would be negative for the ratings. COMPANY PROFILE ARS was originally incorporated on March 16, 1993, under the name of Escorts Trexim Private Limited. Subsequently, on March 31, 2011, the name of the company was changed from Escorts Trexim Private Limited to A.R.S. Agro Business Private Limited. ARS is currently managed by Ms. Kamlesh Tulsian and Mr. Aditya Shankar Parasar. ARS is setting up a flour mill in Chandauli district of Uttar Pradesh with capacity of processing 48,000 tonnes per annum (TPA) of wheat. The by-product of wheat processing is bran. The company plans to sell wheat and bran through agents and commission agents. Commercial operation of the company is expected to commence from April 2017. BALAJI INSTALMENTS: CRISIL Assigns FB Rating to INR3MM Fixed Dep. ----------------------------------------------------------------- CRISIL has assigned its 'FB/Stable' rating to the fixed deposit programme of Balaji Instalments Limited (BIL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Fixed Deposits 3 FB/Stable (Assigned) The rating reflects BIL's small scale of operations with regional concentration, and modest profitability. These weaknesses are partially offset by the promoter's experience in the commercial vehicle (CV) financing business, and BIL's moderate asset quality. BIL is a small non-banking financial company with a loan portfolio of INR2.21 crore as on September 30, 2016. Operations are concentrated in Pilibhit District, Uttar Pradesh. Profitability continues to be modest, with return on assets (ROA) of less than 1% in the past four years. However, BIL is expected to benefit from the experience of its promoters in the vehicle finance business. The management's keen grasp of the local market has helped maintain low delinquencies - gross non-performing assets were 0.9% as on September 30, 2016. Resource profile comprises retail fixed deposits. On account of the Reserve Bank of India (RBI) regulations, the company's ability to raise fixed deposit is limited to 1.5 times its networth. Furthermore, the company will not be able to accept or renew deposits in the absence of an investment-grade rating. Also, it will have to increase networth to INR2 crore to comply with RBI regulations. Key Rating Drivers & Detailed Description Weaknesses * Small scale of operations with geographical concentration BIL is a small non-banking financial company with a loan portfolio of INR2.21 crore as on September 30, 2016. Its operations are restricted to Pilibhit district of Uttar Pradesh. * Modest earnings profile: BIL's return on asset was below 1% for the past four fiscals, and declined to 0.6% in the first half of fiscal 2017 from 0.7% in fiscal 2016 and 1% in fiscal 2015. The company's ability to raise funds at competitive price will be critical for its profitability and growth. Strength * Promoter's extensive industry experience: The promoter has experience of about 27 years and has maintained moderate asset quality in the competitive CV financing business. * Moderate asset quality: The management's good understanding of the local market has helped keep delinquencies low. BIL had low gross non-performing assets of below 1% in the past four fiscals. It had GNPAs of 0.9% as on September 30, 2016. Outlook: Stable CRISIL believes BIL will remain a small player in the asset financing space, and its profitability will remain modest. The outlook may be revised to 'Positive' if the company significantly improves its market position, resource profile, and profitability. The outlook may be revised to 'Negative' if capitalisation is affected significantly because of deterioration in asset quality or profitability. BIL, incorporated in 1989, is deposit-accepting non-banking financial company promoted by Mr. Pramod Kumar Agarwal. It has operations only in Pilibhit. It provides loans for refinancing of used CVs such as trucks and buses. It had an outstanding portfolio of INR2.21 crore and networth of INR1.87 crore as on September 30, 2016. Its net profit was INR1.5 lakh on total income of INR16.8 lakh for fiscal 2016, against a net profit of INR1.7 lakh on a total income of INR11.3 lakh for the previous fiscal. For the first half of fiscal 2017, the PAT was INR0.70 lakh. BHARAT CHEMICALS: ICRA Assigns B+ Rating to INR14cr Loan -------------------------------------------------------- ICRA has assigned a long-term rating of [ICRA]B+ and a short-term rating of [ICRA]A4 to the INR18.10 crore bank facilities of Bharat Chemicals. The outlook assigned on the long-term rating is 'Stable'. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limit 14.00 [ICRA]B+(Stable)/Assigned Non Fund Based Limits 4.10 [ICRA]A4/Assigned The assigned ratings are constrained by BC's modest scale of operations limiting its operational and financial flexibility to an extent and leveraged capital structure due to withdrawal of capital by the partners; the coverage indicators stood weak in H1 FY2017 due to low profitability. Further, the capital expenditure plans outlined for the next two years are also likely to keep the cash flows under pressure. The firm's revenues are majorly dependent on a single product - Paracetamol - which is highly commoditised and characterised by low contributions. Further, the intense competition in the Paracetamol manufacturing segment, from larger Indian players as well as from China, restricts the pricing flexibility of BC, thereby exerting pressure on the margins. Profitability also remains exposed to movement in prices of its key raw material, Para Aminophenol (PAP) because of its linkage to crude oil and also to foreign currency fluctuations, given its purchases are largely met through imports. The ratings also factor in BC's exposure to government's regulations and business regulatory risks pertaining to quality and pollution control adherence for its manufacturing facilities. However, the ratings favourably factors in the long experience of the promoters and established presence of the firm in the domestic Paracetamol market for over three decades with established business networks, and diversified and repeat customer base. ICRA expects a moderate growth in revenue in FY2017 due to partial automation of its existing manufacturing facility. However, the firm's ability to scale up the operations would be largely contingent to improvement in demand, volatility in raw material prices, and uncertain regulatory scenario. Further, the firm's ability to infuse funds to support its capital structure and manage its working capital efficiently will be a key rating sensitivity. Key rating drivers Credit Strengths * Long experience of the promoters with the presence of over three decades in the domestic Paracetamol market which has resulted in established relation with customers as reflected in repeat orders; Healthy growth in revenue in FY2016 along with improved profitability. Credit Weakness * Modest scale of operations limiting its operational and financial flexibility; * Financial profile characterized by weak coverage indicators in H1FY2017, and leveraged capital structure on account of withdrawal of capital by partners; * Significant capex plans outlined for next two years likely to keep cash flows under pressure; * Business confined to a single product-Paracetamol; commoditized product vulnerable to price erosion and threat of backward integration into the same by end users; * Profitability exposed to any sudden movement in prices of the raw materials, profitability also vulnerable to foreign exchange fluctuations given the significant dependence on import. Sensitivities * Increase in scale of operations by ramp up in production from the recently expanded capacities, while maintaining the profitability levels; * Partnership firm, any significant withdrawals from the capital account by the partners would adversely affect its net worth and thereby its capital structure; * Regulatory risks associated with approvals with respect to quality and pollution control adherence. Description of key rating drivers highlighted: The operating income of Bharat Chemicals is moderate and stood at INR77.73 crore in FY2016, as compared to INR52.73 crore in FY2015. The firm derives 75% of its revenue from Paracetamol and remaining from trading of PAP; currently, BC has a capacity to produce 3000 MT of Paracetamol and the utilization has been around 88% in FY2016.With enhancement in production capacities of Paracetamol, the concentration of Paracetamol to BC's revenues is expected to remain high, going forward. In order to augment its capacity, the firm plans further automation and de-bottlenecking of its existing plant and also start manufacturing of PAP over the next two years. The total expenditure is expected to be around INR9 crore, which is to be funded by a mixture of unsecured loans and internal accruals. The gearing increased to 1.41 times as on March 31, 2016 from 1.09 times in the previous year, due to increase in working capital limit coupled with withdrawals from the capital account. Due to improvement in profitability, the coverage indicators like the interest coverage ratio and NCA/Total Debt improved considerably to 3.19 times and 53% respectively in FY2016 as against 0.67 time and 22% respectively in FY2015. With low profitability in the first half of FY2017, the coverage indicators worsened with the interest coverage ratio and NCA/Total Debt at 1.11 times and 21% respectively. With majority of the purchases being imports and the absence of formal hedging policies, the firm's profitability is exposed to foreign currency exchange rate fluctuation risk. Analytical approach For arriving at the ratings ICRA has considered the standalone financial performance of BC, along with recent operational developments. The firm doesn't have any subsidiary and operates as a standalone entity. Bharat Chemicals (BC) was established as a partnership firm in 1982. It manufactures paracetamol and trades in Para Aminophenol (PAP). The firm imports the key raw material- PAP from China; while other raw materials like Acetic Anhydride, Soda Ash, Sodium Hydro Sulphate, are obtained from the domestic suppliers. The products are sold to manufacturers of formulations or chemical traders located majorly in Maharashtra and Gujarat. The firm has its office in Mumbai and manufacturing facility in Tarapur (District: Thane, Maharashtra) with a manufacturing capacity of 3,000 metric tonnes per annum (MTPA). The firm registered a net profit of INR5.82 crore on an operating income of INR77.73 crore for the year ending March 31, 2016 and a net profit of INR1.12 crore on an operating income of INR36.76 crore for the half-year ending September 30, 2016(provisional numbers). BNSR INDUSTRIES: Ind-Ra Affirms 'BB-' Long-Term Issuer Rating ------------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed BNSR Industries Limited's (BNSR) Long-Term Issuer Rating at 'IND BB-'. The Outlook is Stable. KEY RATING DRIVERS The affirmation reflects improvement in BNSR's EBITDA margins in FY16 to 9.22% (FY15:7.88%; FY14:8.65%) on the back of decline in raw material cost and increase in other operating income. The margins supported the credit metrics with a nominal improvement in interest coverage (operating EBITDA/gross interest expense) to 1.60x in FY16 (FY15: 1.55x; FY14: 1.43x). However, the credit metrics still remain weak with net financial leverage (total adjusted net debt/operating EBITDAR) of 3.86x in FY16 (FY15: 2.65x; FY14: 3.97x). The ratings continue to remain constrained by BNSR's small scale of operations with revenue of INR107 million in FY16 (FY15: INR121 million; FY14: INR72 million). Further, the ratings reflect moderate-to-tight liquidity position as reflected in its 98% and 92% average utilization of the fund-based working capital and the non-fund-based working capital, respectively, during the 12 months ended December 2016. The ratings, however, benefit from more than 20 years of the promoters' experience in the cables and conductors manufacturing business. RATING SENSITIVITIES Positive: Substantial revenue growth while maintaining or improving the operating margins leading to the improvement in the credit metrics could be positive for the ratings. Negative: Dip in operating margins leading to deterioration in the credit metrics could be negative for the ratings. COMPANY PROFILE Incorporated in 1992, BNSR (ISO 9001-2000) is engaged in manufacturing of cables, conductors etc. used in distribution and transmission of electricity. It manufacturing units has installed capacity of 2000MT. The company belongs to the reputed BNSR group of eastern Uttar Pradesh having varied interest in Agrochemicals, Fertilizers, Power Petroleum and Cold Chains. CDE ASIA: Ind-Ra Lowers Long-Term Issuer Rating to 'BB' ------------------------------------------------------- India Ratings and Research (Ind-Ra) has downgraded CDE Asia Limited's Long-Term Issuer Rating to 'IND BB' from 'IND BB+'. The Outlook is Stable. KEY RATING DRIVERS The downgrade reflects CDE Asia's EBIDTA losses during FY15, which resulted in an overall deterioration in its credit metrics. The company reported EBITDA losses of 0.6% in FY15 as against EBITDA margins of 8.4% in FY14. The EBITDA losses were on account of change in the company's business model to manufacturing of generalized products as compared to customized products. Consequently, interest coverage and net leverage deteriorated to negative 0.3x in FY15 (FY14: 2.7x) and negative 40.5x (2.5x), respectively. The ratings also factor in the company's weak liquidity profile, with two instances of overutilization of working capital facilities during the six months ended December 2016. However, the same was corrected within two days. Although the company has shown improvement in its overall credit metrics in FY16, its top line declined substantially by around 31% to INR 361 million from INR524 million in FY15. EBITDA margins improved to 8.7% in FY16, resulting in an interest coverage of 1.6x and net leverage of 4.6x. During 9MFY17, the company reported revenue of INR337 million. The ratings continue to benefit from CDE Asia being a part of the Ireland-based CDE Group, which is a recognized brand in mineral washing equipment. RATING SENSITIVITIES Positive: A substantial increase in the revenue, leading to an improvement in the credit metrics, will be positive for the ratings. Negative: A further deterioration in the credit metrics will be negative for the ratings. COMPANY PROFILE Incorporated in 2007, CDE Asia is jointly promoted by the CDE Group and Manish Bhartia of Kolkata. The company provides fixed and mobile mineral washing equipment for sand, iron ore and limestone, and waste recycling. Since inception, CDE Asia has successfully completed over 200 installations. It has a manufacturing facility located in Dhulagarh, Howrah and a corporate office in Rajarhat, Kolkata. CDE Asia's parent, CDE Global Investments is the holding company of the CDE Group. The group's flagship company CDE Global, set up in 1992, is engaged in the designing, production, and sale of mobile washing equipment for iron ore, coal, and sand washing. The group has a presence in the Middle East, Asia, Europe and Brazil. COLOSSUS TRADE: ICRA Revises Rating on INR25cr Loan From B+ ----------------------------------------------------------- ICRA has revised the long-term rating to [ICRA]B from [ICRA]B+ for the INR25.00-crore cash credit facility of Colossus Trade Links Ltd. The outlook on the long-term rating is 'Stable'. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund-based Limits 25.00 Revised from [ICRA]B+ to [ICRA]B; Stable outlook assigned Rationale The rating revision is driven by the deterioration in CTLL's financial profile as evident from the 12% decline YoY in the operating income since FY2014 due to weak market demand, which has resulted in low realisations. Moreover, the net profit reduced in FY2016, resulting in a subsequent increase in gearing levels and other coverage metrics such as the TOL/TNW ratio. The liquidity of the company was stretched because of elevated working capital metrics caused by high receivables and inventory holdings, leading to almost full utilisation of the working capital limits availed from the bank. The rating was further constrained by the inherent cyclicality in the steel industry; the company's low net worth base and its competitive and fragmented nature, which limits its pricing flexibility and exposes it to raw material price fluctuation. Nevertheless, the rating derives comfort from the experienced promoter and the company's established relationship with major customers and suppliers. Going forward, the ability of the company to grow its operating income while sustaining its profitability, improving its capital structure and ensuring efficient working capital management will be the key rating sensitivity. Key rating drivers Credit Strengths * Established promoters of the company who have an extensive experience in the scrap trading business Credit Weakness * Decline in operating income in past two years * Intensely competitive and fragmented nature of the industry * Low operating margins because of low value-added business. * Exposure to cyclicality in steel industry * High gearing (4.26 times as on March 31, 2016) * Moderate debt protection metrics - the NCA/Debt ratio was 1.38% and the OPBDITA/Interest was 1.05 times in FY2016 Description of key rating drivers highlighted: CTLL's operating income has been declining since FY2014 on account of weak economic environment and subdued domestic demand, resulting in lower realisation of iron and steel crap. The company witnessed a growth of 16% in its volume sales in FY2016 but due to a fall of 27% in realisation, the sales declined by 15%. The operating margin of the company is generally low, owing to the trading nature of the business and the intensely competitive industry. Furthermore, on account of high interest expenses, the net margins have remained low over the years. Owing to increased receivables and inventory holdings, the working capital borrowings of the company has increased over the years. High debt coupled with low net worth has lead to leveraged capital structure and modest coverage indicators. The liquidity of the company remains stretched as evident from the almost fully utilised sanctioned bank limits in the recent past. Colossus Trade Links Ltd. was incorporated in 2004 by Mr. Namit Gulati and his family. The company trades in scrap metal procured from the domestic automobile sector. It derives its revenues by supplying scrap metal to foundries, steel plants, traders and electronic original equipment manufacturers (OEMs). CTLL is headquartered in Delhi and has seven warehouses (three owned and four rented) across northern India, with a combined area of over 15,000 square yards and a combined storage capacity of over 8000 tonnes. CTLL reported a net profit of INR0.28 crore on an operating income of INR99.59 crore in FY2016, as against a net profit of INR0.60 crore on an operating income of INR117.41 crore in FY2015. The company, on a provisional basis, reported an operating income of Rs 67 crore in 8M FY2017. CONTINUAL RENEWABLE: Weak Fin'l Strength Cues ICRA SP 4D Grading ---------------------------------------------------------------- ICRA has assigned 'SP 4D grading to Continual Renewable Energy Private Limited (CREPL), which indicates 'Weak Performance Capability' and 'Weak Financial Strength' of the channel partner & "Solar Photovoltaic - System Integrator" to undertake "Off Grid and Decentralized Solar Applications". The grading is valid for a period of two years from December 26, 2016 after which it will be kept under surveillance. Grading Drivers Strengths * Experienced promoters and technically qualified management * Diversified product portfolio provides broad clientele thus minimizing business risks arising out of product-oriented business practices Risk Factors * High competitive pressures from large number of organized/unorganized players * Small balance sheet size limits financial flexibility * Small scale of operations Fact Sheet Year of Incorporation 2016 Office Address C-09, Atharva Apartments, Sector No. 1, Plot No. 57, Indrayaninagar, Bhosari, Pune (MH) - 411039 Board of Directors Mr. Sunil Koli (Director) Mr. Sandeep Jangam (Director) Mr. Irshad Patil (Director) Established in year 2016, Continual Renewable Energy Private Limited (CREPL) is engaged in installation, commissioning and maintenance of Solar Photovoltaic Systems. The firm looks after the sales as well as services. CREPL has installed 30KW solar capacities in its first year of operations till date. CYNOSURE MANIK: Ind-Ra Assigns 'BB' Rating on INR55MM Bank Loans ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Cynosure Manik's Auto Centre's (CMAC) additional INR55 million bank loans an 'IND BB' rating with a Stable Outlook. RATING SENSITIVITIES Negative: A decline in the EBITDA margins leading to deterioration in the credit metrics could lead to a negative rating action. Positive: Sustained revenue growth with an improvement in the EBIDTA margins and credit metrics could lead to a positive rating action. COMPANY PROFILE Incorporated in 2003, CMAC is a proprietorship concern engaged in the dealership of two wheelers. CMAC is an authorized dealer of Hero Moto Corp Ltd. based in West Bengal. It has a showroom-cum- workshop and an additional workshop. The company is managed by Mr. Samir Kumar Bose. DELCO INFRASTRUCTURE: Ind-Ra Assigns 'BB' Long-Term Issuer Rating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Delco Infrastructure Projects Limited (DIPL) a Long-Term Issuer Rating of 'IND BB'. The Outlook is Stable. KEY RATING DRIVERS The ratings reflect DIPL's moderate credit profile. Revenue was INR402 million in FY16 (FY15: INR400 million). The company had a confirmed order book of INR1,010 million at end-October 2016, to be executed within two years. DIPL has indicated revenue of INR189 million during 1HFY17. EBITDA interest coverage (operating EBITDA/gross interest expense) was 2.3x in FY16 (FY15: 2.6x) and net financial leverage (total adjusted net debt/operating EBITDA) was 2.0x (1.8x); the deterioration in the credit metrics is on account of a decline in the margin. EBITDA margin reduced to 9.3% during FY16 from 12.0% in FY15 on account of increase in the steel and cement prices accounting for 80% of raw materials. The company's liquidity remains tight with fund-based facilities being utilized at an average of 95% over the 12 months ended December 2016. The ratings, however, are supported by the founder's experience of more than a decade in the EPC segment. RATING SENSITIVITIES Positive: Substantial growth in the top-line and improvement in profitability leading to a sustained improvement in the credit metrics could be positive rating action Negative: Substantial decline in the top-line or profitability and sustained deterioration in overall credit metrics of the company could lead to a negative rating action. COMPANY PROFILE Incorporated in 2006 DIPL is an EPC contractor engaged in the government projects. The company undertakes civil construction of road, bridges, railway lines and building construction. DIPL operates in Bihar and New Delhi. DEWAN HOUSING: Fitch Plans to Withdraw 'BB' LT FC IDR ----------------------------------------------------- Fitch Ratings plans to withdraw the ratings on Dewan Housing Finance Corporation Ltd. on or about, Feb. 22, 2017, which is approximately 30 days from date of this NRAC, for commercial reasons. Fitch currently rates Dewan Housing Finance Corporation Ltd. as: -- Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB'; Outlook Stable -- Long-Term Local-Currency IDR at 'BB'; Outlook Stable Fitch reserves the right in its sole discretion to withdraw or maintain any rating at any time for any reason it deems sufficient. Fitch believes that investors benefit from increased rating coverage by Fitch and is providing approximately 30 days' notice to the market of the rating withdrawal of Dewan Housing Finance Corporation Ltd. are subject to analytical review and may change up to the time Fitch withdraws the ratings. Fitch's last rating action for the above referenced entity was on March 9, 2016. Fitch assigned the company Long-Term Foreign- Currency and Local-Currency IDRs of 'BB' with Stable Outlook. ELECTRONIC APPLYANCES: CRISIL Assigns B+ Rating to INR7.5MM Loan ---------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to the bank facilities of Electronic Applyances (EA). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Overdraft 2.5 CRISIL A4 Proposed Long Term Bank Loan Facility 7.5 CRISIL B+/Stable The ratings reflect the firm's below-average financial risk profile, with subdued debt protection metrics, and modest scale of operations and profitability. These weaknesses are partially offset by the extensive experience of promoters in the electrical industry. Key Rating Drivers & Detailed Description Weaknesses * Below-average financial risk profile: The financial risk profile is constrained by subdued debt protection metrics, with interest coverage and net cash accrual to total debt ratios of about 1 time and 0.04 time, respectively, during fiscal 2016. * Modest scale of operations and profitability in the intensely competitive industry: EA is a midsized player in the intensely competitive trading industry and its scale has remained modest due to intense competition, leading to low margins. Strength * Extensive experience of partners in the trading industry: Experience of over 30 years has helped the partners gain experience, develop understanding of the dynamics of the industry, and maintain healthy relations with customers and suppliers. Outlook: Stable CRISIL believes EA's business risk profile will continue to benefit from the partners' extensive experience. The outlook may be revised to 'Positive' if significant improvement in scale of operations and operating margin results in stronger debt protection metrics. Conversely, the outlook may be revised to 'Negative' if deterioration in working capital management or any large capital expenditure leads to deterioration in the financial risk profile, including liquidity. Set up in 1976 as a partnership between Mr. Anil Rathi, Mrs. Kamladevi Rathi and Mr. Karan Rathi, EA trades in industrial electrical goods, and provides automation solutions. It is also a dealer in the products of Siemens Ltd, Cable Corporation of India Ltd, Bharat Bijlee, and Rittal India Pvt Ltd. The firm is based in Indore, Madhya Pradesh. FERROMET STEELS: ICRA Reaffirms 'D' Rating on INR25cr Loan ---------------------------------------------------------- ICRA has reaffirmed the long term rating assigned to the INR33.05 crore fund based and non fund based limits of Ferromet Steels Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit 25.00 Reaffirmed at [ICRA]D Term Loans 3.55 Reaffirmed at [ICRA]D ILG 0.50 Reaffirmed at [ICRA]D FLC/ILC 4.00 Reaffirmed at [ICRA]D Buyer's Credit (sub-limit of FLC/ILC) (4.00) Reaffirmed at [ICRA]D The rating action is based on the continued delays in the company's debt servicing. As part of its process and in accordance with its rating agreement with VIL, ICRA has been trying to seek information from the company so as to undertake a surveillance of the ratings, but despite repeated requests by ICRA, the company's management has remained non-cooperative. In the absence of requisite information, ICRA's Rating Committee has taken a rating view based on best available information. In line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated Nov. 1, 2016, the company's rating is now denoted as: "[ICRA] D ISSUER NOT COOPERATING". The lenders, investors and other market participants may exercise appropriate caution while using this rating, given that it is based on limited or no updated information on the company's performance since the time it was last rated. Ferromet Steels Private Limited (FSPL) is engaged in the manufacturing of structural steel products such as Mild Steel (MS) Flat, MS Angle, MS Round, MS Square, MS Channels. The company started its manufacturing operations with a capacity of 19,200 TPA in 2008 and later added additional capacity by setting up another rolling mill with a capacity of 21,600 TPA, which commenced operations during April 2012 (total installed capacity of 40,800 TPA). Apart from manufacturing structural steels, FSPL also engages in trading of structural steels to cater to customer orders, which are not produced in house. FSPL was initially incorporated under the name of S. R. M. C. Exports Limited in the year 1995 and was subsequently renamed in 2008. FSPL is promoted and managed by Mr. Manmohan Mittal and Mr. Ashok Kumar Goel, current directors of the company. FORTPOINT AUTOMOTIVE: CRISIL Ups Rating on INR16.28MM Loan to B --------------------------------------------------------------- CRISIL has upgraded its rating on the INR34.28 crore long-term bank loan facilities of Fortpoint Automotive Mumbai Private Limited (FAMPL) to 'CRISIL B/Stable' from 'CRISIL B-/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 3 CRISIL B/Stable (Upgraded from 'CRISIL B-/Stable') Inventory Funding 15 CRISIL B/Stable (Upgraded Facility from 'CRISIL B-/Stable') Proposed Long Term 16.28 CRISIL B/Stable (Upgraded Bank Loan Facility from 'CRISIL B-/Stable') The upgrade reflects expected improvement in the company's liquidity driven by increased cash accruals and enhanced profitability. Though revenue may improve only marginally, profitability will benefit from lower discounts offered to customers. Cash accrual should, therefore, be sufficient to service maturing term debt. Liquidity will improve over the medium term and continue to be supported by unsecured loans from the promoters (Rs 9.5 crores as on as on March 31, 2016). Analytical Approach CRISIL has treated unsecured loans of INR9.5 crore as neither debt nor equity as the same are from promoters, have no interest obligations and are expected to remain in the business over the long term. Key Rating Drivers & Detailed Description Weaknesses * Weak financial risk profile: Financial risk profile remains constrained by modest networth of INR4.63 crore, and high total outside liabilities to tangible net worth (TOLTNW) ratio of over 14.07 times as on March 31, 2016. Interest coverage is subdued at 1.2 times, but should improve with improvement in profitability. * Exposure to intense competition in the auto dealership business and to cyclicality in the commercial vehicles segment: Scale of operations is modest because of limited area of operations and competition from dealers of other principals. Also, given the nature of business, operations and profitability depend on the principal. Strength * Promoter's extensive experience and established relationship with principal: FAMPL is part of the Fortpoint group. The promoters have been in the auto dealership business for the past 25 years. Their extensive experience has helped FAMPL withstand economic cycles. Outlook: Stable CRISIL believes FAMPL will continue to benefit from the promoter's extensive experience and established association with principal. The outlook may be revised to 'Positive' if the financial risk profile improves substantially due to higher-than- expected cash accrual, fresh infusion of funds by the promoters, and efficient working capital management. Conversely, the outlook may be revised to 'Negative' if the financial risk profile, particularly liquidity is constrained by low cash accrual, or large working capital requirements or any large debt-funded capital expenditure programme. FAMPL, incorporated in 2006 by Mr. Sandeep Bafna, is an authorised dealer of Eicher in Mumbai. FAMPL operates through its showroom and workshop in Mumbai. G. VENKATESHWAR: CRISIL Reaffirms 'B' Rating on INR5MM Cash Loan ---------------------------------------------------------------- CRISIL has reaffirmed its ratings on the bank facilities of G. Venkateshwar Reddy (GVR) at 'CRISIL B/Stable/CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 7 CRISIL A4 (Reaffirmed) Cash Credit 5 CRISIL B/Stable (Reaffirmed) The ratings continue to reflect the firm's modest scale of operations in the intensely competitive civil construction industry, and large working capital requirement. These weaknesses are partially offset by the extensive experience of its proprietor. CRISIL had, on December 19, 2016, downgraded its rating on GVR's long-term bank facility to 'CRISIL B/Stable' from 'CRISIL B+/Stable', and reaffirmed the short-term rating at 'CRISIL A4'. Key Rating Drivers & Detailed Description Weaknesses * Modest scale of operations in competitive segment With revenue of INR51.29 crore for fiscal 2016, scale remains small in the competitive civil construction segment that has large (Larsen & Toubro Ltd and Gammon India Ltd) and small players. Also, majority of revenue is tender-based, which exposes the firm to the ability to bid successfully. * Large working capital requirement Gross current assets were 106 days over the three years ended March 31, 2016. Strength * Extensive experience of proprietor Presence of about two decades in the civil construction industry has enabled the proprietor to establish strong relationship with clients, who are mostly government entities. Outlook: Stable CRISIL believes GVR will continue to benefit over the medium term from the extensive experience of its proprietor and established relationship with customers. The outlook may be revised to 'Positive' if geographical expansion, diversification of customer base, significant increase in revenue and profitability, and better working capital management lead to better liquidity. The outlook may be revised to 'Negative' if sharp decline in revenue and profitability, considerable delays in realisation of receivables, or larger-than-expected, debt-funded capital expenditure weakens financial risk profile, particularly liquidity. Set up as a proprietorship firm in 2002, GVR undertakes earthwork, canal lining, and civil construction projects for the irrigation department of Andhra Pradesh. Based in Warangal, the firm is registered as a special-class contractor with the state's irrigation & CAD department. GVR reported a profit after tax (PAT) of INR2.06 crore on net sales of INR51.29 crore for fiscal 2016, against INR3.21 crore and INR79.81 crore, respectively, for fiscal 2015. GURUKRUPA DEVELOPERS: ICRA Reaffirms B+ Rating on INR125cr Loan --------------------------------------------------------------- ICRA has re-affirmed the long-term rating of [ICRA]B+ outstanding on the INR125 crore of bank facilities of Gurukrupa Developers DN Nagar Project. The outlook on the long term rating is 'Stable'. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loans 125.00 [ICRA]B+ (stable) -reaffirmed Rationale The re-affirmation of the rating factors in the significant market risks for the firm with nearly 37% of the total saleable area under the Marina Enclave project tied up as on date, despite the advanced stages of the project. The sales velocity continues to remain low while there has been a decline in the average rate from ~INR10,500/sqft to INR10,300/sqft. The market risks are further accentuated by the impending supply in the project region as well as the subdued demand scenario. The profitability of the firm remains vulnerable to cyclicality inherent in the real- estate industry. While reaffirming the rating ICRA has taken note of the escalation in the project cost which has been funded through support from the promoter group. The committed cash flows from the project remain low when compared to the balance project cost as well as the impending debt servicing obligations. Thus going forward, timeliness of incremental bookings and collections from customers remains critical from a credit perspective. The rating, however, positively takes into account the long standing experience of the promoters in the real estate business. Further, the rating draws comfort from entire equity contribution being brought in by the partners, receipt of key approvals as well as healthy progress of execution on ground. Key rating drivers Credit Strengths * Longstanding experience of the promoters in the real estate business * Minimal approval risk with all the approvals for the development of phase 1 in place * Entire promoter contribution has been brought in as of September-2016 * Low execution risks given the advanced stages of the project and phase 1 of the project expected to be completed by March 2017 Credit Weakness * High market risk with 63% of the area yet to be tied up, despite the advanced stage of execution; stagnant price at ~ 10,300 per sqft for the past two years * High near term debt obligations over the near term, in relation to the committed receivables; the firm's ability to tie up the sales in timely manner while maintaining a healthy collection * Market risk further accentuated by the competition from a number of ongoing projects in the surrounding area coupled with the slowdown in the real estate industry Description of key rating drivers highlighted: ICRA notes the significant market risks for the firm with only 37% of the area booked till date despite the advanced stages of execution. ICRA has taken note of the promoter's experience in the real estate industry in Mumbai as well as receipt of all the key approvals and the advanced stages of execution for the project. The project loan is to be repaid through equal monthly instalments of INR2.98 crore for the next three years. Given the current low level of sales, the firm's ability to ensure timeliness of incremental sale tie-ups as well as collections from customers remains important to ensure timely repayment of debt obligations. The risks are further accentuated given the slowdown in real estate industry. Moreover the recent announcement by Government for ban of high denomination notes is expected to further stress the short-term cash inflows for the firm. Incorporated in 2004, Gurukrupa Developers DN Nagar Project (GD / the firm) is a partnership firm involved in real estate development in Mumbai, Maharashtra. The firm is a part of the Gurukrupa Group, which is involved in real estate development mainly in Mumbai, having developed 13.55 lakh square feet (sqft) of real estate space till date. The Group was promoted in 1994 by Mr. Mansukhbhai Kothari, Mr. Mansukhbhai Sureja and Mr. Chetan Patel. The firm is currently executing a residential real estate project in Mumbai, namely Marina Enclave, located at Malad (West). The firm has completed another residential-cum-commercial re-development project known as Shubh Residency, at Andheri (West) in FY2014. The company has not reached the revenue recognition threshold and hence no revenues and costs were recognized for FY2015 and FY2016 respectively. HAV MOTORS: CRISIL Reaffirms B+ Rating on INR7.0MM Loan ------------------------------------------------------- CRISIL has reaffirmed its rating on the long-term bank facilities of Hav Motors Pvt Ltd (HMPL) at 'CRISIL B+/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 4.75 CRISIL B+/Stable (Reaffirmed) Electronic Dealer Financing Scheme (e-DFS) 7.00 CRISIL B+/Stable (Reaffirmed) Term Loan 1.75 CRISIL B+/Stable (Reaffirmed) The rating continues to reflect early stages of operations and CRISIL's belief that the operations will scale up in fiscal 2017. On account of scale up of operations, and expected improvement in profitability, cash accrual is expected to increase. CRISIL believes the financial risk profile will improve over the medium term, but remain below average, with a small networth and subpar debt protection metrics. Key Rating Drivers & Detailed Description Weakness * Early stage of operations, along with exposure to intense competition: Operations commenced recently in November 2015. Out of the two showroom-cum-workshops in Patna (Bihar), one commenced operations while the other is yet to. The scale of operations is expected to remain small over the medium term owing to intense industry competition. * Below-average financial risk profile: Small networth of INR2.6 crore as on March 31, 2016, and low interest coverage ratio should keep the financial risk profile weak. Strengths * Promoter's entrepreneurial experience: The promoter, Mr. Harshendra Kumar, has been a dealer of Honda Siel Cars India since 2013. Within two years, he achieved deep business insights and acquired Mahindra & Mahindra Ltd (M&M) dealership. Outlook: Stable CRISIL believes HMPL will benefit over the medium term from its promoter's experience in the automobile dealership business. The outlook may be revised to 'Positive' in case of larger-than- expected improvement in revenue or cash accrual, or substantial capital infusion, strengthening the financial risk profile. Conversely, the outlook may be revised to 'Negative' in case of lower-than-expected scale up of operations and cash accrual, large working capital requirement, or significant, debt-funded capital expenditure, weakening the financial risk profile, particularly liquidity. Established in 2015, HMPL, promoted and managed by Mr. Harshendra Kumar, is the authorised dealer for M&M in Patna, Bihar. HYDROMATIK: ICRA Reaffirms B+ Rating on INR6.62cr LT Loan --------------------------------------------------------- ICRA has re-affirmed the long term rating of [ICRA]B+ to the INR8.62 crore fund based facilities of Hydromatik. ICRA has also reaffirmed the short term rating at [ICRA]A4 assigned to the INR2.00 crore short term fund based facility. The outlook of the long term rating is stable. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term scale- Fund based 6.62 [ICRA]B+ (Stable); reaffirmed Long term scale- Fund based 2.00 [ICRA]B+ (Stable); reaffirmed Short term scale- Fund based 2.00 [ICRA]A4; reaffirmed Rationale The reaffirmation of the rating continues to take into account Hydromatik's healthy levels of operating profitability over the years, extensive experience of the partners in the hydraulic tube fitting business and the established relationship of the entity with reputed customers. The ratings continue to derive comfort from the elongation of long-term debt maturity profile with revised debt repayment obligations up to FY 2022 as against FY 2019 earlier, thus reducing the pressure on the firm's cash flows in the short to medium term. The rating reaffirmation, however, is constrained by firm's small scale of operations in a highly competitive and fragmented industry limiting operational and financial flexibility to an extent. Further, the ratings are constrained by the stretched liquidity profile with high working capital intensity coupled with moderate capital structure and coverage indicators. The ratings are also constrained by the susceptibility of the earnings to raw material price fluctuations and the risks inherent in partnership firms including the risk of capital withdrawal, among others. Going forward, the firm's ability to scale up its operations while maintaining its profitability coupled with its ability to improve working capital management would remain the key rating sensitivities. Key rating drivers Credit Strengths * Long standing experience of the promoters in the hydraulic tube fitting business for more than 15 years * Diversified product profile finding application across multiple industries * Established relationship with reputed customers; repeated orders received from them over the years * Healthy operating profitability over the last few years Credit Weakness * Relatively small scale of operations in a competitive industry * High gearing and moderate coverage indicators * Margins vulnerable to exchange rate risk and raw material price variations with the absence of hedging mechanisms * Inherent risks involved with partnership firm, including the risk of capital withdrawal Description of key rating drivers highlighted: The firm has been involved in the manufacturing of pipe fittings for more than 15 years and has developed diversified product portfolio consisting of hydraulic tube fittings, adaptors, flanges, accessories, valves, couplings etc. The firm also manufactures custom designed products according to the requirements of the customers and the product portfolio of the company consists of more than 10,000 types of fittings. These products find application across various industries like agriculture, construction equipment (CE), power generation, steel mills, railways, shipbuilding, defense, aerospace, etc. The firm customer profile consists of reputed players like Bosch Rexroth (India) Limited, Putzmeister Concrete Machines Private Limited, World Wide Fittings, among others and has long term association with these customers due to which it obtains repeat orders and benefits in negotiations regarding raw material price fluctuations. The operating profitability of the firm has been healthy over the years, with operating margins over 16%. In FY 2016 the operating margins improved to 18.33% as compared to 16.39% in FY 2015. However, the scale of operations of the firm continues to be small. The gearing of the firm increased to 3.31 times as on March, 2016 owing to higher debtor levels and lower net worth. The primary raw materials required by the firm constitute of carbon steel, stainless steel and brass, accounting for more than 50% of the total cost of manufacturing. However, with the absence of price revision clause in the contracts with the customers, the margins of the firm remain vulnerable to any adverse movements in the price of the raw materials. Also, in FY 2016 the firm derived 25% of the total revenues from export sales. Owing to major contribution of exports in total revenue, and absence of any hedging contracts, the margins of the firm remain vulnerable to any adverse movements in exchange rates. Hydromatik is a partnership firm setup in 1999 and is engaged in the designing, engineering and manufacturing of hydraulic tube fittings. The company is involved in the manufacturing of pipe fittings of DIN 2353 safety specifications which are used in Machine Tool Manufacturing, Automobile Industries, Chemical Industries, Ship Building, Mining and Steel Plants, etc. The manufacturing unit of the firm is located in Belgaum, Karnataka. For FY 2016, the firm reported a net profit of INR0.32 crore on an operating income of INR16.33 crore. For FY 2017, the firm has registered an operating income of INR11.90 crore till November, 2016 (as per provisional results). INDIAN PROGRESSIVE: CRISIL Cuts Rating on INR20MM Overdraft to B+ ----------------------------------------------------------------- CRISIL has downgraded the ratings on the bank facilities of Indian Progressive Construction Pvt Ltd (IPCPL) to 'CRISIL B+/Stable/CRISIL A4' from 'CRISIL BB/Stable/CRISIL A4+'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 42.86 CRISIL A4 (Downgraded from 'CRISIL A4+') Overdraft 20.00 CRISIL B+/Stable (Downgraded from 'CRISIL BB/Stable') Term Loan 1.64 CRISIL B+/Stable (Downgraded from 'CRISIL BB/Stable') The ratings downgrade reflects deterioration in IPCPL's working capital cycle on account of stretch in debtor days leading to stretch in company's liquidity. The working capital cycle continued to remain stretched in October 2016 which led to over utilisation of overdraft account- the same was regularised in November 2016. Analytical Approach CRISIL has treated unsecured loans of INR2.9 crore from promoters as on March 31, 2016, as neither debt nor equity. This is because these loans are expected to remain in the business over the medium term. Key Rating Drivers & Detailed Description Weakness * Working capital-intensive operations: IPCPL has large working capital requirements, with gross current assets (GCAs) of 288 days as on March 31, 2016. The GCA days is high on account of high deposits. * Modest scale of operations and in intensely competitive infrastructure sector: Though IPCPL has been in the same line of business for the past 10 years, its scale of operation remains modest at INR68.2 crore for fiscal 2016. Modest scale prevents the company from achieving economies of scale * Exposure to project-concentration-related risks: IPCPL is mainly focused on the construction of roads in the state of Bihar and Jharkhand Strengths * Extensive experience of promoters in the infrastructure sector: IPCPL's promoters have extensive experience in the infrastructure sector spanning over 31 years. The promoters have been associated with entities in execution of infrastructure projects, and have a keen understanding of the sector * Above-average financial risk profile: The company's financial risk profile is marked by modest networth of INR 18.3 crore, moderate total outside liabilities to adjusted networth ratio of 1.9 times as on March 31, 2016 and average debt protection metrics as indicated by interest coverage ratio of 2.1 times for fiscal 2016. Outlook: Stable CRISIL believes IPCPL will continue to benefit over the medium term from its promoters' extensive industry experience and its healthy order book. The outlook may be revised to 'Positive' if the company's working capital cycle improves leading to improvement in liquidity or if it reports sustainable growth in its revenue and improvement in its margins. Conversely, the outlook may be revised to 'Negative' if IPCPL's revenues is significantly lower than expectation or if its financial risk profile, particularly its liquidity, deteriorates, most likely because of lengthening of its working capital cycle. IPCPL, incorporated in 2007, has its head office at Deoghar (Jharkhand). Mr. Jitesh Rajpal, Mr. Rajesh Kumar Singh, Mr. Sanjay Kumar Kunilwar, and Mr. Umesh Pandey are the promoters of the company. IPCPL primarily undertakes road construction projects, but also civil construction and irrigation projects, for government departments. IVRCL CHANDRAPUR: ICRA Reaffirms 'D' Rating on INR313.99cr Loan --------------------------------------------------------------- ICRA has re-affirmed the long-term rating to the INR313.99 crore term loans of IVRCL Chandrapur Tollways Limited (ICTL) at [ICRA]D. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loans 313.99 [ICRA]D; re-affirmed Rationale The re-affirmation of rating takes into account the continued delays in servicing its term loan obligations. The project execution got delayed by around three years - ICTL achieved COD on September 25, 2016 as against scheduled COD of September 25, 2013. The debt repayment commencement date has been accordingly revised to December 31, 2016. Further, the toll exemption on cars, small private vehicles and state transport buses on Maharashtra state highways will result in revenue loss for ICTL. The compensation towards the same is yet to be finalised. Going forward, ICTL's ability to service its debt obligations in a timely manner will be the key rating sensitivity. This apart, the ability of the company to get full and timely reimbursements from Government of Maharashtra for the revenue loss, trends in traffic growth rates and movement in WPI (for toll rate hike) will remain key rating sensitivities. Key rating drivers Credit strengths * Operational nature of the project eliminates construction risks * Healthy traffic potential for multi-axle vehicle segment as the project stretch caters to industrial and mining establishments Credit challenges * Recent delays in debt servicing * Revenue loss on account of exemption of toll on certain vehicle categories; ability of the company to get full and timely reimbursements from Government of Maharashtra remains critical * Prospects linked to GDP growth (due to the correlation of GDP growth with commercial traffic growth rates) and movement in WPI (for toll rate hike); any reduction in either of them will have an adverse impact on toll collections * Exposure to inherent risks in BOT (Toll) road projects including political acceptability of rate hikes linked to WPI over the concession period Description of key rating drivers highlighted: Although the operational nature of the project eliminates construction risks, the project remains exposed to risks inherent in BOT (Toll) road projects including risks arising from political acceptability of rate hikes linked to WPI over the concession period. Further, ability of the company to manage O&M and periodic maintenance costs within budgeted levels and get full and timely reimbursements from Government of Maharashtra for the revenue loss owing to toll exemption remains critical from credit perspective. Incorporated in October 2010, IVRCL Chandrapur Tollways Limited (ICTL) is a Special Purpose Vehicle (SPV) promoted by IVRCL Limited for four-laning and improvement of Karanji-Wani-Ghuggus- Chandrapur section of MSH- 6 & 7 of 85.11 km in Yavatmal and Chandrapur District of Maharashtra. The project is developed on Design, Build, Operate, Transfer basis. The project was earlier envisaged to have a capital outlay of INR735.99 crore. However, owing to delay in execution of the project the total cost has increased to INR882.48 crore, primarily on account of increase in interest during construction. The revised cost is funded with a debt of INR414.70 crore, positive grant of INR199.50 crore and promoter's contribution of INR268.28 crore. IVRCL is a Hyderabad based construction company having presence in major infrastructure segments including urban/rural water supply, irrigation & environment related projects, pipelines, power projects (substations and transmission & distribution Lines), buildings & industrial structures, roads & bridges. KUSHALAVA SPINNERS: CRISIL Assigns B- Rating to INR6.0MM LT Loan ---------------------------------------------------------------- CRISIL has assigned its 'CRISIL B-/Stable' rating to the long- term bank facilities of Kushalava Spinners & Ginners Private limited. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Fund- Based Bank Limits 1.15 CRISIL B-/Stable Cash Credit 2.85 CRISIL B-/Stable Long Term Loan 6.00 CRISIL B-/Stable The rating reflects the company's limited track record of operations, and its below-average financial risk profile because of high expected gearing, modest networth and debt protection metrics. The rating also factors vulnerability of the company's revenue and profitability to government policies and volatility in cotton prices. These weaknesses are partially offset by its promoters' extensive experience in the cotton ginning industry. Key Rating Drivers & Detailed Description Weaknesses * Limited track record of operations As operations commenced only in January 2016, the company is in its nascent stage of operation. Moreover, the successful track record of plant and profitability generated over the medium term will remain a key rating sensitivity factor. * Below-average financial risk profile Financial risk profile is below-average, on account of high gearing, negative net worth and weak debt protection metrics. KSGPL's has a negative net worth at INR21 lakhs as on March 31, 2016. The negative net worth is on account of operating losses due its initial years of operation. * Vulnerability of the company's revenue and profitability to government policies and volatility in cotton prices. For every crop year, the GoI fixes a minimum support price (MSP). When kapas (raw cotton) prices of any variety match the MSP, Cotton Corporation of India (CCI) and National Agricultural Co- operative Marketing Federation (NAFED), resort to immediate market intervention, and purchase kapas at MSP without any quantitative limits. Strength * Extensive experience of promoters and established position in the cotton industry The company is promoted by three promoters who have extensive experience in cotton ginning of around 10-15 years. The day-to- day operations are managed by Mr. Sadhu Siva Sankara Rao, Mr. V Srinivasa Rao and Mr. Majeti Sri Vasavi. Outlook: Stable CRISIL believes KSGPL will benefit from its management's extensive industry experience, its advantageous location, and successful stabilisation of operations. The outlook may be revised to 'Positive' if the company increases its revenue significantly, while sustaining its profitability and maintaining its capital structure. The outlook may be revised to 'Negative' if it undertakes larger-than-expected, debt-funded capital expenditure, or if its sales volumes and profitability decline sharply, weakening its financial risk profile and liquidity. KSGPL, incorporated in June 2014, gins and presses cotton. Based in Guntur, Andhra Pradesh, the company is promoted and managed by Mr. V Srinivasa Rao, Mr. Sadhu Siva Sankara Rao, and Mr. Majeti Sri Vasavi. The company started operations in January 2016. LOCKSMITHS INDUSTRIES: ICRA Reaffirms B- Rating on INR5.25cr Loan ----------------------------------------------------------------- ICRA has re-affirmed the long-term rating of [ICRA]B- assigned to the INR4.25 crore fund based limits of Locksmiths Industries Private Limited. ICRA has also re-affirmed the short-term rating of [ICRA]A4 to the INR5.25 crore non fund based limits of the LIPL. The outlook on the long term rating is 'Stable'. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Non-Fund Based Limits: LC 5.25 [ICRA]A4 re-affirmed Fund Based Limits: CC 4.25 [ICRA]B-(stable) re-affirmed Fund Based Limits: CC (sublimit of LC) (3.00) [ICRA]B-(stable) re-affirmed Rationale The reaffirmation of ratings continue to reflect the company's established track record of over two decades in manufacture of locking systems in luggage bags and the reputed customer profile comprising leading companies in the travel bags manufacturing segment. The ratings are however constrained by, LIPL's small scale of operation with de-growth in revenues in FY2016 due to decline in sales volumes on account of relatively low order inflow. The ratings also continue to factor in the company's weak financial profile characterised by modest accruals, leveraged capital structure and weak debt protection metrics. While the company's operating margin continue to remain healthy given the high value additive nature of combination lock manufacturing business, high borrowing cost has subdued the profitability at net level. Unfavourable foreign currency movement also pose a risk for the margin, given substantial imports. Further, the ratings continue to remain constrained by company's tight liquidity position driven by elongated receivables position and high inventory days. Going forward, the company's ability to reduce its working capital requirements, particularly in the receivables and inventory levels, while ramping up the scale of operations and improving the profit metrics will remain the key rating sensitivities. Key rating drivers Credit Strengths * Extensive experience of the promoters spanning two decades in the manufacturing of locking systems in luggage bags especially in combination locks * Reputed customer profile including leading companies in the travel bags manufacturing segment Credit Weakness * Small scale of operation; muted order inflow has led to decline in operating income in FY2016 * Weak financial profile characterised by low net profitability, modest accruals, high gearing level and weak debt protection metrics * Vulnerability of profitability to any adverse variations in raw material prices and foreign exchange rates * Stretched liquidity profile due to elongated receivable position and high inventory levels Description of key rating drivers highlighted: The promoters of Locksmiths Industries Private Limited have extensive experience in the manufacturing of locking systems especially combination locks for carry-bags, suitcases and trolleys. Combination locks manufactured by the company are Transportation Security Administration (TSA) certified. The company's clientele includes reputed players in baggage industry like Aristocrat, VIP Industries, Samsonite India, Alacmetal, Ideal Carlton, Safari, American Tourister etc. The company offers credit period to its customers of 90 days which usually get stretched to its limited bargaining power with its customers. Further, slow off takes and lower order inflow by its customers has also resulted in significant inventory holding in FY2016. This has led to a tight liquidity position. A major part of the company's raw material (steel and other lock components) requirements are imported from Chinese suppliers which are LC backed with a usance period of 180 days. This exposes the company's operation to vagaries of currency market. The risk is accentuated in absence of any firm forex risk hedging policy in place. In FY2016, the company's operating income witnessed year on year decline of ~11% to INR11.07 crore from INR9.28 crore in FY2015. This is attributable to muted order inflow and delayed off take from its key customers which led to decline in sales volumes. Over the years, high degree of customization of end product has enabled the company to maintain healthy operating margin. However, in FY2016, the company's net profitability continue remain subdued due to high borrowing cost and increased income tax payments. As on 31st March 2016, the company's capital structure is leveraged as depicted by a high gearing of 1.98 times though the gearing level has moderated from 2.06 times as 31st March 2015 on the on the back of moderate build-up in net-worth position. Modest accrual and high borrowing has kept coverage indicators weak as depicted by NCA/TD of 4.05% and an elevated TD/OPBDITA of 5.06 times as March 31, 2016. Analytical approach: To arrive at the ratings ICRA has taken into account the standalone financials of the company along with key operational developments in the recent past. The company operates as a standalone entity and doesn't have any subsidiary in place. Established in 1992, Locksmiths Industries Private Limited (LIPL) is promoted by Mr. Nimesh Kishore Sheth and his family members and is engaged in business of manufacturing and supplying of locking systems and hardware used in carry-bags, suitcases and trolleys. The company is also involved in trading of accessories used in office's furniture such as locks, drawers and slides. M-BO GRANITO: ICRA Assigns 'B' Rating to INR8.80cr Loan ------------------------------------------------------- ICRA has assigned a long-term rating of [ICRA]B and a short-term rating of [ICRA]A4 to the INR13.00 crore2 bank facilities of M-BO Granito LLP. The outlook on the long term rating is 'Stable'. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limits 8.80 [ICRA]B (Stable) Assigned Non Fund Based Limits 4.20 [ICRA]A4 Assigned Rationale The assigned ratings are constrained by the nascent stage of the firm's operations and the risk associated with stabilisation of the plant as per the expected operating parameters. The ratings also remain constrained by the highly fragmented nature of the tiles industry, resulting in intense competitive pressures; the cyclical nature of the real estate industry which is the main consuming sector; and the exposure of the firm's profitability to volatility in raw material and gas prices as well as to adverse foreign exchange fluctuations. Further, the assigned ratings take into account the firm's financial profile, which is expected to remain stretched in the near term given the debt-funded nature of the project and impending debt repayment. The assigned ratings, however, favourably factor in the experience of the promoters in the ceramic industry, the location advantage of the firm for raw material procurement by virtue of its presence in Wankaner (Gujarat) and the benefits derived from its group concerns in terms of marketing and distribution. Going forward, the timely commissioning of operations within the estimated cost will remain important from the credit perspective. The ability of the firm to establish a market for its products; scale up its operations in a profitable manner amidst intense competition and maintain a healthy financial risk profile will be some of the key rating sensitivities. Key rating drivers Credit Strengths * Extensive experience of the promoters in the ceramic industry * Proximity to raw material sources * Marketing and operational support from associate concerns Credit Weakness * Risks associated with stabilisation and successful scale up of operations as per expected operating parameters * Significant debt repayments coupled with long gestation period likely to keep the credit profile constrained over the near term * Competitive business environment given the fragmented nature of industry that has a large number of regional ceramic tile manufacturers * Profitability to remain susceptible to volatility in raw material and fuel prices Description of key rating drivers highlighted: MBGL proposes to manufacture medium and large sized glazed vitrified tiles. The unit has an estimated installed capacity of producing 1,30,500 metric tonnes of tiles per annum with an estimated project cost is INR53.60 crore. The commercial operations are estimated to commission in January end, 2017, earlier than the projected commissioning of April 2017. Nonetheless, project execution risks remain and timely commissioning of the project would remain important from a rating perspective. The aggressive D/E ratio for the project and significant debt repayments coupled with long gestation period is likely to keep the credit profile constrained over the near term. The ceramic industry is highly fragmented and the company's ability to compete with several other organised and unorganised players and maintain adequate profitability despite volatility in raw material and fuel prices remain the key rating sensitivities. Nevertheless, the extensive experiences of promoters vide their association with other ceramic units is expected to support the operations of the company. M-BO Granito LLP (MBGL), incorporated in June 2016, is setting up a greenfield project at Wankaner in Gujarat to manufacture medium and large sized glazed vitrified tiles of 600X600mm and 800X800mm. The unit has an estimated installed capacity of producing 1,30,500 metric tonnes of tiles per annum. The commercial operations are expected to commission in January end 2017, earlier than the estimated commencement in April 2017. The promoters have proven experience in the ceramic industry by virtue of their association with other ceramic units as partners or directors. MADHYARANGA ENERGY: ICRA Withdraws 'B' Rating on INR30cr Loan ------------------------------------------------------------- ICRA has withdrawn the long term rating of [ICRA]B assigned to the INR30.00 crore unallocated limits of Madhyaranga Energy Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Unallocated Limits 30.00 [ICRA]B Withdrawn The rating has been withdrawn as the company has not availed the limits. There is no amount outstanding against the rated instrument. MODTECH MATERIAL: Ind-Ra Assigns 'BB+' Long-Term Issuer Rating -------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Modtech Material Handling Projects Private Limited (MMHPPL) a Long-Term Issuer Rating of 'IND BB+'. The Outlook is Stable. KEY RATING DRIVERS The ratings reflect MMHPPL's small scale of operations, revenue exposure to capital investments in manufacturing industries and its susceptibility to the slowdown in sectors/industries such as cement, steel, power, mining, port and metal refining. In FY16, MMHPPL's reported revenue of INR160.14 million (FY15: INR167.93 million). However, the ratings benefit from MMHPPL's comfortable credit metrics and liquidity profile. Net leverage (total adjusted net debt/operating EBITDAR) was negative 0.01x in FY16 (FY15: 0.8x), net interest coverage (operating EBITDAR/net interest expense + rents) was 5.46x (10.92x) and EBITDA margin was 5.73% (4.29%). The company's average use of fund-based limits during the 12 months ended December 2016 was 60.47%. During FY16, MMHPPL reported positive cash flow from operations of INR9.19 million (FY15: INR0.83 million). The ratings are also supported by MMHPPL's promoters' experience of over 40 years in the material handling equipment/system business. RATING SENSITIVITIES Positive: A substantial growth in revenue, along with an improvement in the operating profitability, leading to an improvement in the credit metrics will be positive for the ratings. Negative: Any decline in revenue or operating profitability leading to deterioration in the credit metrics and/or elongation of the net working capital cycle will be negative for the ratings. COMPANY PROFILE MMHPPL was incorporated in 2006 by Mr. A.R. Singh and Mr. Sutikshan Lai. The company is engaged in designing, engineering, manufacturing and supply of bulk material handling equipment/system. It has two manufacturing units, one at Faridabad, Haryana and the other at Alwar, Rajasthan, with an installed fabrication capacity of 3,000MTPA. The units are fully equipped to manufacture pulleys, idlers, technological structures, gates and other material handling equipment. MMHPPL mainly caters to companies in the mining, cement, coal, power, fertilisers and metallurgy sector. NANDU CHEMICALS: CRISIL Assigns B Rating to INR6.44MM Term Loan --------------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the bank facilities of Nandu Chemicals Private Limited (NCPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 6.44 CRISIL B/Stable Overdraft 3.3 CRISIL A4 Proposed Long Term Bank Loan Facility 1.5 CRISIL B/Stable The ratings reflect the company's modest scale of operations, below-average financial risk profile marked by modest net worth, moderate gearing and debt-protection metrics, and working- capital-intensive operations. These weaknesses are partially offset by the extensive experience of the promoters in in the Active Pharmaceutical Industry (API), and the customer and geographical diversification in NCPL's revenue profile. Key Rating Drivers & Detailed Description Weaknesses * Modest scale of operations: The business risk profile of the company is constrained on account of modest scale of operations. Revenue remains modest, despite growing to INR9.5-10.0 crore in fiscal 2017 from INR7.64 crore the previous fiscal, backed by increase in capacity to 16 tonne per day from 8 tonne in the past. * Below-average financial risk profile: Financial risk profile remains below-average, with modest networth of INR5.25 crores and moderate gearing of 1.49 times as of March 2016. Debt protection metrics are average, marked by interest coverage of 1.71 times and net cash accrual to total debt of 0.07 time in fiscal 2016. * Working capital intensity in operations: Operations are working capital intensive, with sizeable gross current assets, inventory and debtors of 210, 100 and 90 days, respectively in fiscal 2016. Strengths * Promoter's extensive experience in the API industry: The promoter, Mr. Ramanandan Hegde, with his experience of more than three decades in manufacturing API, and keen grasp of industry dynamics, has helped expand capacity and scale of operations'revenue has grown at a compound annual rate of 28% in the past three years'maintain healthy relationships with established customers, and obtain approvals such as those from Food and Drug Administration (FDA) and Good Manufacturing Practices (GMP) for export to the regulated countries. * Customer and geographical diversification in revenue profile: NCPL caters to a wide customer base of around 20 clients in India and overseas. The company generates 95% of its revenue from domestic sales and the remainder from export to Egypt, Muscat, South Africa, Malaysia and Iran. Outlook: Stable CRISIL believes NCPL will continue to benefit from its diversified customer and geographic profiles and the promoter's extensive experience. The outlook may be revised to 'Positive' if substantial ramp-up in revenue, profitability and accrual, and efficient working capital management strengthens financial risk profile. Conversely, the outlook may be revised to 'Negative' if decline in profitability and accrual, stretch in working capital cycle, or any large capital expenditure weakens financial risk profile. NCPL manufactures active pharmaceutical ingredients (API's), which find application in the manufacture of medicines, food & beverages, confectioneries and laboratory chemicals. The company currently has a production capacity of 16 tonne per day. Based out of Hubli (Karnataka), the company was incorporated in 1986 by Mr. Ramanandan Hegde. NATURAL AGRITECH: Ind-Ra Assigns 'B-' Long-Term Issuer Rating ------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Natural Agritech Private Limited (NAPL) a Long-Term Issuer Rating of 'IND B-'. The Outlook is Stable. KEY RATING DRIVERS The ratings reflect NAPL's nascent stage of operations, which started in February 2015, and weak credit metrics. In FY16, revenue was INR26 million while EBITDA interest coverage and net leverage were negative on account of a negative EBITDA. However, Ind-Ra expects an improvement in NAPL's scale of operations by FYE17 on the back of steady revenue growth owing to an improvement in sales volume as well as marginal improvements in the credit metrics on the back of scheduled repayments. The ratings are constrained by the company's presence in the highly fragmented and competitive rice milling business, raw material price fluctuations, and the seasonal nature of availability of paddy. Also, liquidity has been tight with the company's average maximum utilization of the fund-based limits being 97% for the 12 months ended December 2016. The ratings, however, are supported by the promoters' close to a decade-long experience in the rice industry along with the company's locational advantage owing to its proximity to paddy growing regions. RATING SENSITIVITIES Positive: A positive rating action could result from a substantial increase in the scale of operations along with a sustained improvement in the overall credit metrics. COMPANY PROFILE Incorporated in 2014 by Krishna Kumar Modi, Sangita Agarwal, Harish Saraogi and Sourav Saraogi, NAPL is engaged in the production and milling of rice. The company has a 160MT per day manufacturing facility in Dhenkanal, Orissa. The company mainly sells its products under the brand names Babaji and Shivam Gold. OME SREE: Ind-Ra Assigns 'D' Long-Term Issuer Rating ---------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Ome Sree Sai Ganesh Poultries a Long-Term Issuer Rating of 'IND D'. KEY RATING DRIVERS The ratings reflect the instances of delays of up to 89 days in servicing of term loans by Ome during the three months ended October 2016, due to its stressed liquidity position. RATING SENSITIVITIES Positive: The rating could be upgraded if the loan's interest and principal obligations are serviced in a timely manner for at least one quarter. COMPANY PROFILE Ome is a partnership firm established in 2015 and proposes to establish a poultry farm in the west Godavari District of Andhra Pradesh with a capacity of 100,000 layer birds. OPAL LUXURY: CRISIL Assigns 'D' Rating to INR8MM Cash Loan ---------------------------------------------------------- CRISIL has assigned its 'CRISIL D/CRISIL D' ratings to the bank facilities of Opal Luxury Time Products Limited (Opal). The ratings factor in delays in servicing the debt obligations because of weak liquidity driven by elongated working capital cycle. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Letter of Credit 5 CRISIL D Bank Guarantee 1 CRISIL D Cash Credit 8 CRISIL D Opal has elongated working capital cycle because of its large inventory and receivables. The company receives limited open credit and majority of its procurement is against LCs. Because of elongated operating cycle, the liquidity remain stretched. Key Rating Drivers & Detailed Description Weaknesses * Weak financial risk profile and liquidity: Opal's working capital cycle is stretched due to large inventory of over 120 days and receivables cycle of about 130 days. Against this, the company receives limited open credit from suppliers and majority of its procurement is against letter of credits (LCs). This resulted in full utilisation of fund-based bank lines and LCs remaining unpaid beyond 30 days, thereby weakening liquidity and hence the financial risk profile. * Modest scale of operations despite large capital expenditure (capex): Large capex was incurred during 2013 to 2015 for new dyes and moulds to have in-house capacity for parts and to enhance indigenisation. Despite the large capex, revenue remained stable at INR25-27 crore over the three years through fiscal 2016, reflecting modest scale of operations. Quick stabilisation and ramp up from the new capacities remains a key monitorable. Strengths * Promoters' extensive experience: Opal is promoted by Mr. Subhash Gujar and his family members. Gujar family has over two decades of experience in the clock industry. The promoters leveraged their industry experience and forayed into premium wall clock manufacturing. The promoters' experience also helps Opal to launch new products regularly and maintain established clientele through various sales channels. * Established market position in premium wall clock segment: Opal has an established market position in the premium wall clock segment in India, backed by longstanding presence, variety of products, PAN-India presence and brand recall. Pune-based, Opal was incorporated in 2007 as a private limited company and was subsequently reconstituted under its current name. The company got publicly listed in NSE- SME in fiscal 2013. The business was earlier carried under a partnership firm- Opal Industries, established in 1996. Opal manufactures a variety of premium wall clocks under its registered brands, Opal and Caliber. Opal reported a profit after tax (PAT) of INR10 lakhs on net sales of INR26.93 Crores for fiscal 2016, vis-a -vis INR54 lakhs and INR25.81 Crores, respectively for fiscal 2015. Status of non-cooperation with previous CRA: Opal has not cooperated with Credit Analysis and Research Ltd, which has suspended its rating vide release dated April 05, 2016. The reason provided by CARE is non-furnishing of information required for monitoring of ratings. PARAS FOODS: CRISIL Lowers Rating on INR5MM Cash Loan to 'D' ------------------------------------------------------------ CRISIL has downgraded its rating on the long-term bank facilities of Paras Foods (PF) to 'CRISIL D' from 'CRISIL B+/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 5 CRISIL D (Downgraded from 'CRISIL B+/Stable') Term Loan 4 CRISIL D (Downgraded from 'CRISIL B+/Stable') The rating downgrade reflects the weak liquidity as there have been instances of delays in servicing its term loans. Moreover, working capital limits remained overdrawn for over 30 days on account of stretched liquidity, owing to stretched receivables. Key Rating Drivers & Detailed Description Weaknesses * Large working capital requirement leading to weak liquidity as reflected from delays in debt servicing: Working capital cycle has stretched on account of delayed receivables as reflected in receivable days of 176 as on March 31, 2016, as against 66 days a year ago and increase in gross current assets to 207 days as on March 31, 2016, from 93 days a year ago. Owing to stretch in working capital management, there have been instance of delays in debt servicing. * Below-average financial risk profile: The financial risk profile is below average, as reflected in a modest networth of INR9.0 crore and total outside liabilities to adjusted networth ratio of 3.38 times as on March 31, 2016. * Susceptibility to volatility in prices of traded goods and customer concentration: PF derives 50-55% of its revenue from a single customer, exposing the firm to risks pertaining to concentration in revenue profile. Moreover, fixed-price contracts with the customer expose margins to fluctuation in the prices of the traded commodities. Strength * Extensive experience of partners in the agricultural products trading business: Partners have extensive experience, given their established customer and supplier relations. Established in 2003 as a partnership between Mr. Ujwal Pagariya, Mr. Ulhas Pagaria, and Mr. Umesh Pagaria, PF, based in Nagpur (Maharashtra) is a wholesale trader of agricultural products. PF reported a profit after tax of INR1.6 crore on an operating income of INR29.2 crore for fiscal 2016, vis-a -vis INR2.4 crore and INR53.0 crore, respectively for fiscal 2015. For the seven months through October 2016, it reported net sales of INR32 crore PCI LIMITED: CRISIL Reaffirms 'D' Rating on INR100MM Loan --------------------------------------------------------- CRISIL has reaffirmed its ratings on the bank facilities of PCI Limited (part of the Prime group) at 'CRISIL D/CRISIL D'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 55 CRISIL D (Reaffirmed) Letter of credit & Bank Guarantee 100 CRISIL D (Reaffirmed) Rupee Term Loan 46.4 CRISIL D (Reaffirmed) CRISIL's ratings on the bank facilities of the Prime group continue to reflect instances of delay in servicing debt due to stretched liquidity, driven by delay in receipts from customers. Analytical Approach For arriving at the ratings, CRISIL has combined the business and financial risk profiles of PCI and its fully owned subsidiaries- PCI Middle East FZE, PCI Europe GmbH, and PCI Asia Pacific Pvt Ltd. This is because all these entities, collectively referred to as the Prime group, have common promoters, the same marketing network, and strong business and financial linkages with each other. CRISIL has not combined Prime Hi-tech Engineering Ltd (PHEL) although the company is a 51% subsidiary of PCI, because of management's stance that PCI and PHEL do not provide any financial support to each other. The two companies operate at arm's length. Key Rating Drivers & Detailed Description Weakness * Weak financial risk profile This is driven by a high total outside liabilities to tangible networth ratio and weak debt protection metrics on account of loss-making operations. CRISIL believes that the financial risk profile will remain weak over the medium term owing to losses leading to high dependency on bank borrowings. * Large working capital requirement This is primarily because of a longer cycle for collection from the power sector utilities and equipment manufacturers, and high stocking requirement owing to import of critical components. Though part of the working requirement is met by negotiating with suppliers for longer credit periods, CRISIL believes the working capital requirements will continue to remain dependent on external debt over the medium term. Strengths * Benefits from demonstrated ability to service a diversified and reputed clientele, and an established market position in the power equipment segment The Prime group offers a wide range of equipment and services catering to power and telecom sectors mainly. Also, it has an established market position in specific testing equipment used in power installations and the electricity transmission and distribution industry. Strong operational capabilities, acquired through a longstanding presence in the power testing and equipment sector coupled with product diversification, should enhance competitive strengths. PCI, set up in 1986 by Mr. Surinder Mehta, is the flagship company of the Prime group. It provides technology-related solutions to various industries, especially the power sector. Its activities include marketing, distribution, and after-sales service support for power testing, maintenance, and conditioning equipment, and machine tools. Furthermore, it owns three windmills with combined capacity of 4.5 megawatt in Kutch, Gujarat. PHALANX LABS: CRISIL Reaffirms B- Rating on INR31.5MM LT Loan ------------------------------------------------------------- CRISIL has reaffirmed its 'CRISIL B-/Stable/CRISIL A4' ratings to the INR42 crore bank facilities of Phalanx Labs Private Limited. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 7.5 CRISIL B-/Stable (Reaffirmed) Letter of credit & Bank Guarantee 2.5 CRISIL A4 (Reaffirmed) Long Term Loan 31.5 CRISIL B-/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 0.5 CRISIL B-/Stable (Reaffirmed) The ratings reflect the company's below-average financial risk profile because of small networth, high gearing, weak debt protection metrics, and stretched liquidity, and modest scale of operations in the intensely competitive bulk drug and intermediaries' industry. These weaknesses are partially offset by the extensive experience of promoters and established customer relationship. Key Rating Drivers & Detailed Description Weaknesses * Stretched liquidity Cash accrual is barely sufficient to meet debt obligation. Also, bank limit of INR7.5 crore was utilised by 97% in the 8 months ended November 2016. However, liquidity is supported by unsecured loans from promoters. * Modest scale of operations With revenue of INR19 crore for fiscal 2016, scale remains small in the competitive bulk drug intermediaries industry that has limited value addition, leading to a low operating margin of 0.2%. * Below-average financial risk profile: Networth was modest at INR18 crore and gearing high at 2.6 times as on March 31, 2016 and weak debt protection metrics. Strength * Extensive experience of promoters and established customer base: Presence of over a decade in the bulk drugs segment has enabled the promoters to establish strong relationship with customers and suppliers. Outlook: Stable CRISIL believes Phalanx will continue to benefit over the medium term from the extensive experience of its promoters. The outlook may be revised to 'Positive' in case of a substantial and sustained increase in profitability, or steady improvement in working capital management. The outlook may be revised to 'Negative' if profitability declines, or capital structure deteriorates due to stretch in working capital cycle. Set up in 2011 in Hyderabad by Mr. Avirneni Sri Rama Krishna and his family members, Phalanx manufactures bulk drug intermediaries. PRAKASAM ENTERPRISES: CRISIL Reaffirms B+ Rating on INR10MM Loan ---------------------------------------------------------------- CRISIL has reaffirmed its 'CRISIL B+/Stable' rating to the long- term bank loan facilities of Prakasam Enterprises (PE). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 10 CRISIL B+/Stable (Reaffirmed) The rating continues to reflect the firm's modest scale- and working-capital-intensive nature- of operations, and its exposure to intense competition in the tobacco business. The rating also factors in a below-average financial risk profile because of a high total outside liabilities to adjusted net worth ratio (TOLANW) and modest interest coverage ratio. These rating weaknesses are partially offset by the benefits that PE derives from its partners' extensive experience in the tobacco processing business and its established relationships with key customers and suppliers. Analytical Approach CRISIL has treated the unsecured loans from partners as neither debt nor equity as these have no fixed repayment schedule, are non-interest bearing and are expected to remain in the business over the medium term. Key Rating Drivers & Detailed Description Weaknesses * Modest scale of operations in highly fragmented tobacco industry: PE's scale of operations are modest, as indicated by its revenues of INR35.4 crores during 2015-16 (refers to financial year, April 1 to March 31). The firm's small scale of operations prevents it from deriving benefits arising from economies of scale and makes it susceptible to intense competition from large established players. Scale of operations is expected to remain modest despite moderate growth expected over the medium term. * Below-average financial risk profile: PE has below-average financial risk profile marked by high total outside liabilities to adjusted net worth ratio (TOLANW) of 2.89 times and modest interest coverage ratio of 1.25 times as on March, 2016. This is due to its low operating profitability (trading nature of business) and higher debt contracted to meet its working capital requirements. Strength * Partners' extensive experience in the tobacco processing business and its established relationships with key customers and suppliers. The firm is promoted by Mrs. Ravuri Suseela and Mr. Ravuri Ayyavaraiah, having three decades of experience in various agro industries like Cotton, rice and tobacco. Over the years they have developed strong relationships with major suppliers and customers. The firm would continue to be benefitted from the extensive experience of the partners and its established relation with customers and suppliers in tobacco industry. Outlook: Stable CRISIL believes PE will continue to benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' in case of a sustainable increase in revenue and profitability, resulting in an improvement in the financial risk profile. Conversely, the outlook may be revised to 'Negative' if revenue and profitability decline, or if there is any large debt-funded capital expenditure, leading to deterioration in the financial risk profile. Set up as a partnership concern by Mrs. Ravuri Suseela and family in 2005, PE processes and sells flue-cured Virginia tobacco, which is used mainly in the manufacture of cigarettes, and pipe and chewing tobacco. The firm is based in Tanguturu, Prakasam District (Andhra Pradesh). PE reported a profit after tax (PAT) of INR0.2 crores on net sales of INR35.4 crores for 2015-16 (refers to financial year, April 1 to March 31) against PAT of INR0.1 crores on net sales of INR24.5 crores for 2014-15. PRIME LEATHERS: CRISIL Lowers Rating on INR6MM Cash Loan to B+ -------------------------------------------------------------- CRISIL has downgraded its ratings on the bank facilities of Prime Leathers (PL) to 'CRISIL B+/Stable/CRISIL A4' from 'CRISIL BB- /Stable/CRISIL A4+.' Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 6 CRISIL B+/Stable (Downgraded from 'CRISIL BB-/Stable') Proposed Short Term 4 CRISIL A4 (Downgraded from Bank Loan Facility 'CRISIL A4+') The downgrade reflects significant stretch in PL's working capital cycle, and therefore, constrained financial flexibility. Inventory increased to 244 days as on March 31, 2016, from 110 days a year ago, due to pile-up of raw material, wet blue. The increase in inventory was funded largely by stretching payables thus far. The sizeable inventory not only weakens financial flexibility but also renders the profitability vulnerable to adverse movements in the prices of goods. Inventory may, however, reduce to 180-200 days over the medium term, depending on trends in leather prices. Key Rating Drivers & Detailed Description Weaknesses * Large working capital requirements: Working capital intensity is likely to remain high because of long process time, and sizeable stock of raw material usually maintained. Gross current assets were 379 days as on March 31, 2016; this is however, partly met by credit of 150-180 days availed of from suppliers. * Modest scale of operations and intense competition: Scale of operations (revenue was INR20.59 crore in fiscal 2016) is likely to remain modest, constrained by intense competition in the leather industry. Exposure to customer concentration risks may also persist over the medium term. Strengths * Extensive experience of the promoters in the leather industry: Benefits from the promoters' extensive experience in the leather processing industry, and their healthy relationships with customers and suppliers should continue to support business risk profile. * Moderate financial risk profile: Despite low networth, financial risk profile is expected to remain moderate, backed by healthy total outside liabilities to adjustable networth and interest coverage ratios, stable profitability and working capital cycle, and absence of large capital expenditure plans. Outlook: Stable CRISIL believes PL will continue to benefit over the medium term from the promoters' extensive experience and healthy relationships with key customers. The outlook may be revised to 'Positive' if ramp-up in scale of operations, profitability, and accrual, or efficient management of working capital cycle strengthens credit metrics. Conversely, the outlook may be revised to 'Negative' if decline in operating margin or any large debt-funded capital expenditure weakens financial risk profile. Set up in 1998 as a partnership firm, PL processes semi-finished leather into high-end premium leather. The firm has its processing unit in Jalandhar (Punjab); it mainly caters to the leather garments, accessories, and footwear industry. PUNEET AUTOMOBILES: Ind-Ra Affirms 'BB' Long-Term Issuer Rating --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed Puneet Automobiles Private Limited's (PAPL) Long-Term Issuer Rating at 'IND BB'. The Outlook is Stable. KEY RATING DRIVERS The affirmation reflects PAPL's continued moderate profitability and weak credit metrics due to the trading nature of its business. EBITDA margins fell 3.56% in FY16 (FY15: 4.38%, FY14: 4.15%) because of increased administrative and personnel expenses as the company opened five new branches. Consequently, financial leverage (adjusted debt/operating EBITDAR) increased to 6.47x (6.32x and 6.43x) while interest coverage (operating EBITDA/gross interest expense) was stable 1.55x (1.53x, 1.47x). Moreover, PAPL's liquidity is stressed as evident from its almost full utilization of the fund-based limits during the 12 months ended December 2016. Also, the working capital cycle remains long, despite improving to 71 days in FY16 from 81 days in FY15. The ratings, however, are supported by the company's large scale of operations with revenue of INR2,416.21 million in FY16 (FY15: INR1,638.93 million and FY14: INR1,558.43 million). The ratings are further supported by over 30 years of experience of PAPL's promoters in the auto dealership business coupled with the company's established presence as Tata Motors Limited's authorized dealer in Varanasi. RATING SENSITIVITIES Negative: A further decline in the EBITDA margins leading to further deterioration in the credit metrics could lead to a negative rating action. Positive: Sustained revenue growth along with improvement in the credit metrics could lead to a positive rating action. COMPANY PROFILE PAPL was incorporated in 2002 by Prabhat Mishra, Harish Mishra and Subash Mishra. PAPL is an authorised 3S dealer of Tata Motors. The company operates out of Varanasi. R.P. STEEL: ICRA Hikes Rating on INR10cr Fund Based Loan From B --------------------------------------------------------------- ICRA has upgraded the long-term rating to [ICRA]BB- from [ICRA]B for the INR10.00-crore cash credit facility of R.P. Steel Tubes. The outlook on the long-term rating is 'Stable'. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limits 10.00 Upgraded from [ICRA]B to [ICRA]BB- (Stable) Rationale ICRA's rating upgrade takes into account the group's healthy business risk profile with presence across value chain in steel sector as well as improvement in group's financial risk profile in FY 2016 as reflected by increase in the operating income and net profits of the group in FY2016 leading to improved cash accruals. ICRA's ratings continue to take into consideration the fragmented and competitive nature of steel industry on account of low technological complexity of manufacturing process and vulnerability to variation in the prices of raw materials and fluctuations in foreign exchange rate. ICRA also takes note of low profitability, adverse capital structure and high working capital intensity of operations. ICRA has also taken cognizance of the partnership constitution of the firm, which exposes it to risks of dissolution, withdrawal of capital etc. However, the ratings derive comfort from the group's forward integration of operations with the setting up of rolling mill and pipe manufacturing unit in R.P. Multimetals Private Limited (RMPL) and RST, which has resulted in improved scale of operations, better realisations and improved profitability. The ratings continue to favourably factor in entity's location advantage, which is in close proximity to its suppliers, customers and its experienced promoters having a long track record in the steel industry. The rating also draws comfort from the improved scale of operations and the group's established relationship with its customers, enabling it to secure repeat orders from them. Going forward, the group's ability to improve its scale of operations in a profitable manner, while improving its capital structure and maintaining an optimal working capital intensity, will remain the key rating sensitivities. Key rating drivers Credit Strengths * Experienced promoters with long track record of operations in the steel industry * Location advantage, the company is situated in Mandi Gobindgarh, Punjab, the steel product manufacturing belt of India * Established relationship with key customers (distributors and retailers) enables the firm to secure repeat orders from them * Forward integration into manufacturing of ERW Pipes has improved the top line and margin of the entity Credit Weakness * Weak debt protection indicators due to low profitability and high debt * Fragmented and competitive industry on account of low technological complexity of manufacturing process and low capital requirements * Exposure to price risk as inventory procurement is not always order backed * Exposure to forex risk with significant raw material imports; the company does not hedge its position with currency forwards/futures Description of key rating drivers highlighted: The group as a whole has expanded its scope of work as they have started manufacturing value added products such as HR coils from billets/blooms/ingots as a rolling mill has been set up. Further, it has also set up facilities for manufacturing of ERW pipes and has been continually adding to its capacity in order to accommodate the increasing order book size. The capacity utilisation remained low over the past few years but has been on an improving trend. The average realisation has also been fluctuating over the years. It increased in FY2015 with the addition of value-added products such as HR Coils and ERW pipes. However, the overall slowdown in the steel market again pulled down the realisation to ~32000 per MT in FY2016. The production is partly order backed and the capacity utilisation varies with the order flow. Furthermore, as most of the working capital requirement is funded through bank borrowings, the capital structure of the group remains leveraged with modest coverage indicators. RST remains exposed to raw material price fluctuation due to the lag in transferring the RM price variations to the end consumer. The lag is due to the inventories maintained by these companies to fulfill orders in a timely manner and maintain order flow for manufacturing ingots and billets/blooms in various dimensions/thickness in order to gain competitive advantage. The final profitability is mainly dictated by the ability of the company to anticipate and protect itself against adverse RM price variations. Analytical approach: For the purpose of arriving at the ratings, ICRA has consolidated the operational and financial risk profiles of R.P. Multimetals Private Limited (RMPL), R.P. Steel Tubes (RST) and Narain & Co. (NC) as all these companies share significant operational, managerial and financial synergies among them. Incorporated in the year 2008, RST is a partnership firm and manufactures M.S (Mild Steel) Bars and Flats. The manufacturing facility of the firm is in Mandi Gobindgarh and has a capacity of producing 33,000MT per annum. In FY2015, the firm set up new facility, which has an installed capacity of producing 15,000 MT of ERW pipes per annum. RST recorded a net profit of INR0.19 crore on an operating income of INR60.94 crore in FY2016 as against a net profit of INR0.19 crore on an operating income of INR77.13 crore in the previous year. R.P. Multimetals Private Limited - RMPL was established in 1999 and manufactures steel billets and blooms and steel coils/flats at its facility in Gobindhgarh, Punjab (installed capacity of 66,600 MT per annum). The major raw materials used by the company are ferro alloys and scrap metal, which are mainly imported. The steel products manufactured by the company are supplied to the steel rolling mills in Mandi Gobindgarh. In FY2015, the company set up a facility for manufacturing flats/coils from the billets and ERW pipes. Narain & Company - Narain & Co. trades in iron and steel products such as angles, billets, beam, channel, bloom, and billet. NC is a distributor of Rashtriya Ispat Nigam Limited (RINL) in northern India. In addition to RINL, the company procures products from various rolling mills and distributors in Mandi Gobindgarh based on its requirement, before selling them to auto parts manufacturers and exporters. Around 80% of the total sales are made to northern India and some quantities are also sold to eastern and southern India. RAJESH SPICES: CRISIL Assigns 'B' Rating to INR5MM Cash Loan ------------------------------------------------------------ CRISL has assigned its 'CRISIL B/Stable' rating to the long-term bank facility of Rajesh Spices (RS). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 5 CRISIL B/Stable The rating reflects small scale of operations and weak financial risk profile constrained by highly a leveraged capital structure and weak debt protection measures. These weaknesses are partially offset by the extensive experience of partners. Key Rating Drivers & Detailed Description Weaknesses * Small scale of operations: INRbooked sales of INR16 crores in fiscal 2016. Having realised INR16 crores till December 31, 2016, in fiscal 2017, revenue is expected to improve, but will remain small. * Weak financial risk profile: The financial risk profile is subdued as reflected in small net worth of INR0.91 crores, gearing of 5.62 times as on March 31, 2016 and weak debt protection metrics with interest coverage ratio of 1.22 times and negative net cash accruals to total debt in fiscal 2016. The net worth is expected to remain modest due to expected low accretion to reserves, capital structure is expected to remain highly leveraged and debt protection metrics weak. Strength * Extensive experience of partners in the agro-commodity industry: The partners, given their experience of over seven decades, have forged strong relationships with suppliers and customers which should continue to benefit the business risk profile. Outlook: Stable CRISIL believes INRwill continue to benefit over the medium term from the partners' extensive experience. The outlook may be revised to 'Positive' if considerable ramp-up in the scale of operations leads to higher net cash accrual or significant equity infusion results in better capital structure, strengthening the financial risk profile. The outlook may be revised to 'Negative' if any steep decline in scale of operations or profitability, deterioration in working capital management, or any large capital expenditure leads to deterioration in the financial risk profile, especially liquidity. Established in 1982 as a partnership firm by the Wadhwani family of Nagpur (Maharashtra), INRprocesses and trades in spices. It sells under its own brands Kasturi and Gulab. RICHI TRAVELS: CRISIL Reaffirms B+ Rating on INR5.0MM Cash Loan --------------------------------------------------------------- CRISIL has reaffirmed its ratings on the bank facilities of Richi Travels (RTV) at 'CRISIL B+/Stable/CRISIL A4'. Revenue is expected to grow at 5-10% annually over the medium term, following a decline of around 25% in fiscal 2016. Operating margin is expected at 40-45%. Liquidity continues to be adequate, supported by moderate bank limit utilisation (at 70% in the 12 months through September 2016), sufficient accrual, and healthy unencumbered cash balance and need-based funding support. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 1.38 CRISIL A4 (Reaffirmed) Cash Credit 5.00 CRISIL B+/Stable (Reaffirmed) Key Rating Drivers & Detailed Description Weaknesses * Below-average financial risk profile: Despite healthy return on capital employed, financial risk profile remains below-average, with high total outside liabilities to tangible net worth (TOLTNW) ratio and weak debt protection metrics. * Small scale of operations and intense competition: Due to limited fixed asset requirements and technology barriers, the travel and tourism industry is intensely competitive; this should, in turn, continue to constrain scalability in operations for RTV. Strength * Extensive experience of the promoters: Benefits from the promoters' experience of over a decade in the air-ticket booking business, and strong relationships with customers and airlines across the world should continue to support business risk profile. Outlook: Stable CRISIL believes RTV will continue to benefit over the medium term from its promoters' extensive experience. The outlook may be revised to 'Positive' if the firm generates substantial cash accruals while prudently managing its working capital requirements. Conversely, the outlook may be revised to 'Negative' if liquidity weakens significantly, most likely on account of stretch in working capital cycle, or if businesses risk profile declines owing to lower sales or profitability. RTV, set up in 2002, provides air ticketing services. It is an approved Travel Agents Association of India and Travel Agents Federation of India agent. The firm, promoted by Mr. Satpal Singh Multani, is based in Jalandhar (Punjab). SABARI TEXTILES: ICRA Reaffirms 'D' Rating on INR12.47cr Loan ------------------------------------------------------------- ICRA has reaffirmed the long term rating assigned to the INR12.47 crore term loan facilities, INR3.83 crore fund based limits of Sabari Textiles Private Limited at [ICRA]D. ICRA has also reaffirmed the short term rating assigned to the INR0.70 crore non fund based facilities of STPL at [ICRA]D. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loan 12.47 Reaffirmed at [ICRA]D Fund Based Limits 3.83 Reaffirmed at [ICRA]D Non-Fund Based Limits 0.70 Reaffirmed at [ICRA]D The rating action is based on the best available information. As part of its process and in accordance with its rating agreement with STPL, ICRA has been trying to seek information from the company so as to undertake a surveillance of the ratings, but despite repeated requests by ICRA, the company's management has remained non-cooperative. In the absence of requisite information, ICRA's Rating Committee has taken a rating view based on best available information. In line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated Nov. 1, 2016, the company's rating is now denoted as: "[ICRA]D ISSUER NOT COOPERATING". The lenders, investors and other market participants may exercise appropriate caution while using this rating, given that it is based on limited or no updated information on the company's performance since the time it was last rated. STPL, incorporated in November 2006, has its manufacturing facilities located in Coimbatore (Tamil Nadu). The Company is engaged in manufacturing of blended yarn in its unit located in the Coimbatore district. In 2013-14, the Company also commenced manufacturing of cotton yarn through a leased unit located in Coimbatore. Owing to large volatility in the cotton yarn prices, the Company shifted its product profile to blended yarn in its leased unit in the current fiscal. STPL manufactures polyester cotton blended yarn in the count range of 40s to 60s. The Company has a total capacity of 22,416 spindles. The Company's leased unit has a capacity of 12,096 spindles. SAHAJ FASHIONS: CRISIL Hikes Rating on INR17MM Cash Loan to BB- --------------------------------------------------------------- CRISIL has upgraded its rating on the long-term bank facilities of Sahaj Fashions Private Limited (SFPL) to 'CRISIL BB-/Stable' from 'CRISIL B+/Stable' while assigning 'CRISIL A4+' to short- term bank facility. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 0.3 CRISIL A4+ (Reassigned) Cash Credit 17.0 CRISIL BB-/Stable (Upgraded from 'CRISIL B+/Stable') Proposed Long Term 2.82 CRISIL BB-/Stable (Upgraded Bank Loan Facility from 'CRISIL B+/Stable') The upgrade reflects CRISIL's belief that SFPL's business risk profile will continue to improve over the medium term. In fiscal 2016, operating income was INR63 crore, more than CRISIL's expectation of INR55 crore on account of higher capacity utlization. This further led to improved operating margin at 10.4% in fiscal 2016, against CRISIL's expectation of 9.5%. For fiscal 2017, the operating income is expected to reach INR 80 crore and margins to be sustained at 10.4%. Analytical Approach CRISIL has treated the unsecured loan of INR1.9 crore extended to SFPL by its promoters as on March 31, 2016, as neither debt nor equity as the loan is subordinated to bank debt and will remain in the business over the medium term. Key Rating Drivers & Detailed Description Strengths * Extensive experience of promoters in the textile industry: SFPL's promoters have experience of over two decades in the textile industry. * Increasing scale of operations: Operating income increased to INR63 crore in fiscal 2016 from INR38 crore in the previous fiscal. * Funding support from promoters: Promoters have extended unsecured loan and infused equity to support liquidity. Weaknesses * Working capital-intensive operations: Gross current assets days rose to 207 days as on March 31, 2016, from 184 days as on March 31, 2015. * Modest leverage: Leverage is expected to remain above 2.3 times over the medium term in the absence of debt funded capex plan. Outlook: Stable CRISIL believes SFPL will continue to benefit from its promoters' extensive industry experience. The outlook may be revised to 'Positive' if the capital structure improves because of equity infusion, or if cash accrual increases substantially, backed by rise in revenue and better working capital management or enhancement in working capital bank limit. The outlook may be revised to 'Negative' if the financial risk profile, particularly liquidity, deteriorates because of a decline in revenue and profitability, large debt-funded capital expenditure, or increase in working capital requirement. SFPL, incorporated in 2011, is promoted by the Kishangarh (Rajasthan)-based Toshniwal family. The company manufactures cotton dyed shirting material. Mr. Rohit Toshniwal, the key promoter, manages operations. SFPL's profit after tax (PAT) was INR0.52 crore on net sales of INR63 crore for fiscal 2016, against a PAT of INR0.28 crore on net sales of INR38 crore for fiscal 2015. SAMBHAJI RAJE: ICRA Assigns 'B-' Rating to INR5.0cr Cash Loan ------------------------------------------------------------- ICRA has assigned the [ICRA]B- rating to the INR1.98 crore term loans and INR5.00 crore cash credit limits of Sambhaji Raje Cold Storage. The outlook on long term rating is stable. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term: Fund based limits- Term Loans 1.98 [ICRA]B- (Stable)/assigned Long term: Fund based Limits- Cash Credit 5.00 [ICRA]B- (Stable)/assigned Rationale The assigned rating takes into account the promoters long experience in the raisins business. ICRA also notes the location advantage to the firm with presence in Sangli (Maharashtra), a prominent grape growing region of the country. The rating, also factors in the high operating margins due to low operating costs as also the high capacity utilization in the past despite competition from other cold storages in the vicinity. The rating however, remains constrained with the small scale operations of the firm along with leveraged capital structure due to recently concluded debt funded capex. Further, the working capital intensity also remains high owing to advances extended to the grape growers. The firm/s revenues also remain contingent to the grape production in the region which in turn remains the function of agro climatic conditions. Going forward, obtaining adequate rentals along with achieving optimal capacity utilization and maintaining margins will be key rating sensitivities, going forward. Key rating drivers Credit Strengths * Long standing experience of the promoters in raisin trading and cold storage business. * Location advantage with presence in grape producing Sangli district of Maharashtra, high capacity utilization in the past fiscals. * Healthy profit margins owing to low operating costs. Credit Weakness * Leveraged capital structure primarily due to low net worth base and recently concluded debt funded capex. * High working capital intensity primarily due to advances to farmers. * High competition from other cold storages in vicinity. Description of key rating drivers highlighted: The promoters of the Sangli, Maharashtra based firm have a long standing experience of the promoters in raisin trading and cold storage business. Being located in the country's prominent grape growing region, the firm has a location advantage; further the capacity utilization remained in the past fiscals. The farmers in order to garner remunerative prices convert the same to raisins and store them in the cold storage. Sambhaji Raje Cold Storage charges monthly rentals from the farmers. The firm issues receipts to the farmers for the product stored in the cold storage which are discounted by the firm in order to address their immediate liquidity issues. The firm pledges these receipts with the bank. The farmers after selling the stock in the market repay the amount along with the interest to the firm. The firm has recorded an operating income of INR0.37 crore in FY'2016 - an 18% growth over the previous fiscal mainly due to increase in the capacity utilization. Given the limited operating costs, the operating margins remained healthy at ~ 58% in FY'2016.Higher interest costs have however resulted in lower NPM at ~2% in FY'2016.The capital structure however has remained adverse in the past fiscals particularly due to low net worth base. The debt profile remains dominated by working capital loans followed by term loans. Teh working capital intensity remained high mainly on advances extended to farmers. Incorporated in FY'2013, the Sangli based Sambhaji raje Cold storage is promoted by Mr.Sambhaji Patil. The proprietorship firm has established a cold storage of capacity 1850 MT mainly for storage of raisins. Abhijeet Traders is the flagship company of the group promoted by Mr. Sambhaji Patil. The firm is involved in trading of raisins. The other group firms involved in raisin trading and related agricultural products trading include Abhijeet Traders, Saraswati Traders, Abhijeet Krushipurak Udyog among others. SANGRAM CANE: CRISIL Assigns B- Rating to INR27MM LT Loan --------------------------------------------------------- CRISIL has assigned its 'CRISIL B-/Stable' rating to the bank facilities of Sangram Cane Agro Limited (SCAL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Long Term Bank Loan Facility 27 CRISIL B-/Stable The rating reflects SCAL's exposure to risks relating to early stage of execution of ongoing project. This weakness is partially offset by benefits that SCAL derives from the extensive experience of its promoters in the sugar industry. Key Rating Drivers & Detailed Description Weakness * Risks relating to early stage of project implementation, and cyclicality in the sugar industry: Exposure to implementation risks persist on the ongoing project'to set up a sugar and jaggery unit at Sangli, Maharashtra, with operations likely to begin only by end-2017. Seasonality in cane production and cyclicality in the sugar industry also constrain credit metrics. Strength * Experience of the promoters in the sugar industry: Benefits from the promoters' experience of almost a decade in the sugarcane business, and healthy relationships with suppliers and customers will continue to support business risk profile. Outlook: Stable CRISIL believes that SCAL will continue to benefit over the medium term from the promoters' experience in the sugar and allied industries. The outlook may be revised to 'Positive' if timely completion and stabilisation of the plant result in higher-than-expected cash flow. Conversely, the outlook may be revised to 'Negative' if time or cost overruns on the project, delays in ramp-up of operations, or low utilisation of capacity constrains cash flow. SCAL, incorporated in 2016 by Mr. Vitthalrao Yesugde and Mr. Nitin Yesugde, is installing a sugar and jaggery unit at Sangli, Maharashtra. SAURABH SOLAR: Weak Financial Strength Cues ICRA SP 4D Grading -------------------------------------------------------------- ICRA has assigned 'SP 4D grading to Saurabh Solar House (SSH), which indicates 'Weak Performance Capability' and 'Weak Financial Strength' of the channel partner & "Solar Photovoltaic - System Integrator" to undertake "On Grid Solar Rooftop Power Projects". The grading is valid for a period of two years from September 29, 2016 after which it will be kept under surveillance. Grading Drivers Strengths * Experienced promoters and technically qualified management * Diversified product portfolio provides broad clientele thus minimizing business risks arising out of product-oriented business practices Risk Factors * Low net profits recorded over the years reflecting low pace of business expansion * High competitive pressures from large number of organized/unorganized players * Small balance sheet size limits financial flexibility * Small scale of operations Fact Sheet Year of Incorporation 2000 Office Address 4, Rainbow House, Opposite Deepak Hospital, Nagar Manmad Highway, Ahmednagar Board of Directors Mrs. Sangita Nirmal (Director) Established in year 2000, Saurabh Solar House (SSH) is into trading and installation of devices associated with solar energy. The firm looks after the sales as well as services. SSH has implemented a few solar project over last 15 years of operations, and looks forward to enter the sector on a large scale. SHREE VENTURES: CRISIL Lowers Rating on INR5MM Cash Loan to 'D' --------------------------------------------------------------- CRISIL has downgraded its rating on the long-term bank facilities of Shree Ventures - Nagpur (SV) to 'CRISIL D' from 'CRISIL B+/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 5 CRISIL D (Downgraded from 'CRISIL B+/Stable') Proposed Long Term 1 CRISIL D (Downgraded from Bank Loan Facility 'CRISIL B+/Stable') The rating downgrade reflects the weak liquidity as there have been instances of working capital limits remaining overdrawn for over 30 days on account of stretched liquidity, owing to stretched receivables. Key Rating Drivers & Detailed Description Weaknesses * Large working capital requirement leading to weak liquidity as reflected from delays in debt servicing: Receivables deteriorated to 154 days as on March 31, 2016, from 106 days in the previous year leading to increase in the gross current assets to about 201 days as on March 31, 2016 from 156 days a year ago. Owing to stretch in working capital management, there have been instance of delays in debt servicing * Susceptibility of profitability to volatility in prices of traded goods and high customer concentration: Around 40% of revenue comes from a single customer, which exposes the firm to risks pertaining to concentration in revenue profile. Moreover, fixed price contracts with customers make operating margin susceptible to volatility in the prices of traded commodities. Strength * Extensive experience of proprietor: Longstanding presence in the agricultural products trading business has enabled the proprietor to establish strong relationship with customer and supplier. Set up in 2011 in Nagpur as a proprietorship concern by Mr. Ujwal Pagariya, SV is engaged in wholesale trading of agricultural products. SV reported a profit after tax (PAT) of INR4.7 crore on an operating income of INR46.9 crore for fiscal 2016, vis-a-vis INR4.3 crore and INR53.5 crore, respectively, in fiscal 2015. Net sales were INR22 crore for the 7 months ended October 2016. SKAJEN VITRIFIED: CRISIL Assigns B+ Rating to INR18MM LT Loan ------------------------------------------------------------- CRISIL has assigned its 'CRISIL B+/Stable/CRISIL A4' ratings to the bank facilities of Skajen Vitrified Private Limited (SVPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Long Term Loan 18 CRISIL B+/Stable Bank Guarantee 3.25 CRISIL A4 Cash Credit 8.75 CRISIL B+/Stable The ratings reflect the company's start-up phase and expected modest scale of operations in the intensely competitive ceramic tiles industry, and estimated large working capital requirement. These weaknesses are partially offset by the extensive experience of its promoters and favorable location in Morbi. Key Rating Drivers & Detailed Description Weaknesses * Start-up phase: Manufacturing plant is expected to start operations in January 2017 and will take time to stabilise. * Modest scale of operations: The company's scale is likely to be small in the intensely competitive ceramic tiles industry. * Average networth: Networth is likely to be INR12 crore. Strength * Extensive experience of promoters: Longstanding presence of promoters and already established dealer networth are likely to reduce demand risk. Outlook: Stable CRISIL believes SVPL will benefit over the medium term from the extensive experience of its promoters. The outlook may be revised to 'Positive' if timely stabilisation of operations leads to substantial cash accrual. The outlook may be revised to 'Negative' if cash accrual is low due to fewer orders or subdued profitability, or if financial risk profile weakens further because of sizeable working capital requirement or debt-funded capital expenditure. Established in 2016 by Mr. Jignesh Patel and Mr. Dushyant Patel, SVPL is setting up a plant to manufacture double-charged vitrified tiles in Morbi. Unit has installed capacity of 63,000 tonne per annum. The promoters have over a decade's experience in the ceramic industry through other entities. SLK PROGRESSIVE: CRISIL Reaffirms B+ Rating on INR2.0MM LT Loan --------------------------------------------------------------- CRISIL has reaffirmed its ratings on the bank facilities of SLK Progressive Veneer Private Limited at 'CRISIL B+/Stable/CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 0.5 CRISIL B+/Stable (Reaffirmed) Letter of Credit 7.5 CRISIL A4 (Reaffirmed) Proposed Long Term Bank Loan Facility 2.0 CRISIL B+/Stable (Reaffirmed) The rating reflects CRISIL's expectation of a sustained business risk profile with stable revenues and operating margins in fiscal 2017. Though revenues have declined in fiscal 2016, the company will maintain the revenues in fiscal 2017 and its accruals will be in line with historical trend. The company has below-average financial risk profile as reflected by its small net worth, low gearing and below-average debt protection metrics. Analytical Approach For arriving at its ratings, unsecured loans of INR3.16 crore from promoter as on March 31, 2016, have been treated as neither debt nor equity as these loans are expected to be retained in the business over the medium term. Key Rating Drivers & Detailed Description Weaknesses * Small scale of operations in the intensely competitive plywood- manufacturing and timber-trading industry Small scale of operations, with revenue of INR13.2 crore in fiscal 2016, limits the advantages of economies of scale as plywood-manufacturing and timber trading are highly fragmented with several small players operating within the country. * Working capital-intensive operations The operations are working capital intensive, with gross current assets of 180 days as on March 31, 2016, on account of high inventory and debtor days. Strength * Extensive experience of promoters: SLK's key promoters, Mr. Vijay Kedia, Mr. Dilip Kedia, and Mr. Rohit Kedia have experience of over a decade in the timber industry. Their experience is expected to help post a healthy revenue growth over the medium term. Established relationships with major suppliers and customers further strengthen the market position. Outlook: Stable CRISIL believes SLK will continue to benefit over the medium term from its promoters' extensive experience. The outlook may be revised to 'Positive' if the scale of operations and operating profitability improve considerably, leading to higher cash accrual or if networth improves on account of equity infusion. Conversely, the outlook may be revised to 'Negative' if revenue or operating margin reduce substantially, or if the financial risk profile, particularly liquidity, weakens, most likely because of large, debt-funded capital expenditure or stretch in working capital cycle. Incorporated on November 5, 2011, by the Kolkata based Patel and Kedia families, SLK manufactures veneer and trades in timber. The company has recently started manufacturing plywood. Its facility is at Kolkata, West Bengal. The company is currently promoted by Mr. Vijay Kedia, Mr. Dilip Kedia, and Mr. Rohit Kedia. STARBURST MOTORS: Ind-Ra Assigns 'B+' Rating to INR165MM Loan ------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Starburst Motors Private Limited's (SMPL) additional bank loans this rating: -- INR165 mil. Fund-based limits assigned 'IND B+/Stable' Rating RATING SENSITIVITIES Negative: A decline in EBITDA margin leading to a deterioration in credit metrics could lead to a negative rating action. Positive: Sustained revenue growth, along with an improvement in EBIDTA margin and credit metrics, could lead to a positive rating action. COMPANY PROFILE Incorporated in 2012, West Bengal-based SMPL is an authorised dealer of Maruti Suzuki. SMPL undertakes the sale of new and used passenger motor vehicles. The company has nine rented showrooms and two owned service centres. The company is managed by two of its experienced directors: Mr. Samir Kumar Bose and Mr Shantanu Bose. SUNGRO SEEDS: Ind-Ra Affirms 'BB' Long-Term Issuer Rating --------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed Sungro Seeds Private Limited's (SSPL, earlier known as Sungro Seeds Limited) Long-Term Issuer Rating at 'IND BB'. The Outlook is Stable. KEY RATING DRIVERS The affirmation reflects SSPL's continued moderate credit profile. SSPL's revenue was INR1,185 million in FY16 (FY15:INR1,171 million and FY14: INR644 million); the growth was due to its merger (effective from September 2015) with two companies Vikram Seeds Private Limited and John Fowler (India) Private Limited. SSPL reported an operating margin of 17.9% in FY16 (FY15: 12.6%) due to favorable market condition. SSPL has indicated revenue of INR954.12 million during 7MFY17 and it has also paid the unsecured term loan of INR360 million. Ind-Ra expects improvement in its credit metrics during FY17. Credit metrics improved slightly in FY16 yet remained moderate with gross interest coverage (EBITDA/gross interest expenses) and adjusted net leverage (net adjusted debt/EBITDA) of 1.5x in FY16 (FY15:1.0x) and 8.8x (10.6x), respectively. SSPL has interest free unsecured deposits from its promoters and directors. Ind-Ra notes that in FY16, SSPL's net adjusted leverage, excluding unsecured deposits, improved to 2.9x (FY15: 4.4x). The ratings are constrained by the working capital intensive nature of SSPL's operations which is mainly due to the high inventory holding requirements. The high inventory levels, however, insulate the company from an adverse impact which may arise if raw material (seeds) availability is impacted due to adverse climatic conditions. The cash conversion cycle deteriorated to 410 days in FY16 (FY15: 352 days). This deterioration was on account of increased inventory on account of the mergers. Furthermore, the seed industry is exposed to the risks of adverse agro-climatic conditions. Adverse climatic conditions can impact the profitability of firms in this industry. The ratings, however, derive comfort from over a decade of track record of SSPL's promoters in the seed industry. Moreover, SSPL is a part of the Barwale group which owns Maharashtra Hybrid Seeds Co (MAHYCO - IND A-/Negative) which is one of the largest players in the seed industry in India. RATING SENSITIVITIES Positive: A sustained improvement in credit metrics from current levels could lead to a rating upgrade. Negative: Further stretch in working capital cycle or credit metrics from current levels could lead to a rating downgrade. COMPANY PROFILE Established in 1973, SSPL is involved in the research and development and production of seeds. The company is a part of the Barwale group of companies which has a strong track record in the seed industry in India. SSPL produces both - hybrid and open pollinated seeds with the former contributing the majority of the turnover (FY16: 70%). SSL has an established presence in the industry across multiple states in India. SV ISPAT: Ind-Ra Assigns 'BB' Long-Term Issuer Rating ----------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned S.V. Ispat Private Limited a Long-Term Issuer Rating of 'IND BB'. The Outlook is Stable. KEY RATING DRIVERS The ratings reflect S.V. Ispat's moderate credit profile. Revenue decreased 19.7% yoy to INR239 million in FY16 on account of a fall in the sale price of products, majorly due to the slowdown experienced in the steel manufacturing sector. Also, EBITDA margins fluctuated in the range of 6.6%-11.9% over FY13- FY16 on account of price fluctuations in raw materials. However, a decline in raw material cost led to an improvement in EBITDA in FY16. This along with the company's comfortable utilization of the working capital facilities led to the interest cover increasing to 3.8x in FY16 (FY15: 3.1x). Leverage (debt/EBITDA) was stable at 1.7x in FY16 (FY15: 1.6x) on account of a marginal reduction in debt and cash & equivalent. The company has indicated revenue of INR117 million for 1HFY17. Liquidity was comfortable with the average maximum use of the fund-based working capital facilities at 77.3% for the 12 months period ended November 2016. The ratings are also supported by the company's promoter's experience of more than two decades in the field of met coke processing and beneficiation, revenue visibility till 1HFY18 from the outstanding order book of INR59 million and recent installation of calcination facilities for petroleum coke in Gujarat and for anthracite coke in Karnataka (85% completed). RATING SENSITIVITIES Positive: A substantial improvement in the top line and credit metrics will be positive for the ratings. Negative: A substantial decline in the top line and deterioration in the credit metrics and will be negative for the ratings. COMPANY PROFILE S.V. Ispat was incorporated in 2007 and processes met coke, raw and calcined anthracite coal, raw and calcined petroleum coke and amorphous graphite and trades exfoliated vermiculite and slag conditioner. TAMILNADU STATE: CRISIL Reaffirms B- Rating on INR13MM Cash Loan ---------------------------------------------------------------- CRISIL has reaffirmed its rating of 'CRISIL B-/Stable' on the long-term bank facility of Tamilnadu State Transport Corporation (kumbakonam) Limited (TNSTC). The rating continues to reflect the company's below-average financial risk profile. This weakness is partially offset by TNSTC's established market position in the road transport industry and availability of need-based funding support from the Government of Tamil Nadu (GoTN) and Tamil Nadu Transport Development Finance Corporation Ltd (TDFC). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 13 CRISIL B-/Stable (Reaffirmed) Key Rating Drivers & Detailed Description Weakness * Below-average financial risk profile: Financial risk profile is weak, because of sizeable long- and short-term, and substantial accumulated losses'over 6 times the share capital of around INR310 crore as on March 31, 2016. Continued negative operating margin on account of unrevised bus fare and volatility in fuel prices continues to result in pile-up in losses, and stress in financial profile. Strengths * Established market position in the transport industry: TNSTC is a GoTN enterprise floated to provide bus transportation services to all districts of Tamil Nadu and covers wide network of routes. It owns and operates around 3600 buses at around 96% of capacity. * Need-based funding support from GoTN and TDFC: TNSTC is a wholly owned enterprise of GoTN and receives extensive financial support directly and through TDFC to fund its operational losses and sustain operations. Outlook: Stable CRISIL believes TNSTC will continue to benefit over the medium term from its leading position in the Tamil Nadu road transport market. The outlook may be revised to 'Positive' if profitability significantly improves or if substantial capital infusion leads to a stronger financial risk profile. Conversely, the outlook may be revised to 'Negative' if further decline in operating margin, or reduction in support from the government weakens the financial risk profile. TNSTC is a corporation, fully-owned by GoTN, providing inter-city and intra-city bus transport facilities. TNSTC operates bus transport services in and around Kumbakonam and to other districts of Tamil Nadu. VEGA ENTERTAINMENT: Ind-Ra Lowers Long-Term Issuer Rating to 'D' ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has downgraded Vega Entertainment Private Limited's Long-Term Issuer Rating to 'IND D' from 'IND BB+'. The Outlook was Stable. KEY RATING DRIVERS The downgrade reflects Vega's continuous delays in debt repayments over the 12 months ended December 2016, due to stretched liquidity. This can be attributed to the company's elongated net working capital cycle of 74 days in FY16 (FY15: 31 days). RATING SENSITIVITIES Positive: Timely debt servicing for at least three consecutive months could result in a positive rating action. COMPANY PROFILE Vega is a Hyderabad-based mobile and internet-based entertainment and film production company. It deals primarily in south Indian films. Vega co-produces, acquires and distributes south Indian language films in multiple formats worldwide including theatrical, television syndication and digital platforms. Vega has a content library of over 733 movies with world negative rights and more than 2,749 digital rights which can be monetized on media platforms. VIJAY BREEDING: CRISIL Reaffirms B+ Rating on INR4.05MM Cash Loan ----------------------------------------------------------------- CRISIL has reaffirmed its rating on the long-term bank facilities of Vijay Breeding Farm and Hatcheries (VBFH) at 'CRISIL B+/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 4.05 CRISIL B+/Stable (Reaffirmed) Term Loan 2.47 CRISIL B+/Stable (Reaffirmed) The rating continues to reflect the firm's modest scale of operations in the intensely competitive poultry industry, and its highly leveraged capital structure. These weaknesses are partially offset by the extensive industry experience of its proprietor. Analytical Approach CRISIL has changed its analytical approach and has considered VBFH's business and financial risk profiles on a standalone basis. CRISIL had earlier combined them with the firm's group concern, Bharat Hatcheries (BH). The change in approach is because of change in management in BH and thus, there are no business and financial linkages. Key Rating Drivers & Detailed Description Weaknesses * Modest scale of operations,and exposure to intense competition: VBFH is a small player in the poultry industry, with expected revenue of INR27 crore in fiscal 2017, and faces competition from organised and unorganised players catering to regional demand due to transportation constraints and perishable nature of the product. * Highly leveraged capital structure: Gearing was 2.62 times as on March 31, 2016, and is expected to remain above 2.5 times in the near term. Strength * Extensive industry experience of proprietor: Longstanding presence has enabled the proprietor to understand market dynamics, establish strong relationship with suppliers and customers. Outlook: Stable CRISIL believes VBFH will continue to benefit from its proprietor's extensive experience in the poultry industry and its established relationships with customers and suppliers. The outlook may be revised to 'Positive' if revenue increases substantially, and profitability and capital structure improve. The outlook may be revised to 'Negative' if revenue or profitability declines, or if the firm undertakes large, debt- funded capex, weakening its financial risk profile. VBFH, a proprietorship firm of Mr. Rajvir Singh Jaglan set up in 1996, is in the poultry breeding and hatching business. It has day-old-chick (DOC) breeder farms at Panipat, Haryana. VIJAY STONE: ICRA Reaffirms 'B' Rating on INR4.90cr Loan -------------------------------------------------------- ICRA has reaffirmed the long term rating at [ICRA]B to the INR0.10 crore term loan limits and INR4.90 crore unallocated limits of Vijay Stone Quarries Private Limited. ICRA has also reaffirmed the short term rating at [ICRA]A4 to the INR5.00 crore fund based facilities of VSQPL. The outlook on the long term rating is Stable. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limits 5.00 [ICRA]A4 Re-affirmed Term Loan 0.10 [ICRA]B (Stable)Re-affirmed Unallocated Limits 4.90 [ICRA]B (Stable) Re-affirmed The rating action is based on the best available information. As part of its process and in accordance with its rating agreement with VSQPL, ICRA had sent repeated reminders to the company for payment of surveillance fee that became overdue; however despite multiple requests; the company's management has remained non- cooperative. ICRA's Rating Committee has taken a rating view based on best available information. In line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated Nov. 1, 2016, the company's rating is now denoted as: "[ICRA]B(Stable)/[ICRA]A4 ISSUER NOT COOPERATING". The lenders, investors and other market participants may exercise appropriate caution while using this rating, given that it is based on limited or no updated information on the company's performance since the time it was last rated. Vijay Stone Quarries Private Limited was incorporated in 1991 by Mr M Ramesh and his brothers. Before the incorporation of VSQPL, the promoters were involved in the trading of lime stone, slate and sand stone through another entity named Vijay Slate and Stone Exporters. The firm used to sell stones both in domestic and international market. Later the partnership firm was dissolved and two of the partners incorporated VSQPL. The directors have an experience of more than 25 years in quarrying and export of lime stone and slate stone. The company is currently involved in the quarrying of lime stone, sand stone and slate. The entire sale is made in international market to countries like USA, UK, France, Belgium, Japan, China, Italy and others. The company reported an operating income of INR8.39 crore and profit after tax of INR0.08 crore in FY2016 as against the operating income of INR8.36 crore and profit after tax of INR0.09 crore in FY2015. WHITE BRICKS: CRISIL Lowers Rating on INR14.5MM Term Loan to B -------------------------------------------------------------- CRISIL has downgraded the long term bank loan rating of White Bricks Buildtech Pvt. Ltd. (WBBPL) to 'CRISIL B/Stable' from 'CRISIL B+/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 4 CRISIL B/Stable (Downgraded from 'CRISIL B+/Stable') Term Loan 14.5 CRISIL B/Stable (Downgraded from 'CRISIL B+/Stable') The rating downgrade reflect CRISIL's belief that liquidity of WBBPL will remain constrained over the medium term, on account of lower cash accruals against repayment obligations. The lower cash accrual is on account of delay in commercial production of 2nd unit in Kanpur leading to small scale of operations. CRISIL believes that liquidity will remain stretched over the medium term. Analytical Approach CRISIL has treated the unsecured loans from promoters of INR7.98 Crores as on March 31, 2016 as neither debt nor equity (NDNE). These unsecured loans are non-interest bearing in nature and are expected to remain in the business over the medium term. Key Rating Drivers & Detailed Description Weaknesses * Nascent stages of operations lead to susceptibility of stabilisation risk: The phase-2 was started in June' 2016. WBBPL has reported small scale of operations of INR6.54crores for 2015- 16 (refer to financial year April 1 to March 31). CRISIL believes that scale of operations will remain susceptible to stabilisation of operations over the medium term. * Large working capital requirements: The working capital requirements are large marked by gross current assets (GCA) of 378 days as on March 31, 2016. This is driven by high inventory and high debtor of 107 days and 155 days as on March 31, 2016, respectively. CRISIL believes that working capital requirements will remain large over the medium term. * Weak financial risk profile: The financial risk profile of WBBPL is weak marked by low interest coverage of 1.12 times for 2015-16 and high total outside liability to adjusted networth of 3.59 times as on March 31, 2016. CRISIL believes that financial risk profile will remain weak over the medium term. Strengths * Healthy demand prospects of AAC blocks: The AAC blocks can be used in all types of construction such as residential homes, high-rises, mid-rise apartments, cold storages, commercial and industrial buildings, schools, hospitals, and hotels. CRISIL believes healthy demand prospects for AAC blocks will continue to benefit WBBPL's business risk profile over the medium term. * Established relationship with customers: The promoters have established relationship with customers which is expected to support the business risk profile over the medium term. Outlook: Stable CRISIL believes White Bricks Buildtech Pvt Ltd (WBBPL) will maintain its credit profile over the medium term on the back of its promoters' established relationships with prospective customers. The outlook may be revised to 'Positive' if substantial improvement in the scale of operations and profitability lead to healthy cash accrual, or if an improvement in the capital structure supported by capital infusion by promoters leads to a better financial risk profile. Conversely, the outlook may be revised to 'Negative' in case of any delay in stabilisation of the manufacturing facilities resulting in low cash accrual, a stretch in working capital cycle, or large debt- funded capex, leading to weak liquidity. WBBPL, incorporated in August 2013, is promoted by Mr. Dharmendra Yadav, Mr. Abhay Ram Singh Yadav, and Mrs. Neelam Yadav. The company has set up two AAC block manufacturing units, with a capacity of 150,000 cubic metres each in Aligarh and Kanpur (both in Uttar Pradesh). The first unit at Aligarh was started in September' 2014 and second unit in Kanpur started in June' 2016. WBBPL has reported a loss of of INR(0.83) Crores on net sales of INR6.54 Crores for 2016, vis-a vis INR(0.25) Crores and INR3.38 Crores, respectively for 2015. ========= J A P A N ========= TOSHIBA CORP: Seeks Buyers for American Gas ------------------------------------------- Tsuyoshi Inajima at Bloomberg News reports that Toshiba Corp., already reeling from a crisis over its nuclear business that has sent its market value down by almost half, is seeking help from one of the world's biggest buyers of liquefied natural gas to avoid billions of dollars in potential losses if it can't sell American gas it holds. Toshiba is working with Japan's Jera Co. to help it find buyers for gas that it has a contract to liquefy in the U.S. starting in 2019, said company spokesman Hirokazu Tsukimoto by phone, Bloomberg relates. Since Toshiba hasn't yet secured long-term contracts, it may be forced to sell the LNG in spot markets at a loss, or opt not to process gas at Freeport LNG Development LP's plant in Texas, Mr. Tsukimoto said. Either way, it will pay a fixed tolling fee. Bloomberg says the potential for having unsold gas is another blow to Toshiba, which is already facing billions of dollars in losses at its nuclear business following a profit-padding scandal in 2015. According to Bloomberg, the Japanese conglomerate said in a June filing it could face potential losses of ù971.4 billion at its power and infrastructure division, which the spokesman said is mostly due to its LNG contract in the U.S. "Finding new buyers is difficult in the current market structure," said Junzo Tamamizu, managing partner at Clavis Energy Partners LLC in Tokyo, told Bloomberg. "Toshiba could optimize its LNG sales by swapping cargoes and accessing various markets." When Toshiba struck the LNG deal with Freeport in September 2013, the outlook for profit seemed bigger, Bloomberg notes. Gas was selling in Asia at a larger premium over U.S. prices back then, making potential future American shipments more attractive. Bloomberg says a global gas glut has narrowed the price spread between the U.S. and Asia by more than half since Toshiba agreed to buy the right to liquefy 2.2 million tons a year of LNG for 20 years from the Freeport project. Bloomberg relates that Mr. Tsukimoto said Toshiba has conditional agreements with multiple buyers to sell more than half of its output from the Freeport project, but none of them are legally binding. The company hopes to finalize its first deal "as soon as possible," he said. Buyers of U.S. LNG, including Jera and Gail India Ltd., are seeking to resell or swap the fuel amid narrower profit margins. Jera signed a flexible contract to resell up to six LNG cargoes a year to the U.K.'s Centrica PLC last month, according to Bloomberg. Tokyo Gas Co., Japan's second-biggest LNG buyer, is in talks with European firms to swap the super-cooled gas it exports from the U.S., the report states. Jera, a joint venture between Tokyo Electric Power Co. Holdings Inc. and Chubu Electric Power Co., is helping Toshiba market LNG from the Freeport project, said spokesman Atsuo Sawaki, Bloomberg relays. Jera has a separate contract to buy the fuel from another facility at the Freeport plant starting in 2018 and the two Japanese companies could further cooperate in their LNG operations, he said. About Toshiba Toshiba Corporation (TYO:6502) -- http://www.toshiba.co.jp/-- is a Japan-based manufacturer involved in five business segments. The Digital Products segment offers cellular phones, hard disc devices, optical disc devices, liquid crystal televisions, camera systems, digital versatile disc (DVD) players and recorders, personal computers (PCs) and business phones, among others. The Electronic Device segment provides general logic integrated circuits (ICs), optical semiconductors, power devices, large- scale integrated (LSI) circuits for image information systems and liquid crystal displays (LCDs), among others. The Social Infrastructure segment offers various generators, power distribution systems, water and sewer systems, transportation systems and station automation systems, among others. The Home Appliance segment offers refrigerators, drying machines, washing machines, cooking utensils, cleaners and lighting equipment. The Others segment leases and sells real estate. As reported in the Troubled Company Reporter-Asia Pacific on Dec. 30, 2016, Moody's Japan K.K. downgraded Toshiba Corporation's corporate family rating (CFR) and senior unsecured rating to Caa1 from B3. Moody's has also downgraded Toshiba's subordinated debt rating to Ca from Caa3, and affirmed its commercial paper rating of Not Prime. At the same time, Moody's has placed Toshiba's Caa1 CFR and long-term senior unsecured bond rating, as well as its Ca subordinated debt rating under review for further downgrade. The TCR-AP reported on Jan. 4, 2017, that S&P Global Ratings said it has lowered its long-term corporate credit and senior unsecured debt ratings on Toshiba Corp. one notch each, to 'B-' from 'B' and 'B+' from 'BB-', respectively, and has placed the ratings on CreditWatch with negative implications. At the same time, S&P has placed its 'B' short-term corporate credit and commercial paper program ratings on Toshiba on CreditWatch negative. ==================== N E W Z E A L A N D ==================== ABT CONSTRUCTION: In Liquidation; Creditor Claims Due Jan. 27 ------------------------------------------------------------- NZN reports that ABT Construction has been put into liquidation by transport firm Multi-Trans over unpaid bills amid reports of frictions within its management team. NZN, citing first liquidators' report, says McDonald Vague's Peri Finnigan and Boris van Delden are unable to determine precisely when ABT ceased trading around mid-2016 and have no current address for the company. Of its 200 shares, Auckland-based Qijie Xu is dominant with 124 shares, while Murray Painting held 66 shares, NZN discloses. According to NZN, Multi-Trans director Dave Brown said his firm hauled ABT modules from the Auckland Show Grounds to an Albany development in 2015 but weren't paid in full. NZN relates that Mr. Brown said ABT "paid a little bit of money, locked the office and didn't answer the phone". In 2015, ABT had four developments on the go in Auckland at Narrow Neck, Unsworth Heights and Grafton and even a contract for toilets on Great Barrier Island, the report notes. According to NZN, liquidators indicated in their report that based on information from various parties "it appears there were conflicts within the company's management team that resulted in the company ceasing to trade around mid-2016". The value of secured and unsecured creditor claims is unknown, NZN says. Secured creditors with assets pledged are Carter Holt Harvey, Harvey Norman, Ricoh, Steel & Tube Holdings, Tile Imports NZ and Bunnings, NZN discloses. Creditor claims are due in with the liquidators by January 27, adds NAZ. JAMIE'S ITALIAN: Shuts 6 UK Restaurants; Effect on NZ Unclear ------------------------------------------------------------- Chloe Winter at Stuff.co.nz reports that celebrity chef Jamie Oliver is closing six of his restaurants in the UK, leaving plans for a New Zealand eatery hanging in the balance. According to Stuff.co.nz, the world-renowned cook intended to open his first Kiwi restaurant in Wellington last year, but plans were abandoned after the Australian operator of Jamie's Italian restaurants went into receivership. Now, seven months on, Mr. Oliver has decided to close five Jamie's Italian restaurants in England and one in Scotland by the end of the first quarter of this year, Stuff.co.nz relates citing The Guardian. However, it remains unclear whether the closures will impact the opening of a New Zealand restaurant, says Stuff.co.nz. According to Stuff.co.nz, Jamie Oliver Restaurant Group chief executive Simon Blagden told The Guardian: "As every restaurant owner knows, this is a tough market and post-Brexit the pressures and unknowns have made it even harder." A combination of high costs for ingredients, staff training and lower footfall had forced the restaurant closures, Mr. Blagden said. "Because we refuse to compromise on the quality and provenance of our ingredients and our commitment to training and developing our staff, we need restaurants that can serve an average of 3000 covers every week to be sustainable." The six restaurants accounted for less than 5% of the restaurant chain's total turnover, and overall the chain continued to perform well at home and abroad, Mr. Blagden, as cited by Stuff.co.nz, said. "In the UK, we will be focusing on our core Jamie's Italian estate and on the expansion of the Barbecoa brand which will see two new openings in 2017. "Internationally, we plan to launch another 22 Jamie's Italian restaurants with our current partners and are also looking forward to focusing on running and developing further our newly acquired Australian restaurants." In November last year, Mr. Oliver moved to buy back his restaurants business in Australia after Keystone Hospitality Group -- the Australian operator of Jamie's Italian restaurants - - went into receivership and put the six-strong franchise up for sale, Stuff.co.nz recalls. At the time, Mr. Oliver told Stuff: "We're trying to buy it [the Jamie's Italian franchise] back ourselves, so it's run by myself, which is our intention. "With that in mind one of the first priorities will be New Zealand again because we really want to be there. I love Wellington, it's one of my favourite places. "It will happen, whether someone else buys it -- which is not my preferred choice -- or whether we get it, which I should find out in the next two weeks," he said. "New Zealand will be very much back on the radar and we're excited to make it happen." Oliver currently has 42 Jamie's Italian restaurants in the UK and more than 36 abroad run under his name, Stuff.co.nz discloses. RELATIONSHIPS AOTEAROA: Unsecured Creditors Unlikely to Recoup -------------------------------------------------------------- Emily Spink at Stuff.co.nz reports that hundreds of unsecured creditors are unlikely to see any of the NZ$1.7 million owed to them by a liquidated national counselling service Relationships Aotearoa Incorporated. According to Stuff.co.nz, Pricewaterhouse Coopers New Zealand Wellington managing partner John Fisk said the liquidation would likely be completed in the next month. Their investigation into the failure of Relationships Aotearoa identified that "they had too many offices and too higher overhead, compared to the revenue they could get for servicing clients," Stuff.co.nz relates. As of January 19, 2017, the service had a cash balance of NZ$234,000, which meant there was a "significant shortfall," Stuff.co.nz discloses. According to Stuff.co.nz, Mr. Fisk said there was an estimated 130 unsecured creditors who were owed a total of NZ$1.7 million. Sixty-nine of them had filed claims, Stuff.co.nz notes. "Most of the cash that has been realised will go to Inland Revenue, which is the preferential creditor that hasn't been paid yet," the report quotes Mr. Fisk as saying. Inland Revenue submitted a preferential claim totalling NZ$262,000. Stuff.co.nz relates that while staff had been paid in full prior to the appointment of the liquidators, 90 counsellors contracted to the service would not be paid. Private counsellor Susan Alderston was still owed "several thousand" dollars for the last month of Relationships Aotearoa work she had been contracted to do, adds Stuff.co.nz. New Zealand's largest counselling service Relationships Aotearoa Incorporated was placed into liquidation in July 2015 due to financial difficulties. ********* Tuesday's edition of the TCR-AP delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-AP editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Tuesday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-AP constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-AP editor holds some position in the issuers' public debt and equity securities about which we report. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR-AP. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com Friday's edition of the TCR-AP features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Asia Pacific is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, and Peter A. Chapman, Editors. Copyright 2017. All rights reserved. ISSN: 1520-9482. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is US$775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000 or Nina Novak at 202-362-8552. *** End of Transmission ***