/raid1/www/Hosts/bankrupt/TCRAP_Public/180524.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
Thursday, May 24, 2018, Vol. 21, No. 102
Headlines
A U S T R A L I A
AUSTRALIAN LABOUR: First Creditors' Meeting Set for June 1
BELLA VUE: First Creditors' Meeting Slated for May 30
BIG UN: Big Review TV Enters Into Voluntary Administration
JADELYNX PTY: First Creditors' Meeting Set for May 31
JD BUILDING: First Creditors' Meeting Set for June 1
ONEOVER PTY: Appeal From AAT Decision to Ban Director Dismissed
PICTON PRESS: First Creditors' Meeting Set for June 1
C H I N A
* CHINA: Default Jitters in Bond Market Are Crimping Note Sales
H O N G K O N G
NOBLE GROUP: Extends Completion Date for Asset Disposal to Tricon
I N D I A
AAROHI CONSTRUCTION: Ind-Ra Retains B+ Rating in Non-Cooperating
AFFLATUS INT'L: Ind-Ra Maintains BB+ Rating in Non-Cooperating
ATUL KRISHNA: CRISIL Assigns B+ Rating to INR5MM Term Loan
BINANI CEMENT: NCLAT Declines Plea for Status Quo on Bids
BIPIN ENGINEERS: CRISIL Withdraws B- Rating on INR3.5MM Cash Loan
BOMBAY FANCY: Ind-Ra Migrates B+ Issuer Rating to Non-Cooperating
CENTECH ENGINEERS: CRISIL Migrates D Rating to Not Cooperating
CHEMGEMS INDIA: CRISIL Hikes Rating on INR5.13MM Loan to B-
DINESH SEAMLESS: CRISIL Withdraws B- Rating on INR6MM Cash Loan
ELKAYPEE SPINNERS: Ind-Ra Maintains BB- Rating in Non-Cooperating
GAURAV EXPORTRADES: CRISIL Assigns B- Rating to INR2MM Loan
HIGHBAR TECHNOLOGIES: CARE Reaffirms D Rating on INR19.57cr Loan
HINDUSTAN CONSTRUCTION: CARE Reaffirms D on INR4775.8cr Loan
HOTEL MIRAMAR: Ind-Ra Assigns BB- Issuer Rating, Outlook Stable
ITMS INDIA: Ind-Ra Migrates BB- Issuer Rating to Non-Cooperating
JASMINE EXIM: CRISIL Assigns B+ Rating to INR2MM Proposed Loan
JAVERY INCORPORATION: CRISIL Assigns B+ Rating to INR7.5MM Loan
KALYAN RESORTS: Ind-Ra Assigns BB- Issuer Rating, Outlook Stable
KH FOGES: CRISIL Withdraws B Rating on INR5MM Cash Loan
KVK BIO: Ind-Ra Migrates 'D' LT Issuer Rating to Non-Cooperating
MIRAMAR RESORTS: Ind-Ra Assigns BB- Issuer Rating, Outlook Stable
NAGAYYA MAKKIMANE: CARE Assigns B+ Rating on INR5cr LT Loan
NATIONAL TRADING: CRISIL Reaffirms B+ Rating on INR5MM Loan
NC JOHN: Ind-Ra Affirms BB+ LT Issuer Rating, Outlook Stable
P.C. THOMAS: CRISIL Withdraws B+ Rating on INR8.5MM Cash Loan
PARIN GEMS: Ind-Ra Affirms BB- LT Issuer Rating, Outlook Stable
RAJA MOTORS: CARE Assigns B+ Rating to INR7.50cr LT Loan
RAJA MOTORS: CARE Assigns B+ Rating to INR8.63cr LT Loan
RAMGO MODERN: CRISIL Reaffirms 'B' Rating on INR5MM Cash Loan
RATHI CHEMPELS: CRISIL Reaffirms B- Rating on INR5MM Cash Loan
SAI MAHAAVIR: CRISIL Withdraws B Rating on INR20MM Term Loan
SALASAR BALAJJI: CARE Assigns B+ Rating to INR9.50cr LT Loan
SATNAM INDUSTRIES: Ind-Ra Maintains B+ Rating in Non-Cooperating
SHARVI RICE: Ind-Ra Migrates BB Issuer Rating to Non-Cooperating
SHREE DWARKADHISH: CRISIL Lowers Rating on INR10MM Loan to D
SHREE GOVINDAM: CARE Assigns B+ Rating to INR7.5cr LT Loan
SITARAM GEMS: Ind-Ra Affirms 'BB' Issuer Rating, Outlook Stable
SRI ADITYA: CRISIL Withdraws B Rating on INR14MM Cash Loan
SRINIVASAN CHARITABLE: Ind-Ra Moves D Rating to Non-Cooperating
SRINIVASAN HEALTH: Ind-Ra Migrates D LT Rating to Non-Cooperating
SURYA ELECTRICALS: Ind-Ra Maintains BB- Rating in Non-Cooperating
SWASTIK COAL: Ind-Ra Lowers Long-Term Issuer Rating to 'D'
TRIVENI KRIPA: CARE Assigns B+ Rating to INR20cr LT Loan
VPN RAW: CARE Assigns B+ Rating to INR9cr LT Loan
VANAMAALI INFRA: CARE Assigns B+ Rating to INR1.0cr LT Loan
VGS ENTERPRISES: CARE Assigns B+ Rating to INR5cr LT Loan
M A L A Y S I A
1MDB: Ordered to Come Clean on Ability to Service Debts
S I N G A P O R E
HYFLUX LTD: Seeks Court Supervised Process for Reorganisation
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A U S T R A L I A
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AUSTRALIAN LABOUR: First Creditors' Meeting Set for June 1
----------------------------------------------------------
A first meeting of the creditors in the proceedings of Australian
Labour Solutions (NSW) Pty Limited will be held at the offices of
Farnsworth Shepard, Level 5, 2 Barrack Street, in Sydney, NSW, on
June 1, 2018, at 11:00 a.m.
Benjamin Michael Carson of Farnsworth Shepard was appointed as
administrator of Australian Labour on May 22, 2018.
BELLA VUE: First Creditors' Meeting Slated for May 30
-----------------------------------------------------
A first meeting of the creditors in the proceedings of Bella Vue
TC Pty Ltd, formerly trading as "Grocer and Grind", will be held
at the offices of Robson Cotter Insolvency Group, Suite 7, 66
Appel Street, in Surfers Paradise, Queensland, on May 30, 2018,
at 9:00 a.m.
Bill Cotter of Robson Cotter was appointed as administrator of
Bella Vue on May 21, 2018.
BIG UN: Big Review TV Enters Into Voluntary Administration
----------------------------------------------------------
BIG Un Limited said that the directors of Big Review TV Ltd
(BRTV), a wholly owned subsidiary of BIG, have placed BRTV into
voluntary administration.
The purpose of BRTV entering into voluntary administration is to
allow for the restructure of its business via a Deed of Company
Arrangement ('DOCA') and preserve value for shareholders of BIG
Un Limited.
BRTV received notice that FC Capital Pty Ltd has assigned all of
its interests in the Sponsorship Agreement dated August 2017 with
BRTV to a third party, AS Capital Ventures Pty Ltd.
AS Capital is a company whose director and secretary is Mr. Adam
Shepherd, a Sydney based director who specialises in small to
medium enterprises and the work-out of secured creditor
positions.
FC Capital has advised the Board of BIG that it has agreed to
assist AS Capital in its efforts to work with the Board of BIG to
help the group to restructure and preserve value for shareholders
of BIG.
The board of BIG are currently conducting ongoing negotiations
with AS Capital to effect an agreement that is intended to
release each other from all claims and under which the debt owing
to AS Capital by BRTV (pursuant to the Sponsorship Agreement)
will be discharged.
The aim of the negotiations is to allow the restructuring of
BRTV, which is intended to emerge from this process as an ongoing
Australian concern. The negotiations remain to be successfully
concluded and implemented.
AS Capital has indicated it will continue to fund BRTV during the
course of the administration.
BIG UnLimited will continue to operate the BHA Media Pty Ltd and
Food and Beverage Media Pty Ltd businesses, which will continue
to be run by existing management, from existing premises.
About Big Un Ltd
Big Un Ltd ASX BIGBig Un Ltd (ASX:BIG) is the parent company of
Big Review TV Ltd. Big Review TV are innovative disruptors in the
online video space delivering subscription based video technology
products and services. The Company has operations across
Australia and in New Zealand, the United Kingdom and the United
States, Hong Kong, Singapore and Vancouver and was listed on the
ASX in December 2014.
JADELYNX PTY: First Creditors' Meeting Set for May 31
-----------------------------------------------------
A first meeting of the creditors in the proceedings of Jadelynx
Pty Ltd will be held at the offices of Mackay Goodwin, Level 9,
440 Collins Street, in Melbourne, Victoria, on May 31, 2018, at
12:30 p.m.
Domenico Alessandro Calabretta of Mackay Goodwin was appointed as
administrator of Jadelynx Pty on May 21, 2018.
JD BUILDING: First Creditors' Meeting Set for June 1
----------------------------------------------------
A first meeting of the creditors in the proceedings of JD
Building Products Pty Ltd will be held at the offices of BPS
Recovery, Level 18, 201 Kent Street, in Sydney, NSW, on
June 1, 2018, at 11:00 a.m.
Mitchell Warren Ball of BPS Recovery was appointed as
administrator of JD Building on May 22, 2018.
ONEOVER PTY: Appeal From AAT Decision to Ban Director Dismissed
---------------------------------------------------------------
The Federal Court has dismissed an appeal from a decision of the
Administrative Appeals Tribunal, affirming the Australian
Securities and Investments Commission's decision to disqualify
Lubo Zivanovic, of Bilgola Beach, NSW, from managing corporations
for three years.
ASIC disqualified Mr. Zivanovic on Feb. 18, 2016, following his
involvement in the management of numerous failed companies,
namely:
- Oneover Pty Ltd (ACN 105 854 475);
- Bargara Rentals Pty Limited (ACN 123 819 876);
- Bargara Services Pty Limited (ACN 106 082 268);
- Backvet Pty Ltd (ACN 104 664 422);
- Markaway (NSW) Pty Ltd (ACN 070 008 507);
- Toandtwo Pty Ltd (ACN 118 706 291);
- Girraween Scaffold (Australia) Pty Ltd (ACN 129 942 132);
- Mountrich Pty Ltd (ACN 129 457 834);
- Devlaw Pty Ltd (ACN 073 291 960);
- Muneemake Pty Ltd (ACN 105 501 102);
- Tinaduke Pty Ltd (ACN 127 655 805);
- Cebakay Pty Ltd (ACN 105 855 749);
- Invotow Pty Ltd (ACN 105 008 044);
- Kakconab Pty Ltd (ACN 135 880 625);
- Ezocom Pty Ltd (ACN 127 199 713);
- Fratocom Pty Ltd (ACN 090 682 752);
- Notxituk Pty Ltd (ACN 068 575 922); and
- Twooftwo Pty Ltd (ACN 096 737 450).
All the companies managed by Mr. Zivanovic operated in the
building and construction industries and were wound up in
liquidation between 2008 and 2014. Liquidators lodged reports for
all 18 companies, alleging each company was insolvent and had
failed to keep books and records. The total estimated deficiency
by the liquidators was AUD26,855,268.
The liquidators of Noxituk Pty Ltd and Ezocom Pty Ltd also lodged
supplementary reports with ASIC that alleged these companies
failed due to Mr. Zivanovic's poor management and control,
extremely large debts that were accrued, their failure to pay tax
and lack of company records.
Mr. Zivanovic appealed ASIC's disqualification decision to the
AAT and obtained suppression orders that prevented ASIC from
disclosing his disqualification. On Aug. 8, 2017, the AAT
affirmed ASIC's decision. Mr. Zivanovic then appealed the AAT's
decision. On May 17, 2018, the Federal Court dismissed
Mr. Zivanovic's appeal. Mr. Zivanovic is now disqualified from
managing corporations until Feb. 18, 2019.
Section 206F of the Corporations Act allows ASIC to disqualify a
person from managing corporations for up to five years if, within
a seven-year period, the person was an officer of two or more
companies, and those companies were wound up and a liquidator
provides a report to ASIC about the company's inability to pay
its debts.
ASIC provided funding from the Assetless Administration Fund
(AAF) that assisted the liquidators to undertake further
enquiries and prepare reports that were subsequently used by ASIC
to disqualify Mr. Zivanovic.
ASIC maintains a public register of banned and disqualified
persons that provides information about people who have been:
* disqualified from involvement in the management of a
corporation;
* disqualified from auditing self-managed superannuation
funds (SMSFs); or
* disqualified from practising in the financial services of
credit industry.
PICTON PRESS: First Creditors' Meeting Set for June 1
-----------------------------------------------------
Sean Smith at The West Australian reports that Picton Press has
fallen into administration over a AUD1.3 million debt to the
Australian Taxation Office.
Insolvency firm Cor Cordis' Cliff Rocke and Jeremy Nipps were put
into the West Perth-based business on May 21 by its two directors
after the ATO took court action to wind up the company.
Picton specialises in colour promotional pamphlets and catalogues
for the likes of Domino's Pizza, Coles and Woolworths, brochures,
posters, annual reports, stickers and even school text books.
It is understood that the business has invested in new presses in
recent years to improve its efficiency, nearly halving its
workforce to just under 30.
"There's no real issue from a trade perspective," the report
quotes Mr. Nipps as saying. "It's more that the ATO decided to
draw a line in the sand."
The collapse came after failed efforts to secure a payment plan
with the ATO, the report notes.
According to The West Australian, Cor Cordis said the directors
are keen to restructure Picton via a deed of company arrangement.
"We will obviously consider all alternatives, including testing
the market to see what options there are by way of a sale of the
business as a going concern," Mr. Nipps, as cited by The West
Australian, said.
Aside from the ATO, the company owes an estimated AUD700,000 to
AUD800,000 to trade creditors, the report discloses.
A first meeting of the creditors in the proceedings of Picton
Press Pty Ltd will be held at BGC Conference Room, Plaza Level,
BGC Centre, 28 The Esplanade, in Perth, WA, on June 1, 2018, at
10:00 a.m.
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C H I N A
=========
* CHINA: Default Jitters in Bond Market Are Crimping Note Sales
---------------------------------------------------------------
Bloomberg News reports that investors in China's yuan-denominated
corporate bonds are getting pickier in the wake of a recent slew
of payment failures.
According to Bloomberg, Beijing Orient Landscape & Environment
Co. said May 21 it sold just CNY50 million (US$8 million) of
three-year bonds instead of an earlier plan to raise no more than
CNY1 billion. Last May 18, Shenzhen Investment Holding Co. issued
CNY1.3 billion, way below its target of CNY4 billion, Bloomberg
relays.
Bloomberg says corporate defaults are piling up in China's
onshore bond market as a government crackdown on leverage chokes
financing for private-sector companies. At least 14 bonds have
missed payments so far this year. Among the six first-time
defaulters in 2018, four were listed firms, according to
Bloomberg-compiled data.
"Investors are very risk-averse, mostly avoiding issuers with
ratings of AA and below," Bloomberg quotes Gary Zhou, director of
fixed income investment at China Securities International's asset
management arm in Hong Kong, as saying. "People are especially
cautious towards private-sector companies and those with
refinancing pressure," he said.
Bloomberg relates that the spread on three-year AA rated notes
over AAA peers rose to 66 basis points on May 18, the highest
since June 2017. AA rated notes are considered junk score in
China.
"A bevy of bond defaults in China recently has curbed demand for
notes in the primary market," the report quotes Ming Ming, head
of fixed-income research at Citic Securities Co, as saying.
"Beijing Orient doesn't have high ratings and is a publicly
listed company, which seems to be where defaults tend to happen
lately."
A spokesperson for Beijing Orient said the firm has funding plans
to match its development and the downsize of the new bond won't
have any impact on the company's liquidity, Bloomberg adds.
================
H O N G K O N G
================
NOBLE GROUP: Extends Completion Date for Asset Disposal to Tricon
-----------------------------------------------------------------
The Strait Times reports that Noble Group has again extended the
completion date for the proposed disposal of its marketing and
offtake agreement to Tricon Dry Chemicals, as well as certain
debt contracts to Tricon International.
The completion date for the proposed disposal of assets has been
extended for a second time to Aug. 1 from May 31, the report
relates.
The marketing and offtake agreement for petrochemical products
and loan-related contracts was for about US$10.1 million (US$13.5
million), the Strait Times relates citing the company's
announcement of the disposal in February.
It said then that the loss on the disposal would amount to about
US$6.8 million based on the book value of the assets as at end-
September 2017 of about US$16.9 million, the report relays.
Net proceeds from the sale would be made available for general
working capital purposes, adds The Strait Times.
About Noble Group
Hong Kong-based Noble Group Limited (SGX:N21) --
http://www.thisisnoble.com/-- engages in supply of agricultural,
industrial and energy products. The Company supplies agricultural
and energy products, metals, minerals and ores. Agriculture
products include grains, oilseeds and sugar to palm oil, coffee,
and cocoa. Energy business includes coal, gas and liquid energy
products. In metals, minerals and ores (MMO), it supplies iron
ore, aluminum, special ores and alloys. The Company operates
nearly in 140 locations. It supplies growth demand markets in
Asia and Middle East. Alcoa World Alumina and Chemicals is the
subsidiary of this company.
As reported in the Troubled Company Reporter-Asia Pacific on
March 23, 2018, S&P Global Ratings lowered its long-term issuer
credit rating on Noble Group to 'D' from 'CC'.
S&P said, "We lowered the ratings because Noble has missed the
principal and coupon payment for its 2018 notes due March 20,
2018. Noble also missed the coupon payment on its 2022 notes due
March 9, 2018. In addition, the company said it would not make
the payments despite being given 30-day grace periods to meet
both obligations. The failure to make these payments will
trigger cross-defaults on the company's other obligations. We do
not expect Noble to meet any outstanding obligations as the
company preserves its assets during the restructuring process."
Noble is undergoing a debt restructuring, which management
expects to be completed by the end of July. S&P will conduct
another review the company's credit profile after the
restructuring is complete.
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I N D I A
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AAROHI CONSTRUCTION: Ind-Ra Retains B+ Rating in Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Aarohi
Constructions Private Limited's (ACPL) Long-Term Issuer Rating in
the non-cooperating category. The issuer did not participate in
the rating exercise despite continuous requests and follow-ups by
the agency. Therefore, investors and other users are advised to
take appropriate caution while using the rating. The rating will
now continue to appear as 'IND B+ (ISSUER NOT COOPERATING)' on
the agency's website.
The instrument-wise rating actions are:
-- INR100 mil. Fund-based working capital limit maintained in
Non-Cooperating Category with IND B+ (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
April 1, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Established in 1986, ACPL develops commercial and residential
complexes across Lucknow.
AFFLATUS INT'L: Ind-Ra Maintains BB+ Rating in Non-Cooperating
--------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Afflatus
International's Long-Term Issuer Rating in the non-cooperating
category. The issuer did not participate in the rating exercise
despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
continue to appear as 'IND BB+ (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating actions are:
-- INR450 mil. Fund-based limit maintained in Non-Cooperating
Category with IND BB+ (ISSUER NOT COOPERATING) /IND A4+
(ISSUER NOT COOPERATING) rating; and
-- INR20 mil. Non-fund-based limit maintained in Non-Cooperating
Category with IND A4+ (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
February 3, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Established in 1975, Afflatus International manufactures denim
and non-denim garments. The firm provides end-to-end apparels
solutions.
ATUL KRISHNA: CRISIL Assigns B+ Rating to INR5MM Term Loan
----------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the bank
facilities of Atul Krishna Preservation And Cold Storage Private
Limited (AKPCPL).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 1.5 CRISIL B+/Stable (Assigned)
Term Loan 5 CRISIL B+/Stable (Assigned)
The rating reflects small scale of operations in a highly
fragmented industry and below-average financial risk profile.
These weaknesses are partially offset by the experience of the
promoters in the cold storage and agro-commodities trading
businesses.
Analytical Approach
Unsecured loans extended by promoters are treated as debt.
Key Rating Drivers & Detailed Description
Weakness
* Small scale of operations in a highly fragmented industry:
AKPCPL's scale of operations is modest, as indicated by its
estimated operating income of INR1.1 crore in Fiscal 2018 and its
net worth of INR1.78 crore as on March 2018. The operating income
is expected to increase to over INR2.0 crore in fiscal 2019.
Intense competition may continue to restrict the significant
scalability of operations and limit the pricing power with
customers.
* Below-average financial risk profile: The financial risk
profile is below-average marked by low networth of INR1.78 crore,
high gearing of 5.28 times and average debt protection metrics
with net cash accruals to total debt of 0.05 times and interest
coverage of 1.93 times in fiscal 2018.
Strength:
* Extensive experience of the promoters: AKPCPL should benefit
from over 2 decades' experience of its promoters - Mr. Yaduveer
Singh and Mr. Kailash Chand, in the cold storage and agro
commodities trading businesses.
Outlook: Stable
CRISIL believes that AKPCPL will continue to benefit from
promoters extensive experience in the industry. The outlook may
be revised to 'Positive' if there is significant improvement in
scale of operations and profitability leading to sizable cash
accruals. Conversely, the outlook may be revised to 'Negative' if
the company's financial risk profile and liquidity deteriorates
due to pressure on its profitability or stretch in the working
capital cycle or unanticipated, large capex.
AKPCPL was incorporated in 2016 for providing cold storage
facilities for potatoes. It was set up by Mr. Yaduveer Singh and
Kailash Chand. Mr.Kailash Chand, look into the day-to-day
operations of the company.
BINANI CEMENT: NCLAT Declines Plea for Status Quo on Bids
---------------------------------------------------------
BloombergQuint reports that the National Company Law Appellate
Tribunal on May 22 declined to order a status quo on bids to
maximise the offer for debt-ridden Binani Cement Ltd. by the two
resolution applicants - UltraTech Cement Ltd. and Dalmia Bharat
group.
According to BloombergQuint, the appellate tribunal said the
final outcome of the bids to maximise the value would be subject
to the outcome of Dalmia's petition filed before it. "In the
pendency of the order . . . interim orders passed earlier will
continue," BloombergQuint quotes an NCLAT bench headed by
Chairman Justice SJ Mukhopadhaya as saying.
The appellate tribunal will hear the matter on July 10, the
report says.
The NCLAT was hearing a batch of petitions filed against the
Kolkata bench of the NCLT, which had declined to approve the bids
of Dalmia Bharat group's Rajputana Properties for Binani Cement,
the report recalls. The NCLT had asked Binani Cement lenders to
consider the bid of Aditya Birla group firm UltraTech, which was
higher by around Rs 1,100 crore. It had also given Dalmia Bharat
an opportunity to match it.
BloombergQuint relates that during the proceedings, Senior
Advocate Gopal Subramanium appearing for Dalmia Bharat said
UltraTech was ineligible under Section 29(A) to bid for Binani
Cement under the Insolvency and Bankruptcy Code.
However, this was opposed by Senior Advocate Mukul Rohatgi,
appearing for UltraTech. "There is no ground to term us as
ineligible. Rajputana is asking for grounds to oust us because
they can not oust us on money," the report quotes Rohatgi as
saying. Rohatgi further said Ultratech had put forth a bid of Rs
7,600 crore, which was Rs 1,100 crore more than Rajputana, the
report relays.
BloombergQuint adds that Subramanium said Rajputana Properties is
being asked to match the offer. "We are being pressed by the CoC
(to match the offer)," he said requesting the tribunal to grant
status quo on process till the next hearing.
However, the NCLAT declined to stay and directed all the parties
to file a written submission why they are eligible and the other
party is not, the report states.
About Binani Cement
Binani Cement is a subsidiary of Binani Industries, a
conglomerate with manufacturing and R&D operations. It has a
manufacturing capacity of 11.25 million tonnes (mt) per annum
with integrated plants in India and China, and grinding units in
Dubai.
On July 25, 207, the Kolkota bench of the National Company Law
Tribunal (NCLT) admitted an insolvency petition against Binani
Cement.
Bank of Baroda (BoB) had referred Binani to the bankruptcy court
after it failed to repay a sum of INR97 crore. BoB has appointed
Vijaykumar V Iyer of Deloitte India as the interim resolution
professional (IRP) to oversee the insolvency process.
The company owes around INR6,500 crore to its lenders, according
to LiveMint.
BIPIN ENGINEERS: CRISIL Withdraws B- Rating on INR3.5MM Cash Loan
-----------------------------------------------------------------
CRISIL Ratings has withdrawn its rating on the bank facility of
Bipin Engineers Private Limited (Bipin) following a request from
the company and on receipt of a 'no dues certificate' from the
banker. The rating action is in line with CRISIL's policy on
withdrawal of bank loan ratings.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 0.5 CRISIL A4 (Withdrawn)
Cash Credit 3.5 CRISIL B-/Stable (Withdrawn)
Letter of Credit 0.5 CRISIL A4 (Withdrawn)
Proposed Long Term
Bank Loan Facility 2.74 CRISIL B-/Stable (Withdrawn)
Term Loan 2.76 CRISIL B-/Stable (Withdrawn)
Bipin was set up in 1979 as a partnership concern by Mr. Hemant
Revankar and his brother Mr. Dilip Revankar and was later
reconstituted into a private limited company. The company
manufactures solar water heaters, solar photovoltaic lights,
food-processing equipment such as blenders, pulpers, roasters,
frying pans and kettles, and storage tanks.
BOMBAY FANCY: Ind-Ra Migrates B+ Issuer Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Bombay Fancy
Store's (BFS) Long-Term Issuer Rating at 'IND B+'. The Outlook is
Stable. The ratings have also been migrated to the non-
cooperating category. The issuer did not participate in the
surveillance exercise, despite continuous requests and follow-ups
by the agency. Thus, the rating is on the basis of best available
information. Investors and other users are advised to take
appropriate caution while using these ratings. The rating will
now appear as 'IND B+ (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating actions are:
-- INR230 mil. Fund-based working capital limits affirmed and
migrated to Non-Cooperating Category with IND B+ (ISSUER NOT
COOPERATING) /Stable/IND A4 (ISSUER NOT COOPERATING) rating;
-- INR230 mil. Non-fund-based working capital limits affirmed
and migrated to Non-Cooperating Category with IND A4 (ISSUER
NOT COOPERATING) rating;
-- INR40 mil. Proposed fund-based working capital limits is
withdrawn (the company did not proceed with the instrument as
envisaged) and the rating is withdrawn.
Note: ISSUER NOT COOPERATING: Issuer did not cooperate; based on
best available information.
KEY RATING DRIVERS
The affirmation reflects BFS' sustained moderate scale of
operations and weak credit metrics. Revenue declined to INR534.83
million in FY17 (FY16: INR743.56 million), however, EBITDA
margins improved to 6.01% (3.71%), interest coverage (operating
EBITDA/gross interest expense) to 1.26x (1.04x) and net leverage
(total adjusted net debt/operating EBITDAR) to 8.14x (12.53x).
The ratings have been migrated to the non-cooperating category as
the company did not provide Ind-Ra with the latest financials and
information related to working capital utilization for the last
two months, despite continuous requests and follow-ups.
RATING SENSITIVITIES
Negative: Decrease in revenue and margins leading to
deterioration in the credit metrics will be negative for the
ratings.
Positive: Significant improvement in revenue and EBITDA margins,
leading to sustained improvement in the credit metrics will be
positive for the ratings.
COMPANY PROFILE
New Delhi-based BFS was set up in 1972 by Mr. Satish Kumar and
Mr. Suresh Kumar. The firm is a del credere agent and stockist
for Indian Oil Corporation Limited's ('IND AAA'/Stable) polymer
products such as high density polyethylene, linear low density
polyethylene, and polypropylene.
CENTECH ENGINEERS: CRISIL Migrates D Rating to Not Cooperating
--------------------------------------------------------------
CRISIL Ratings has been consistently following up with Centech
Engineers Private Limited (CEPL) for obtaining information
through letter dated February 9, 2018 and March 31 2018, among
others, apart from telephonic communication. The issuer, however,
remained non-cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 1.75 CRISIL D (Issuer Not
Cooperating; Rating Migrated)
Cash Credit 8.50 CRISIL D (Issuer Not
Cooperating; Rating Migrated)
Letter of Credit 2 CRISIL D (Issuer Not
Cooperating; Rating Migrated)
Proposed Long Term 0.22 CRISIL D (Issuer Not
Bank Loan Facility Cooperating; Rating Migrated)
Standby Line of 1.25 CRISIL D (Issuer Not
Credit Cooperating; Rating Migrated)
Term Loan 1.28 CRISIL D (Issuer Not
Cooperating; Rating Migrated)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as it is arrived at without any
management interaction and is based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of CEPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on CEPL is
consistent with 'Scenario 1' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BB' rating
category or lower'. Therefore, on account of inadequate
information and lack of management cooperation, CRISIL has
migrated the rating on bank facilities of CEPL to 'CRISIL
D/CRISIL D Issuer Not Cooperating.
CEPL was incorporated in 2006-07 (refers to financial year,
April 1 to March 31) as Contec Airflow Engineers Pvt Ltd by Mr. C
Rama Krishna. Centech designs, consults, and commissions HVAC and
mechanical, electrical, and plumbing projects. Its operations are
currently managed by Mr. C Rama Krishna's son Mr. Pawan Kumar.
CHEMGEMS INDIA: CRISIL Hikes Rating on INR5.13MM Loan to B-
-----------------------------------------------------------
CRISIL Ratings has upgraded its ratings on the bank facilities of
Chemgems India Private Limited (CIPL; part of the Rathi group) to
'CRISIL B-/Stable/CRISIL A4' from 'CRISIL D/CRISIL D'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit/ 4.5 CRISIL B-/Stable (Upgraded
Overdraft facility from 'CRISIL D')
Export Packing Credit 1.8 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
Foreign Currency
Term Loan 5.13 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
Letter of Credit 2.5 CRISIL A4 (Upgraded from
'CRISIL D')
Long Term Loan 2.3 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
Post Shipment Credit 0.1 CRISIL A4 (Upgraded from
'CRISIL D')
Proposed Cash
Credit Limit .67 CRISIL B-/Stable (Upgraded
from 'CRISIL D')
The upgrade reflects timely servicing of instalments on term
loans and foreign currency term loan (FCTL) since November 2017.
The rating reflects the group's large working capital requirement
and susceptibility of operating margin to volatility in raw
material prices. These strengths are partially offset by moderate
business risk profile, supported by promoters' experience in the
engineering goods industry, established client base, diverse
product profile, and above-average financial risk profile because
of a healthy capital structure and comfortable gearing and debt
protection metrics.
Analytical Approach
For arriving at its rating, CRISIL has combined the business and
financial risk profiles of CIPL, Milan Tannery, and Rathi
Chempels Pvt Ltd. This is because all these entities,
collectively referred to as the Rathi group, have a common
management and significant operational linkages.
Key Rating Drivers & Detailed Description
Weakness
* Exposure to intense competition: The leather goods segment is
highly fragmented with limited product differentiation, mainly
due to low entry barrier. Hence, 60-65% of players operate in the
unorganised sector. Domestic manufacturers also have to compete
with players from China, which has a larger presence in the
global market.
* Working capital-intensive operations: Gross current assets have
been over 200 days in the three years ended March due to
stretched receivables. Though credit from suppliers (80-90 days)
helps partially meet the funding gap, reliance on external
borrowing remains high, leading to fully utilised cash credit
limit in the past 12 months.
Strength
* Promoters' extensive experience: Presence of over three decades
in the leather industry and strong regional market presence have
enabled the promoters to develop healthy relationship with
suppliers and customers, bag new orders, and ramp up operations.
Outlook: Stable
CRISIL believes the Rathi group will continue to benefit from its
established market position in the leather industry. The outlook
may be revised to 'Positive' if higher-than-expected growth in
revenue and accretion to reserve, and efficient working capital
management strengthen financial risk profile. The outlook may be
revised to 'Negative' if significant decline in revenue and
profitability, increase in working capital requirement, fresh,
debt-funded capital expenditure, or capital withdrawal weakens
financial risk profile.
The Kolkata-based Rathi group is promoted by Mr Hari Narayan
Rathi and Mr Kishore Rathi. It manufactures and exports leather
bags and wallets; and trades in chemicals and dyes used in the
leather and textile industries in the domestic market. Unit in
Banthala, West Bengal, has installed capacity to process 5.10
lakh bags per month.
DINESH SEAMLESS: CRISIL Withdraws B- Rating on INR6MM Cash Loan
---------------------------------------------------------------
Due to inadequate information, CRISIL Ratings, in line with SEBI
guidelines, had migrated the rating of Dinesh Seamless Tubes
Private Limited (DSTPL) to 'CRISIL B-/Stable/Issuer not
cooperating'. CRISIL has withdrawn its rating on bank facility of
DSTPL following a request from the company and on receipt of a
'no dues certificate' from the banker. Consequently, CRISIL is
migrating the ratings on bank facilities of DSTPL from 'CRISIL B-
/Stable/Issuer Not Cooperating to 'CRISIL B-/Stable'.The rating
action is in line with CRISIL's policy on withdrawal of bank loan
ratings.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 6 CRISIL B-/Stable (Migrated from
'CRISIL B-/Stable Issuer Not
Cooperating'; Rating Withdrawn)
Proposed Long Term 1 CRISIL B-/Stable (Migrated from
Bank Loan Facility 'CRISIL B-/Stable Issuer Not
Cooperating'; Rating Withdrawn)
DSTPL, incorporated in 2009, is managed by Mr Champaklal K Shah.
The company trades in carbon steel seamless pipes and alloy steel
seamless pipes. It is based in Mumbai.
ELKAYPEE SPINNERS: Ind-Ra Maintains BB- Rating in Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Elkaypee
Spinners Private Limited's Long-Term Issuer Rating in the non-
cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
continue to appear as 'IND BB- (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating actions are:
-- INR60 mil. Fund-based working capital limit maintained in
Non-Cooperating Category with IND BB- (ISSUER NOT
COOPERATING) rating;
-- INR52.6 mil. Long-term loans maintained in Non-Cooperating
Category with IND BB- (ISSUER NOT COOPERATING) rating; and
-- INR6.90 mil. Non-fund-based working capital limit maintained
in Non-Cooperating Category with IND A4+ (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
March 16, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Elkaypee Spinners has a total installed capacity of 20,800
spindles and produces poly-cotton blended yarn, mainly in 30-40
counts.
GAURAV EXPORTRADES: CRISIL Assigns B- Rating to INR2MM Loan
-----------------------------------------------------------
CRISIL has assigned its 'CRISIL B-/Stable/CRISIL A4' ratings to
the bank facilities of Gaurav Exportrades Private Limited (GEPL).
The rating reflects the small scale of operations amidst intense
competition in the readymade garments (RMG) industry, weak
liquidity profile and average financial risk profile. These
rating weaknesses are partially offset by the experience of the
promoter in the RMG industry.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Packing Credit 15 CRISIL A4 (Assigned)
Cash Credit 2 CRISIL B-/Stable (Assigned)
Foreign Letter
of Credit 2 CRISIL B-/Stable (Assigned)
Key Rating Drivers & Detailed Description
Weaknesses
* Small scale of operations amidst intense competition in the
highly fragmented RMG industry: The RMG industry is highly
fragmented and the company faces intense competition from
organised and unorganised players, both in the domestic market
and in South East Asia. Also, the scale of operations remains
small with revenues of around INR22.14 crore for fiscal 2017.
* Weak liquidity profile: Liquidity profile is constrained by
modest cash accruals against which the company has term loan
repayment obligations. Cash accruals were at around INR0.57 crore
for fiscal 2017. Further, the liquidity is constrained by long
collection cycle, reflected by debtor days of 181 days as on
March 31, 2017.
* Average financial risk profile: The financial risk profile is
average, as reflected in a gearing of around 1.37 times as on
March 31, 2017. The debt protection metrics were below average,
with an interest cover of around 1.19 times for fiscal 2017.
Strength
* Extensive experience of the promoter in the RMG industry: The
nearly three decade-long experience of the promoter, Mr Mahesh
Kumar Gupta in the RMG industry, and his strong relationships
with customers and suppliers should continue to benefit the
company over the medium term.
Outlook: Stable
CRISIL believes GEPL will continue to benefit from the extensive
experience of its proprietor. The outlook may be revised to
'Positive' in case of a substantial growth in revenue and
profitability. The outlook may be revised to 'Negative' if a
decline in profitability, stretch in working capital cycle or any
major capital expenditure plan, weakens the financial risk
profile.
GEPL was set up by Mr. Mahesh Kumar Gupta in 1991.The company
manufactures and exports knitted garments, and has a facility at
Tirupur, Tamil Nadu.
HIGHBAR TECHNOLOGIES: CARE Reaffirms D Rating on INR19.57cr Loan
----------------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Highbar Technologies Limited (HTL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 19.57 CARE D INC revoked and Rating
Facilities Reaffirmed
INC: Issuer not cooperating
Detailed Rationale & Key Rating Drivers
The reaffirmation of the rating assigned to the bank facilities
of HTL takes into account the ongoing delays in servicing the
debt obligations on the long term bank facilities availed.
Detailed description of the key rating drivers
Delays in Debt Servicing: The weak liquidity has constrained the
company's ability to service its debt in a timely manner and
there have been continuing delays in servicing of debt
obligations to the lenders.
Highbar Technologies Limited (HTL), a 100% subsidiary of
Hindustan Construction Company Ltd (HCC; rated CARE D for its
bank facilities and instruments), was formed in 2009 by spinning
off the IT department of HCC-one of the largest infrastructure
development companies which has implemented Enterprise Resource
Planning (ERP) as well as other Information Technology (IT)
solutions to connect all its project locations on SAP platform.
Information technology is very crucial for the infrastructure
sector, considering multiple locations and projects that the
companies operate in. Thus, HCC leveraged its technical expertise
in the infrastructure sector to provide end to end IT services to
infrastructure clients. HTL's business mainly involves
developing, designing, marketing of supporting services, products
and accessories used in field of IT.
HINDUSTAN CONSTRUCTION: CARE Reaffirms D on INR4775.8cr Loan
------------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Hindustan Construction Company Limited (HCC), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 1607.53 CARE D INC revoked and Rating
Facilities-Term Reaffirmed
Loan
Long term Bank 1065.38 CARE D INC revoked and Rating
Facilities-Cash Reaffirmed
Credit
Long term/Short 4775.80 CARE D INC revoked and Rating
term Bank Reaffirmed
Facilities-Non
Fund based
Non-Convertible 46.73 CARE D INC revoked and Rating
Debenture I Reaffirmed
Non-Convertible 56.07 CARE D INC revoked and Rating
Debenture II Reaffirmed
INC: Issuer not cooperating
Detailed Rationale & Key Rating Drivers
The reaffirmation of the ratings assigned to the bank facilities
and instruments of HCC takes into account the ongoing delays in
servicing the debt obligations. The debt servicing capability of
the company is stressed on account of a high debt burden and
resultant finance costs being incurred along with stressed
working capital cycle on account of delayed receipt of dues and
claim settlement from customers. Pursuant to the directive of
NITI Aayog, the receipt of 75% arbitral award has reduced the
total debt outstanding; however the delays in repayments still
persist.
Detailed description of the key rating drivers
Delays in Debt Servicing: There are on-going delays in servicing
of term loans and there are instances of overdrawals and
devolvement in fundbased and non-fund based limits ranging
between 30 to 90 days. Elongated working capital cycle: The
working-capital cycle of the company continues to be elongated
owing to delays in recoveries from customers and high amount of
inventory held due to delays in commencement of projects.
HCC was promoted by the late Mr. Walchand Hirachand in 1926 and
is presently spearheaded by Mr. Ajit Gulabchand, Chairman and
Managing Director. HCC is one of the large construction companies
in India, engaged in construction activities which include roads,
bridges, ports, power stations, water supply and irrigation
projects. The company's construction capabilities include
solutions for construction of projects in various complex
industries including hydel power, water solution systems, nuclear
power and process plants and transportation.
HCC group of companies comprises mainly of HCC Infrastructure
Company Limited (HICL), HCC Real Estate Limited (HREL), Lavasa
Corporation Limited (LCL), Steiner AG, Zurich (SAG), and Highbar
Technologies Limited (HTL). HICL is engaged in construction and
management of assets in the areas of transportation. HREL
develops and executes high-value real estate projects including
Integrated Urban Development and Management, IT Parks and
Commercial Offices, Township Development, and Urban Renewal
projects. LCL is India's first planned hill city which includes
integrated development of five towns. SAG specializes in turnkey
development of new buildings and refurbishments, and offers
services in all facets of real estate development and
construction. HTL provides IT solutions to the infrastructure
industry.
HOTEL MIRAMAR: Ind-Ra Assigns BB- Issuer Rating, Outlook Stable
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Hotel Miramar a
Long-Term Issuer Rating of 'IND BB-'. The Outlook is Stable.
The instrument-wise rating action is:
-- INR75 mil. Term loan due on May 2027 assigned with IND BB-
/Stable rating.
Ind-Ra has taken a consolidated view of Mirasol Resorts
comprising Hotel Miramar, Kalyan Resorts ('IND BB-'/Stable) and
Miramar Resorts Private Limited ('IND BB-'/Stable) while
assigning the ratings on account of strong operational linkages
among them. All three companies also have common promoters and
operate in the similar line of business.
KEY RATING DRIVERS
The ratings reflect the group's small scale of operations and
moderate credit metrics owing to intense competition in the
hospitality business. In FY17, consolidated revenue grew to
INR392 million (FY16: INR361 million) on account of an increase
in customers. Ind-Ra expects revenue is likely to have declined
in FY18 on account of a reduction in water park customers,
following the opening of a new water park in Surat in FY17.
In FY17, gross interest coverage (operating EBITDA/gross interest
expense) improved to 3.1x (FY16: 2.8x) owing to an improvement in
absolute EBITDA. Net leverage (net adjusted debt/operating
EBITDAR) was stable at 2.8x (2.8x).
The ratings, however, are supported by the group's strong
operating EBITDA margin, which expanded to 33.5% in FY17 (FY16:
29.8%), on account of the increase in revenue and reduction in
operating expenses. Ind-Ra expects the margins are likely to have
improved in FY18 on account of the reduction in operating
expenses.
The ratings are also supported by Mirasol Resorts' more than
three decades of experience in the hospitality industry.
RATING SENSITIVITIES
Negative: A sustained decline in revenue and EBITDA margin,
leading to deterioration in the credit metrics, will be negative
for the ratings.
Positive: A sustained increase in revenue and EBITDA margin,
leading to an improvement in the credit metrics, will be positive
for the ratings.
COMPANY PROFILE
Mirasol Resorts is one of the reputed hotel, resort and water
park in Daman, Gujarat. During FY17, Hotel Miramar booked revenue
of INR167 million, while Kalyan Resorts and Miramar Resorts
Private Limited reported revenue of INR155 million and INR70
million, respectively.
ITMS INDIA: Ind-Ra Migrates BB- Issuer Rating to Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated ITMS India
Private Limited's (ITMSIPL) Long-Term Issuer Rating to the non-
cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
now appear as 'IND BB- (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating actions are:
-- INR75 mil. Fund-based working capital facility migrated to
non-cooperating category with IND BB- (ISSUER NOT
COOPERATING) /IND A4+ (ISSUER NOT COOPERATING) rating; and
-- INR25 mil. Non-fund-based working capital facility migrated
to non-cooperating category with IND A4+ (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
May 15, 2017. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in October 2012, ITMSIPL is a Delhi-based company
engaged in signage and offset printing industry.
JASMINE EXIM: CRISIL Assigns B+ Rating to INR2MM Proposed Loan
--------------------------------------------------------------
CRISIL has assigned its 'CRISIL B+/Stable' rating to the long-
term bank facility of Jasmine Exim (JE).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Proposed Overdraft
Facility 2 CRISIL B+/Stable
The rating reflects the firm's small scale of operations and
geographical concentration in revenue profile. These weaknesses
are partially offset by the extensive experience of the
proprietor and moderate financial risk profile.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations: The scale of operations is small,
with revenues of around INR7.61 crore in fiscal 2018. This limits
the bargaining power of the firm with its customers and makes it
susceptible to competition from other players.
* Geographical concentration in revenue profile: Most of the
firm's customers are in European countries, which deems JE's
revenues susceptible to the economic state of affairs in Europe.
Any change in the demand from the European region could impact
JE's revenues.
Strength
* Extensive experience of proprietor: The proprietor, Mr. Jenish
Raj and his family have been in the tyre, vegetable trading and
real estate segments through other entities for over three
decades. Mr.Jenish Raj also has extensive understanding of the
European industries which should continue to benefit the firm
over the medium term.
* Moderate financial risk profile: JE has a moderate financial
risk profile, as reflected in a gearing of around 1.2 times as on
March 31, 2017. The debt protection metrics are comfortable, as
reflected in an interest cover of 2.88 times for fiscal 2017.
Outlook: Stable
CRISIL believes JE will continue to benefit from the experience
of its proprietor. The outlook may be revised to 'Positive' if
significant ramp up in operations improves profitability. The
outlook may be revised to 'Negative' if decline in revenue or
deterioration in working capital cycle weakens financial risk
profile.
Set up in Chennai as a proprietorship firm by Mr. Jenish Raj in
2016, JE trades in industrial suits and is a supplier to
organizations in Europe.
JAVERY INCORPORATION: CRISIL Assigns B+ Rating to INR7.5MM Loan
---------------------------------------------------------------
CRISIL Ratings has assigned its 'CRISIL B+/Stable' rating to the
long term bank facility of Javery Incorporation (JI).
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 7.5 CRISIL B+/Stable (Assigned)
The rating reflects modest scale of operations in the intensely
competitive segment, large working capital requirements and below
average financial risk profile. These weaknesses are partially
offset by the extensive experience of the promoters in the home
appliances trading segment.
Analytical Approach
Unsecured loans from promoter and family members are treated as
neither debt nor equity.
Key Rating Drivers & Detailed Description
Weaknesses:
* Modest scale of operations and intense competition: Revenues
are modest with revenues of INR19.67 crore in fiscal 2018, on
account of intense competition and regional presence of the firm.
With new principal and regions being added, revenues are expected
to increase, yet remain modest.
* Large working capital requirement: Gross current assets were
sizeable at 352 days as on March 31, 2018, driven by high
inventory and large debtors of 160 days and 197 days,
respectively. This is on account of large credit period offered
to customers and large variety of products. This leads to high
utilisation of bank lines.
* Weak financial risk profile: Networth was modest at INR1.58
crore as on March 31, 2018, and total outside liabilities to
adjusted networth ratio high at 9.7 times. Interest coverage and
net cash accrual to total debt ratios were subdued at 1.09 times
and 0.01 time, respectively, in fiscal 2018. Financial risk
profile may remain constrained over the medium term, with modest
cash accrual and large working capital debt.
Strengths:
* Experience of proprietors: Benefits derived from the
proprietors' experience of around 12 years and healthy relations
with customers and suppliers should continue to support the
business.
Outlook: Stable
CRISIL believes that JI will continue to benefit over the medium
term from its promoters extensive industry experience. The
outlook may be revised to 'Positive'' if significant improvement
in revenues while maintaining profitability, or substantial
capital infusion by the promoter, leads to better financial risk
profile. The outlook may be revised to Negative' if decline in
revenues or profitability, or increase in working capital
requirements leads to deterioration in financial profile and
liquidity
JI, established as a proprietorship firm in 2007 by Mr. Gaurav
Javery, is based in Nagpur (Maharashtra). The firm distributes
consumer electronics and home appliances of various brands like
Samsung, Voltas, Hitachi, Symphony, amongst others.
KALYAN RESORTS: Ind-Ra Assigns BB- Issuer Rating, Outlook Stable
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Kalyan Resorts a
Long-Term Issuer Rating of 'IND BB-'. The Outlook is Stable.
The instrument-wise rating action is:
-- INR342.7 mil. Term loan due on March 2028 assigned with IND
BB-/Stable rating;
-- INR10 mil. Fund based facilities assigned with IND BB-
/Stable/IND A4+ rating; and
-- INR2 mil. Non-fund based facilities assigned with IND A4+
rating.
Ind-Ra has taken a consolidated view of Mirasol Resorts
comprising Kalyan Resorts, Hotel Miramar ('IND BB-'/Stable) and
Miramar Resorts Private Limited ('IND BB-'/Stable) while
assigning the ratings on account of strong operational linkages
among them. All three companies also have common promoters and
operate in the similar line of business.
KEY RATING DRIVERS
The ratings reflect the group's small scale of operations and
moderate credit metrics owing to intense competition in the
hospitality business. In FY17, consolidated revenue grew to
INR392 million (FY16: INR361 million) on account of an increase
in customers. Ind-Ra expects revenue is likely to have declined
in FY18 on account of a reduction in water park customers,
following the opening of a new water park in Surat in FY17.
In FY17, gross interest coverage (operating EBITDA/gross interest
expense) improved to 3.1x (FY16: 2.8x) owing to an improvement in
the absolute EBITDA. Net leverage (net adjusted debt/operating
EBITDAR) was stable at 2.8x (2.8x).
The ratings, however, are supported by the group's strong
operating EBITDA margin, which expanded to 33.5% in FY17 (FY16:
29.8%), on account of the increase in revenue and reduction in
operating expenses. Ind-Ra expects the margins are likely to have
improved in FY18 on account of the reduction in operating
expenses.
The ratings are also supported by Mirasol Resorts' more than
three decades of experience in the hospitality industry.
RATING SENSITIVITIES
Negative: A sustained decline in revenue and EBITDA margin
leading to deterioration in the credit metrics will be negative
for the ratings.
Positive: A sustained increase in revenue and EBITDA margin
leading to an improvement in the credit metrics will be positive
for the ratings.
COMPANY PROFILE
Mirasol Resorts is one of the reputed hotel, resort and water
park in Daman, Gujarat. During FY17, Kalyan Resorts booked
revenue of INR155 million, while Hotel Miramar and Miramar
Resorts Private Limited reported revenue of INR167 million and
INR70 million, respectively.
KH FOGES: CRISIL Withdraws B Rating on INR5MM Cash Loan
-------------------------------------------------------
Due to inadequate information, CRISIL Ratings, in line with SEBI
guidelines, had migrated the rating of KH Foges India Private
Limited (KHFIPL) to 'CRISIL B/Stable/CRISIL A4/Issuer not
cooperating'. CRISIL has withdrawn its rating on bank facility of
KHFIPL following a request from the company and on receipt of a
'no dues certificate' from the banker. Consequently, CRISIL is
migrating the ratings on bank facilities of KHFIPL from 'CRISIL
B/Stable/CRISIL A4/Issuer Not Cooperating to 'CRISIL
B/Stable/CRISIL A4'. The rating action is in line with CRISIL's
policy on withdrawal of bank loan ratings.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 5 CRISIL B/Stable (Migrated from
'CRISIL B/Stable Issuer Not
Cooperating; Rating Withdrawn)
Letter Of Guarantee 5 CRISIL A4 (Migrated from
'CRISIL A4 Issuer Not
Cooperating'; Rating Withdrawn)
KHFIPL was incorporated in 2013 by Mr. Anil Agarwal and is a
subsidiary of K H Foges Pte Ltd. It undertakes construction and
piling activities for building and roads. It started its
commercial operations in January 2015.
KVK BIO: Ind-Ra Migrates 'D' LT Issuer Rating to Non-Cooperating
----------------------------------------------------------------
India Ratings has migrated KVK Bio Energy Private Limited's
(KBEL) term loan to the non-cooperating category. The issuer did
not participate in the rating exercise despite continuous
requests and follow-ups by the agency. Therefore, investors and
other users are advised to take appropriate caution while using
the rating. The rating will now appear as 'IND D (ISSUER NOT
COOPERATING)' on the agency's website.
The instrument-wise rating action is:
-- INR35 mil. Working capital facility (long-term) migrated to
Non-Cooperating Category with IND D (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The rating was last reviewed on
March 27, 2017. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the rating.
COMPANY PROFILE
KBEPL, sponsored by MMS Steel & Power Pvt Ltd (95% stake) and KVK
Energy & Infrastructure Private Limited (5% stake), owns a 15MW
biomass-based power plant in Chhattisgarh.
MIRAMAR RESORTS: Ind-Ra Assigns BB- Issuer Rating, Outlook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Miramar Resorts
Private Limited (MRPL) a Long-Term Issuer Rating of 'IND BB-'.
The Outlook is Stable.
The instrument-wise rating action is:
-- INR4.679 bil. Term loan due on March 2019 assigned with IND
BB-/Stable rating;
-- INR2 mil. Fund-based facilities assigned with IND BB-
/Stable/IND A4+ rating; and
-- INR3 mil. Non-fund-based facilities assigned with IND A4+
rating.
Ind-Ra has taken a consolidated view of Mirasol Resorts
comprising MRPL, Hotel Miramar ('IND BB-'/Stable) and Kalyan
Resorts ('IND BB-'/Stable) while assigning the ratings on account
of strong operational linkages among them. All three companies
also have common promoters and operate in the similar line of
business.
KEY RATING DRIVERS
The ratings reflect the group's small scale of operations and
moderate credit metrics owing to intense competition in the
hospitality business. In FY17, consolidated revenue grew to
INR392 million (FY16: INR361 million) on account of an increase
in customers. Ind-Ra expects revenue is likely to have declined
in FY18 on account of a reduction in water park customers,
following the opening of a new water park in Surat in FY17.
In FY17, gross interest coverage (operating EBITDA/gross interest
expense) improved to 3.1x (FY16: 2.8x) owing to an improvement in
the absolute EBITDA. Net leverage (net adjusted debt/operating
EBITDAR) was stable at 2.8x (2.8x).
The ratings, however, are supported by the group's strong
operating EBITDA margin, which expanded to 33.5% in FY17 (FY16:
29.8%), on account of the increase in revenue and reduction in
operating expenses. Ind-Ra expects the margins are likely to have
improved in FY18 on account of the reduction in operating
expenses.
The ratings are also supported by Mirasol Resorts' more than
three decades of experience in the hospitality industry.
RATING SENSITIVITIES
Negative: A sustained decline in revenue and EBITDA margin
leading to deterioration in the credit metrics will be negative
for the ratings.
Positive: A sustained increase in revenue and EBITDA margin
leading to an improvement in the credit metrics will be positive
for the ratings.
COMPANY PROFILE
Mirasol Resorts is one of the reputed hotel, resort and water
park in Daman, Gujarat. During FY17, MRPL booked revenue of INR70
million, while Hotel Miramar and Kalyan Resorts reported revenue
of INR167 million and INR155 million, respectively.
NAGAYYA MAKKIMANE: CARE Assigns B+ Rating on INR5cr LT Loan
-----------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of
Nagayya Makkimane Shetty (NMS), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facility 5.00 CARE B+; Stable Assigned
Detailed Rationale& Key Rating Drivers
The rating assigned to the bank facilities of NMS are tempered by
small scale of operations with low net worth base, moderate
capital structure and debt coverage indicators, working capital
intensive nature of operations and profitability margins are
susceptible to fluctuation in the prices of materials,
constitution of entity as a proprietorship firm with inherent
risk of withdrawal of capital, tender based nature of operations
and short term revenue visibility from order book position with
high geographic concentration risk. The rating is, however,
underpinned by established track record and long experience of
proprietor in the construction industry, growth in total
operating income during the review period, satisfactory
profitability margins albeit declining during the review period
and stable outlook for construction industry.
Going forward, ability of the firm to increase its scale of
operations, improve its profitability margins in the competitive
environment. Ability of the firm to improve its capital
structure, debt coverage indicators and collect payment from
government bodies in timely manner and ability of the firm to
diversify its geographic reach would be key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Small scale of operations with low net worth base: The firm has a
track record of close to fifteen years however, the total
operating income (TOI), remained small at INR12.34 crore in FY17
with low net worth base of INR2.23 crore as on March 31, 2017 as
compared to other peers in the industry. Moderate capital
structure and weak debt coverage indicators The capital structure
of the firm remained moderate marked by overall gearing ratio of
1.30x as on March 31, 2017 as against 0.66x as on March 31, 2015
at the back of increase in debt levels on account of increase in
working capital utilizations to support the increase in scale of
operations. The debt profile of the firm as on March 31, 2017
comprises of vehicle loans (12%), working capital bank borrowings
(69%) and unsecured loans from relatives and other parties (19%).
The debt coverage indicators of the firm marked by total debt/GCA
has been deteriorating y-o-y from 4.06x in FY15 to 6.05x in FY17
and remained moderate due to increase in working capital
requirements to meet the day to day operations coupled with low
cash accruals. Furthermore, the PBILDT interest coverage ratio
has seen fluctuating during the review period. The PBILDT
interest coverage ratio has increased from 4.42x in FY15 to 5.10x
in FY16 due to increase in operating profit resulted in
absorption of financial expense, Moreover, the PBILDT Interest
coverage ratio decreased to 4.72x in FY17 due to increase in
financial expenses on account of increase in working capital
utilizations.
Working capital intensive nature of operations: The operations of
the firm is working capital intensive since the firm is engaged
in civil construction works primarily for various government
departments wherein receipt of payments for works completed takes
around 2-3 months and the firm makes payment to its suppliers
within one month due to low bargaining power. The operating cycle
stood at 64 days during FY17 due to high collection days. The
average utilization of over draft facility was 90% in the last 12
months ended with April 30, 2018.
Constitution of entity as a proprietorship firm with inherent
risk of withdrawal of capital With the entity being
proprietorship firm there is an inherent risk of instances of
capital withdrawal by proprietor resulting in lesser of entity's
net worth. Further the proprietorship firms are attributed to
limited access to funding. Furthermore, the proprietor has
withdrawn INR0.12 crore during FY17 for personal use. Tender
based nature of operations and profitability margins are
susceptible to fluctuation in the prices of materials The firm
receives most of its work orders from government organizations
which are tender-based. The revenues of the firm are dependent on
the ability of the proprietor to bid successfully for the tenders
and execute the same effectively. However the proprietors' long
experience in the industry for more than three decades mitigates
the risk to some extent. Nevertheless, there are numerous
fragmented & unorganized players operating in the segment which
makes the civil construction space highly competitive.
Furthermore, the profitability margins also come under pressure
because competitive nature of tender based contracts works of the
firm. The profitability margins are susceptible due to
fluctuations in the prices of materials and absence of price
variation clause.
Short term revenue visibility from order book position with high
geographic concentration risk: The firm has an order book of
around INR15.55 crore as on May 10, 2018 which translates 1.23x
of the total operating income of FY17 and the same is like to be
completed by March 2019. The said order book is related to
construction and improvements of roads and drains. However the
orders in hand provide revenue visibility to the firm for short
term. The firm is providing its services only in Karnataka state
resulted in high geographic concentration risk. Furthermore, the
firm has submitted tenders for around INR54.00 crore for which
the firm is waiting for confirmation from the department.
Key Rating Strengths
Established track record and long experience of proprietor in the
construction industry: NMS has a track record of around fifteen
years in the execution of civil construction works. The firm is
actively managed by Mr. Nagayya Makkimane Shetty who is the
proprietor of the firm. He is a qualified graduate in BE (Civil
Engineering).
He has more than three decades of experience in executing works
for PWD. Previously, the promoter used to work as Executive
Engineer in PWD Department for more than two decades. The firm
has established good relationship with suppliers and customers
due to presence in the business for a longer period of time.
Growth in total operating income during the review period: The
total operating income of the firm has been increasing year-on-
year and doubled from INR5.72 crore in FY15 to INR12.34 crore in
FY17 due to increase in number of contracts received and executed
in timely manner. Furthermore, the firm has achieved total
operating income of INR25 crore in FY18 (Prov.).
Satisfactory profitability margins albeit declining during review
period: The profitability margins of the firm have remained
satisfactory albeit declining during the review period. The
PBILDT margin has been declined from 8.07% in FY15 to 6.35% in
FY17 due to increase in the prices of material, labor costs and
increase in sub-contract payments.
Furthermore, the PAT margin of the firm also seen declining from
4.20% in FY15 to 3.26% in FY17 due to increase in the
proportionate of net profit is less than increase in the
proportionate of operating profit in absolute terms due to
increase in interest and depreciation cost Stable outlook for
construction industry.
The construction industry contributes around 8% to India's Gross
domestic product (GDP). Growth in infrastructure is critical for
the development of the economy and hence, the construction sector
assumes an important role. The sector was marred by varied
challenges during the last few years on account of economic
slowdown, regulatory changes and policy paralysis which had
adversely impacted the financial and liquidity profile of players
in the industry. The Government of India has undertaken several
steps for boosting the infrastructure development and revives the
investment cycle. The same has gradually resulted in increased
order inflow and movement of passive orders in existing order
book. The focus of the government on infrastructure development
is expected to translate into huge business potential for the
construction industry in the long-run. In the short to medium
term (1-3 years), projects from transportation and urban
development sector are expected to dominate the overall business
for construction companies. The implementation of Goods and
Service Tax might result in short run operational issues and
pressure on working capital until the process is streamlined.
Going forward, companies with better financial flexibility would
be able to grow at a faster rate by leveraging upon potential
opportunities.
Karnataka based, Nagayya Makkimane Shetty (NMS) was established
as a proprietorship firm in 2005 by Mr. Nagayya Makkimane Shetty.
NMS is engaged in civil construction works like construction and
improvements of roads and drainage works relating to Public Works
Department (PWD), Directorate of Municipal Administration (DMA),
Karnataka Power Corporation Limited (KPCL), City Municipal
Council (CMC), Panchayatiraj Engineering Department (PRED),
Mangaluru City Corporation (MCC) etc in the Karnataka state. The
firm purchases materials like cement, steel, metal and Tar from
local suppliers located in and around Karnataka. NMS procures
work orders through online government tender websites. Till now
the firm has completed around 250 projects with the total value
of around INR50 crore
NATIONAL TRADING: CRISIL Reaffirms B+ Rating on INR5MM Loan
-----------------------------------------------------------
CRISIL has reaffirmed its rating on the long-term bank facility
of National Trading Company (NTC) at 'CRISIL B+/Stable'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Working Capital
Facility 5 CRISIL B+/Stable (Reaffirmed)
The rating reflects modest scale of operations, below-average
financial risk profile and large working capital requirements.
These weaknesses are partially offset by the extensive experience
of its promoters in the electrical product distribution business
and established relationship with principals.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations: With revenue of INR45 crore in
fiscal 2017 and estimated revenue of INR51 crore in fiscal 2018,
scale remains small in the intensely competitive lightening and
electrical components distribution industry characterised by
numerous small scale traders and wholesalers, owing to low entry
barriers.
* Large working capital requirements: The firm has large working
capital requirements as reflected in estimated gross current
assets of 185 days as on March 31, 2018. The working capital
cycle is mainly driven by high debtors of 100-110 days and
moderate inventory of 80-85 days. Working capital requirements
will continue to remain high over the medium term.
* Below average financial profile: As on March 31, 2018, networth
was estimated to be small at INR5 crore and aggressive capital
structure marked by total outside liabilities to total networth
of 4-4.15 times respectively as on March 31, 2018. The debt
protection metrics is weak as reflected in by its interest
coverage and net cash accruals to total debt ratios 1.9-2 times
and 0.05 time, respectively, for fiscal 2018. With large
incremental working capital, financial profile is expected to
remain at similar levels.
Strengths
* Extensive experience of promoters and established relationship
with suppliers: Presence of over three decades in the electrical
goods trading and distribution industry in Kerala has enabled the
promoters to establish healthy relationship with customers and
reputed principals such as Philips India and L&T Switchgears.
Outlook: Stable
CRISIL believes NTC will continue to benefit from the extensive
experience of its partners and established relationship with
principals. The outlook may be revised to 'Positive' if increase
in scale of operations and profitability improves cash accrual
and better financial risk profile. The outlook may be revised to
'Negative' if low cash accrual, or sizeable working capital
requirement or capital withdrawals further weakens financial risk
profile, particularly liquidity.
Setup as a partnership firm in 1993, NTC is a distributor and
retailer of lighting products of Philips India Ltd and electrical
products of L&T Switchgears. The firm is based out of Ernakulum,
Kerala and was promoted by Mr. Sree Prasad and his wife, Mrs. K
Sona.
NC JOHN: Ind-Ra Affirms BB+ LT Issuer Rating, Outlook Stable
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed N.C.John & Sons
(P) Ltd.'s (NCJ) Long-Term Issuer Rating at 'IND BB+'. The
Outlook is Stable.
The instrument-wise rating actions are:
-- INR340 mil. (increased from INR275 mil.) Fund-based
facilities affirmed with IND BB+/Stable/IND A4+ rating; and
-- INR26 mil. Non-fund-based working capital facility assigned
with IND A4+ rating.
KEY RATING DRIVERS
The affirmation reflects NCJ's modest scale of operations and
modest credit metrics. The revenue rose to INR1,863 million in
FY18 (provisional financials) from INR1,711 million in FY17. The
rise in the revenue was on account of an increase in repeat
orders from existing customers. As of April 2018, NCJ had an
order book of INR601.85 million to be executed within the next
four months. Ind-Ra expects NCJ's revenue to grow in FY19-FY20 on
account of the management's focus on customer base expansion. On
average, floor coverings and garments contributed 85% and 15% to
the revenue during FY16-FY17, respectively. Its EBITDA margin was
8.7% in FY18 (FY17: 8.8%).
Moreover, NCJ's net leverage deteriorated to 2.5x in FY18 from
2.3x in FY17 because of a significant increase in debt. Its
EBITDA interest cover also deteriorated to 4.7x in FY18 from 5.0x
in FY17 due to a proportionally higher increase in gross interest
expenses than that in EBITDA. Ind-Ra expects the credit metrics
to improve marginally in FY19 on account of a likely improvement
in the operating EBITDA due to an increasing demand for its end-
products.
The ratings, however, continue to be supported by the promoters'
over seven-decade experience in manufacturing floor coverings.
The ratings also continue to be supported by NCJ's comfortable
liquidity, indicated by an average fund-based limit utilization
of 75.8% for the 12 months ended March 2018.
RATING SENSITIVITIES
Negative: Any further decline in the profitability resulting in
any deterioration in the credit metrics on a sustained basis will
lead to a negative rating action.
Positive: Substantial revenue growth and a rise in the
profitability leading to an improvement in the credit metrics on
a sustained basis will lead to a positive rating action.
COMPANY PROFILE
Incorporated in 1943, NCJ is engaged in the manufacturing of
floor coverings made of coir, jute, rubber and sisal. NCJ
incurred a capex of INR70 million, funded by internal accruals,
in FY18 on the purchase of oil mat printing machinery, which has
a daily production capacity of 7,000 mats. NCJ generates 95% of
its revenue from exports to the EU and the US.
P.C. THOMAS: CRISIL Withdraws B+ Rating on INR8.5MM Cash Loan
-------------------------------------------------------------
CRISIL Ratings has been consistently following up with P.C.
Thomas & Co. (PCTC) for obtaining information through letters and
emails dated September 21, 2017, and October 26, 2017, among
others, apart from telephonic communication. However, the issuer
has remained non-cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Bank Guarantee 13.5 CRISIL A4 (Issuer Not
Cooperating; Rating Withdrawn)
Cash Credit 8.5 CRISIL B+/Stable (Issuer Not
Cooperating; Rating Withdrawn)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as they are arrived at without any
management interaction and are based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of PCTC. This restricts CRISIL's
ability to take a forward PCTC is consistent with 'Scenario 1'
outlined in the 'Framework for Assessing Consistency of
Information with CRISIL BB rating category or lower. Based on the
last available information, the rating on bank facilities of PCTC
continues to be 'CRISIL B+/Stable/CRISIL A4 Issuer Not
Cooperating'.
CRISIL has withdrawn its ratings on the bank facilities of PCTC
on the request of the company and receipt of a no objection / due
certificate from its bank. The rating action is in line with
CRISIL's policy on withdrawal of its ratings on bank loans.
PCTC was established by the late Mr P C Thomas in 1964 as a
partnership firm in Mamangalam, Kochi. The firm undertakes civil
construction work for the Central Public Works Department and
other central government departments. Mr Paul Thomas is its
managing director.
PARIN GEMS: Ind-Ra Affirms BB- LT Issuer Rating, Outlook Stable
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Parin Gems' (PG)
Long-Term Issuer Rating at 'IND BB-'. The Outlook is Stable.
The instrument-wise rating action is:
-- INR217.2 mil. Fund-based facilities - cash credit affirmed
with IND BB-/Stable/IND A4+ rating.
KEY RATING DRIVERS
The affirmation reflects PG's continued modest credit metrics
owing to intense competition. Its interest coverage improved to
1.7x in FY18 (provisional financials) from 1.5x in FY17,
primarily driven by a decrease in the interest expenses to INR22
million from INR33 million during the period. Its net leverage
deteriorated to 5.9x in FY18 from 4.9x in FY17, mainly due to a
decline in absolute EBITDA to INR38 million from INR44 million
during the period and a slight rise in debt. Its EBITDA margin
was nearly flat at 3.4% in FY18 (FY17: 3.5%). The margin stayed
stable at 2.5%-3.5% over FY14-FY18 on account of PG's strategy to
purchase diamonds when the price is low and sell them later at a
higher price.
Moreover, PG's scale of operations remains small. Revenue
declined to INR1,122 million in FY18 from INR1,283 million in
FY17 owing to a fall in the work orders received due to low
market demand. As of May 2018, the firm had an outstanding order
book position of INR144.59 million that would be executed by end-
June 2018.
The ratings continue to be constrained by PG's tight liquidity,
indicated by an average fund-based facility utilization of 98.4%
for the 12 months ended April 2018, owing to an elongated net
working capital cycle of 147 days in FY18 (FY17: 118 days). The
deterioration in the cycle was due to high inventory days.
The ratings, however, continued to be supported by the promoters'
experience of over two decades in the diamond processing
business.
RATING SENSITIVITIES
Negative: A negative rating action could result from any decline
in the operating margin leading to any weakening of the credit
metrics.
Positive: A positive rating action could result from a
significant increase in the revenue and the profitability leading
to an improvement in the credit metrics on a sustained basis.
COMPANY PROFILE
PG is a partnership firm engaged in the cutting and polishing of
diamonds. It is promoted by the Surat-based Moradia family.
RAJA MOTORS: CARE Assigns B+ Rating to INR7.50cr LT Loan
--------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Raja
Motors Sirsa (RMS), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank
Facilities 7.50 CARE B+; Stable Assigned
Short-term Bank
Facilities 0.20 CARE A4 Assigned
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of Raja Motors Sirsa
(RMS) are constrained on account of its financial risk profile
marked by moderate scale of operations, thin profit margins,
moderate debt coverage indicators and moderate liquidity position
in FY17 (refers to the period April 1 to March 31).The ratings
are also constrained due to limited bargaining power with
principal manufacturer, presence in a highly competitive
automobile dealership industry and fortune of the firm linked
with growth of principal automobile manufacturers.
The ratings, however, derive strength from experienced promoters
in dealership industry along with established track record of
operations and association with established player- Hyundai Motor
India Limited (HMIL) and moderately comfortable capital
structure.
The ability of RMS to increase its scale of operations and
increase its profitability along with an improvement in its
solvency position by sourcing working capital funds in a timely
manner would be key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Financial risk profile marked by moderate scale of operations,
thin profit margins, moderate debt coverage indicators and
moderate liquidity position The total operating income (TOI) of
the firm has exhibited fluctuating trend since last three years
ended FY17 and stood moderate at INR53.14 crore during FY17 as
against INR56.47 crore in FY16. The operating profits of the
company stood moderate at INR1.80 crore (3.39%) while net profit
stood low at INR0.07 crore (0.12%) in FY17. The debt coverage
indicators remained moderate marked by total debt to GCA of 14.38
years in FY17, while the interest coverage stood at 1.32 times
during FY17. The liquidity position remained moderate marked by
current ratio of 1.23 times as on March 31, 2017 while the
working capital cycle stood moderate at 63 days in FY17. The
average utilization of working capital borrowings stood at 85%
during past twelve months ended February, 2018.
Limited bargaining power with principal manufacturer along with
fortune of the firm linked with growth of principal automobile
manufacturers: RMS is an authorized dealer of HMIL. The margin on
products is pre-decided at a particular level by the principal
manufacturer and thereby restricting the firm to earn incremental
income. Though the company is an authorized dealer of HMIL for
personal vehicle segment but any unfavorable event affecting the
growth plans of Original Equipment Manufacturer (OEM) will have a
significant impact on the performance of RMS.
Presence in a highly competitive automobile dealership industry
Indian auto dealership business is highly fragmented and
competitive with presence of large number of auto dealers
catering to different brands. Entry of global players in the
Indian market has further intensified competition. RMS has to
offer better terms like providing discounts on purchases to
attract new customers.
Key Rating Strengths
Experienced promoters in dealership industry along with
established track record of operations and association with
established player-HMIL: RMS is an authorized dealer of HMIL
since 2008, thus having a long track record of a decade. Mr. Om
Parkash Makkar, Mr. Rajesh Makkar and Ms. Rupesha Rani are the
key promoters of the RMS, who look after overall operations of
the firm and hold experience of more than a decade in the
automobile dealership business. Apart from RMS, all the parnters
are into management of other entities named AVC Motors, AVC
Motors- Muktsar, Raja Motors (Bathinda) and Raja Motors
(Fatehabad).
Moderately comfortable capital structure: The capital structure
of the firm stood moderately comfortable marked by overall
gearing of 1.12 times as on March 31, 2017 as against 1.31 times
as on March 31, 2016.
Haryana-based Raja Motors Sirsa (RMS) was established in 2008 by
Mr. Om Parkash Makkar, Mr. Rajesh Makkar and Ms. Rupesha Rani as
a partnership firm. RMS works as an authorized dealer of personal
vehicles for Hyundai Motor India Limited from its own showroom
and sells spare parts as well, in Sirsa itself. All the partners
look after the entire management of RMS. The associate concern of
RMS i.e. AVC Motors is into dealership of Mahindra & Mahindra for
passenger vehicle and commercial vehicle segments in Bathinda,
AVC Motors- Muktsar is into dealership of Mahindra & Mahindra for
passenger vehicle and utility vehicle segments in Muktsar, Raja
Motors (Bathinda) is an authorised dealer of personal vehicles
for HMIL in Bathinda, Raja Motors (Fatehabad), is an authorised
dealer of personal vehicles for HMIL in Fatehabad.
RAJA MOTORS: CARE Assigns B+ Rating to INR8.63cr LT Loan
--------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Raja
Motors Bathinda (RMB), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank
Facilities 8.63 CARE B+; Stable Assigned
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of RMB is constrained
on account of its financial risk profile marked by moderate scale
of operations, thin profit margins, moderately leveraged capital
structure, moderate debt coverage indicators and moderate
liquidity position in FY17 (refers to the period April 1 to March
31).The ratings are also constrained due to limited bargaining
power with principal manufacturer, presence in a highly
competitive automobile dealership industry and fortune of the
firm linked with growth of principal automobile manufacturers.
The ratings, however, derive strength from experienced promoters
in dealership industry along with established track record of
operations and association with established player- Hyundai Motor
India Limited (HMIL).
The ability of RMB to increase its scale of operations and
increase its profitability along with an improvement in its
solvency position by sourcing working capital funds in a timely
manner would be key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Financial risk profile marked by moderate scale of operations,
thin profit margins, moderately leveraged capital structure,
moderate debt coverage indicators and moderate liquidity
position.
The total operating income (TOI) of the firm has exhibited
fluctuating trend since last three years ended FY17 and stood
moderate at INR58.00 crore during FY17 as against INR62.04 crore
in FY16. The operating profits of the company stood moderate at
INR2.07 crore (3.57%) while net profit stood low at INR0.07 crore
(0.12%) in FY17. The capital structure stood moderately leveraged
marked by overall gearing of 1.47 times as on March 31, 2017 as
against 1.41 times as on March 31, 2016. The debt coverage
indicators remained moderate marked by total debt to GCA of 14.65
years in FY17, while the interest coverage stood at 1.37 times
during FY17. The liquidity position remained moderate marked by
current ratio of 1.17 times as on March 31, 2017 while the
working capital cycle stood moderate at 44 days in FY17. The
average utilization of working capital borrowings stood at 85%
during past twelve months ended February, 2018.
Limited bargaining power with principal manufacturer along with
fortune of the firm linked with growth of principal automobile
manufacturers: RMB is an authorized dealer of HMIL. The margin on
products is pre-decided at a particular level by the principal
manufacturer and thereby restricting the firm to earn incremental
income. Though the company is an authorized dealer of HMIL for
personal vehicle segment but any unfavorable event affecting the
growth plans of Original Equipment Manufacturer (OEM) will have a
significant impact on the performance of RMB.
Presence in a highly competitive automobile dealership industry:
Indian auto dealership business is highly fragmented and
competitive with presence of large number of auto dealers
catering to different brands. Entry of global players in the
Indian market has further intensified competition. RMB has to
offer better terms like providing discounts on purchases to
attract new customers.
Key Rating Strengths
Experienced promoters in dealership industry along with
established track record of operations and association with
established player-HMIL: RMB is an authorized dealer of HMIL
since 2008, thus having a long track record of a decade. Mr. Om
Parkash Makkar, Mr. Rajesh Makkar and Ms. Rupesha Rani are the
key promoters of the RMB, who look after overall operation of the
firm and hold experience of more than a decade in the automobile
dealership business. Apart from RMB, Mr. Om Parkash Makkar, Mr.
Rajesh Makkar and Ms. Rupesha Rani are into management of other
entities named AVC Motors, AVC Motors- Muktsar, Raja Motors
(Sirsa) and Raja Motors (Fatehabad).
Punjab-based Raja Motors Bathinda (RMB) was established in 2008
by Mr. Om Parkash Makkar, Mr. Rajesh Makkar and Ms. Rupesha Rani
as a partnership firm. RMB works as an authorized dealer of
personal vehicles for Hyundai Motor India Limited (HMIL) from its
own showroom and sells spare parts as well, in Bathinda itself.
All the partners look after the entire management of RMB. The
associate concern of RMB i.e. AVC Motors is in dealership of
Mahindra & Mahindra for passenger vehicle and commercial vehicle
segments in Bathinda, AVC Motors- Muktsar is in dealership of
Mahindra & Mahindra for passenger vehicle and utility vehicle
segments in Muktsar, Raja Motors (Sirsa) is an authorised dealer
of personal vehicles for HMIL in Sirsa, Raja Motors (Fatehabad),
is an authorised dealer of personal vehicles for HMIL in
Fatehabad.
RAMGO MODERN: CRISIL Reaffirms 'B' Rating on INR5MM Cash Loan
-------------------------------------------------------------
CRISIL Ratings has reaffirmed its 'CRISIL B/Stable' rating on the
bank facilities of Ramgo Modern Rice Mill (RMRM)
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 5 CRISIL B/Stable (Reaffirmed)
The rating reflects the firm's below-average financial risk
profile because of small networth and high gearing and modest
scale of operations in an intensely competitive industry. These
weaknesses are partially offset by the extensive experience of
its proprietor in the rice milling business and his funding
support.
Key Rating Drivers & Detailed Description
Weakness
* Below-average financial risk profile: The financial risk
profile is below average, as reflected in high gearing and small
net worth of 4.42 times and INR1.23 crore respectively as on
March 31, 2017.
* Modest scale of operations amidst intense competition: The rice
milling industry is highly competitive and RMMR is exposed to
intense competition. Also, the scale of operations remains modest
with revenues of around INR22.22 crore for fiscal 2017.
Strengths
* Extensive experience of proprietor: Presence of more than three
decades in the grain trading segment has enabled the proprietor
and his family to understand local market dynamics and establish
healthy relationship with customers and suppliers.
Outlook: Stable
CRISIL believes RMRM will continue to benefit from proprietor's
extensive experience. The outlook may be revised to 'Positive' in
case of a substantial improvement in revenue and profitability,
and better financial risk profile. The outlook may be revised to
'Negative' if lower-than-expected accrual, stretch in working
capital cycle, or any large, debt-funded capital expenditure
further weakens financial risk profile.
Set up in 1984 as a proprietorship concern by Mr Ramaiah
Govindammal, RMRM mills and processes paddy into rice, rice bran,
and broken rice. It also trades in paddy for a commission.
RATHI CHEMPELS: CRISIL Reaffirms B- Rating on INR5MM Cash Loan
--------------------------------------------------------------
CRISIL has reaffirmed its ratings on the bank facilities of Rathi
Chempels Private Limited (RCPL; part of the Rathi group) at
'CRISIL B-/Stable/CRISIL A4'.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit/
Overdraft facility 5 CRISIL B-/Stable (Reaffirmed)
Inland/Import
Letter of Credit 2.75 CRISIL A4 (Reaffirmed)
Proposed Fund-
Based Bank Limits 1.25 CRISIL B-/Stable (Reaffirmed)
The ratings continue to reflect the group's large working capital
requirement and susceptibility of operating margin to volatility
in raw material prices. These strengths are partially offset by
moderate business risk profile, supported by promoters'
experience in the engineering goods industry, established client
base, diverse product profile, and above-average financial risk
profile because of a healthy capital structure and comfortable
gearing and debt protection metrics.
Analytical Approach
For arriving at its ratings, CRISIL has combined the business and
financial risk profiles of Chemgems (India) Pvt Ltd, Milan
Tannery, and RCPL. This is because all these entities,
collectively referred to as the Rathi group, have a common
management and significant operational linkages.
Key Rating Drivers & Detailed Description
Weaknesses
* Exposure to intense competition: The leather goods segment is
highly fragmented with limited product differentiation, mainly
due to low entry barrier. Hence, 60-65% of players operate in the
unorganised sector. Domestic manufacturers also have to compete
with players from China, which has a larger presence in the
global market.
* Working capital-intensive operations: Gross current assets have
been over 200 days in the three years ended March 2017 due to
stretched receivables. Though credit from suppliers (80-90 days)
helps partially meet the funding gap, reliance on external
borrowing remains high, leading to fully utilised cash credit
limit in the past 12 months.
Strength
* Promoters' extensive experience: Presence of over three decades
in the leather industry and strong regional market presence have
enabled the promoters to develop healthy relationship with
suppliers and customers, bag new orders, and ramp up operations.
Outlook: Stable
CRISIL believes the Rathi group will continue to benefit from its
established market position in the leather industry. The outlook
may be revised to 'Positive' if higher-than-expected growth in
revenue and accretion to reserve, and efficient working capital
management strengthen financial risk profile. The outlook may be
revised to 'Negative' if significant decline in revenue and
profitability, increase in working capital requirement, fresh,
debt-funded capital expenditure, or capital withdrawal weakens
financial risk profile.
The Kolkata-based Rathi group is promoted by Mr Hari Narayan
Rathi and Mr Kishore Rathi. It manufactures and exports leather
bags and wallets; and trades in chemicals and dyes used in the
leather and textile industries in the domestic market. Unit in
Banthala, West Bengal, has installed capacity to process 5.10
lakh bags per month.
SAI MAHAAVIR: CRISIL Withdraws B Rating on INR20MM Term Loan
------------------------------------------------------------
CRISIL has withdrawn its rating on the long-term bank facility of
Sai Mahaavir Developers(SMD) following a request from the company
and on receipt of a 'no dues certificate' from the banker. The
rating action is in line with CRISIL's policy on withdrawal of
bank loan ratings.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Term Loan 20 CRISIL B/Stable (Withdrawn)
Formed in 1988 as a partnership firm, SMD undertake real estate
projects in Navi Mumbai. The firm is a part of Mumbai based
Mahaavir group, which is managed by Chhajer family. The group has
successfully completed residential and commercial projects in
Navi Mumbai.
SALASAR BALAJJI: CARE Assigns B+ Rating to INR9.50cr LT Loan
------------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of
Salasar Balajji Cold Storage Private limited (SBPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 9.50 CARE B+; Stable Assigned
Detailed Rationale & Key rating Drivers
The rating assigned to the bank facilities of SBPL is primarily
constrained on account of its moderate solvency and stressed
liquidity position. The ratings are, further, constrained on
account of its presence in a highly competitive and fragmented
cold storage industry.
The ratings, however, derive strength from experienced promoters
with long track record of operations, continuous growing scale of
operations and moderate profitability margins.
The ability of the company to increase its scale of operations
while maintaining profitability in a highly competitive and
fragmented industry and improvement in solvency position with
efficient management of working capital shall be the key rating
sensitivities.
Detailed description of the key rating drivers
Key Rating Weakness
Moderate solvency position and stressed liquidity position: The
capital structure of the company stood moderately leveraged as on
March 31, 2017, improved y-o-y mainly on account of accretions of
profits to reserves as well as considering unsecured loan as
quasi equity which are subordinate to bank borrowings. Further,
the debt coverage indicators of the company improved y-o-y but
stood weak.
The operating cycle of the company stood elongated with 306 days
in FY17 mainly on account of higher collection period owing to
accrued warehouse and cold storage rent. Further, the average
utilisation of working capital limits remained at 90% during last
12 months ended February 28, 2018.
Highly competitive and fragmented industry: The warehousing
industry is characterized by highly fragmented and competitive in
nature as evident by the presence of numerous unorganized and few
organized players. Due to this, the players in the industry do
not have any pricing power.
The entry barriers in this industry are very low on account of
low capital investment and technological requirement.
Key Rating Strengths
Experienced directors with long track record of operations: Mr.
Kailash Kumar Bajaj, director, graduate by qualification, has two
decades of experience in the warehousing industry. Mr. Satya
Narayan Bajaj, director, has around four decades of experience in
the warehousing industry. Mr. Jagdish Prasad Bajaj, director,
graduate by qualification, has around 3 decades of experience in
the industry. All directors are actively involved in day to day
operations of the company and look after overall management of
the company. Further, Mr. Madhav Bajaj, Chartered Accountant by
qualification, has an experience of around 5 years, look after
finance and accounts function of the company. Due to long-
standing presence in the industry, the company has established
relationship with farmers, traders and mandi merchants.
Continuous growing scale of operations: The company has witnessed
continuous growth in Total Operating Income (TOI) which grew at a
Compounded Annual Growth Rate (CAGR) of 15.46% during last four
financial years ended FY17. During FY17, TOI of the company has
increased by 8.32% over FY16 mainly on account of increase in
income from trading activity. Till February 28, 2018, the
company has achieved TOI of INR 5.12 crore.
Moderate Profitability Margins: Profitability of the company
stood moderate with PBILDT margin and PAT margin of 48.71% and
5.03% respectively in FY17. However, during FY17, PBILDT margin
of the company declined over FY16 mainly on account of increase
in cost of traded goods of the company. Despite decline in PBILDT
margin, PAT margin of the company improved by 175 bps mainly on
account of decline in interest and depreciation expenses.
Jodhpur (Rajasthan) based Salasar Balaji Cold Storage Private
Limited (SBPL) was formed in 1999 by Mr. Kailash Kumar Bajaj, Mr.
Satya Narayan Bajaj, Mr. Jagdish Prasad Bajaj and Ms. Sushila
Bajaj.
SBPL is operating cold storages and warehouses for agro
commodities to provide the services to farmers, merchants and
traders. It has 3 cold storages and 2 warehouses with an
aggregate storage capacity of 13200 Metric Tonnes Per Annum
(MTPA) situated at Jodhpur district of Rajasthan. The company has
one more warehouse which is provided by the company on rent. From
FY16, the company has started trading of agro commodities
simultaneously.
Further, the directors are operating a partnership firm namely
"Govindam Exports" which is engaged in providing warehouses
services to farmers and traders and a company namely "SPJ Ispat
India Private Limited" which is engaged in providing Godown on
rent to National Bulk Handling Corporation (NBHC) and Star Agri
warehousing and Collateral Management Limited.
SATNAM INDUSTRIES: Ind-Ra Maintains B+ Rating in Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Satnam
Industries' Long-Term Issuer Rating in the non-cooperating
category. The issuer did not participate in the rating exercise
despite continuous requests and follow-ups by the agency.
Therefore, investors and other users are advised to take
appropriate caution while using the rating. The rating will now
continue to appear as 'IND B+ (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating actions are:
-- INR50 mil. Fund-based working capital limit maintained in
Non-Cooperating Category with IND B+ (ISSUER NOT COOPERATING)
rating;
-- INR19.6 mil. Term loan maintained in Non-Cooperating Category
with IND B+ (ISSUER NOT COOPERATING) rating; and
-- INR20 mil. Non-fund-based limit maintained in Non-Cooperating
Category with IND A4 (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
March 10, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 2007, Satnam Industries produces and processes
rice at its manufacturing unit in Chhattisgarh, which has an
installed capacity of eight MT per hour. The company is managed
by Mr. Alok Sundarni and his family.
SHARVI RICE: Ind-Ra Migrates BB Issuer Rating to Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Sharvi Rice Mill
Private Limited's (SRMPL) Long-Term Issuer Rating to the non-
cooperating category. The issuer did not participate in the
rating exercise despite continuous requests and follow-ups by the
agency. Therefore, investors and other users are advised to take
appropriate caution while using these ratings. The rating will
now appear as 'IND BB (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating actions are:
-- INR40 mil. Fund-based limits migrated to non-cooperating
category with IND BB (ISSUER NOT COOPERATING) rating; and
-- INR65.39 mil. Term loan due on December 15, 2023 migrated to
non-cooperating category with IND BB (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
April 5, 2017. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Incorporated in 2011, SRMPL is engaged in processing and milling
of paddy into rice, rice ban and husk. Its plant is located in
Nagri, Ranchi and has an install capacity of 48,000 metric tons
per annum.
SHREE DWARKADHISH: CRISIL Lowers Rating on INR10MM Loan to D
------------------------------------------------------------
CRISIL has been consistently following up with Shree Dwarkadhish
Udyog Private Limited (SDUPL) through letters and emails dated
January 24, 2017, and February 14, 2017, among others, apart from
telephonic communication, for obtaining information. However, the
issuer has remained non-cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 10 CRISIL D (Issuer Not
Cooperating; Downgraded
from 'CRISIL B/Stable Issuer
Not Cooperating')
The Investors, lenders, and all other market participants should
exercise due caution while using ratings assigned/reviewed with
the suffix 'ISSUER NOT COOPERATING'. These ratings lack a forward
looking component as they are arrived at without any management
interaction and are based on best available or limited or dated
information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
has not received any information on either the financial
performance or strategic intent of SDUPL, which restricts
CRISIL's ability to take a forward looking view on the entity's
credit quality. CRISIL believes information available on the
company is consistent with 'Scenario 1' outlined in the
'Framework for Assessing Consistency of Information with 'CRISIL
BB' rating category or lower'.
Therefore, on account of inadequate information and lack of
management cooperation, CRISIL has downgraded its rating on the
long-term bank facilities of SDUPL to 'CRISIL D Issuer Not
Cooperating' from 'CRISIL B/Stable Issuer Not Cooperating'.
The downgrade reflects the company's continuously overdrawn cash
credit limit. However, the company benefits from the extensive
experience of its promoters.
Key Rating Drivers & Detailed Description
Weakness
* Continuously overdrawn cash credit limit: The company has weak
liquidity, leading to continuous overdrawing of its cash credit
limit.
Strengths
* Extensive experience of the promoters in the industry: The
promoters have experience of around 15 years in the construction
industry through group company Sarawgi Builders Pvt Ltd (SBPL).
Their experience has enabled SDUPL to develop strong
relationships with suppliers and customers.
SDUPL is based in Ranchi (Jharkand) and was incorporated in 2012.
The company trades in steel, cement, and other construction
materials such as electrical items and sanitary ware. It started
operations in July 2012. The company is promoted by Mr Amit
Sarawgi and Mr Gyan Prakash Sarawgi, who have experience of more
than 15 years in trading of steel and cement products.
SHREE GOVINDAM: CARE Assigns B+ Rating to INR7.5cr LT Loan
----------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Shree
Govindam Projects & Marketing (SGPM), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 7.50 CARE B+; Stable Assigned
Detailed Rationale & Key rating Drivers
The ratings assigned to the bank facilities of Shree Govindam
Projects & Marketing (SGPM) are primarily constrained on account
of its presence in the highly fragmented and competitive
government electrical industry, its geographical concentration
risk as well as customer concentration risk and its constitution
as a proprietorship concern. The ratings, further, constrained on
account of its financial risk profile marked by thin
profitability margins, moderate solvency position and moderate
liquidity position.
The ratings, however, favorably take into account experienced
promoter with established relationship with customers.
The ratings, further, derive strength from increase in total
operating income with strong order book position.
The ability of the firm to increase its scale of the operations
by getting new contracts with speedy execution of contracts and
improvement in profitability and solvency position of the firm
are the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weakness
Thin profitability margins: The profitability of SPMG stood thin
with PBILDT and PAT margin of 1.95% and 0.95% respectively in
FY17. Further, GCA level of the firm stood low at 0.18 crore in
FY17, however, increased by 13.67% in FY17 over FY16 mainly due
to increase in PAT level and depreciation expenses.
Moderate Solvency Position and moderate liquidity Position: The
capital structure of the firm stood moderate with an overall
gearing of 1.78 times as on March 31, 2017. Debt service coverage
indicators of the firm also stood weak with Total debt to GCA
stood at 23.10 times as on March 31, 2017. Further, interest
coverage ratio also stood moderate at 2.25 times in FY17.
Operating cycle of the firm stood moderate with an operating
cycle period of 60 days in FY17. Further, current ratio and quick
ratio of firm stood moderate at 1.30 times and 1.02 times
respectively as on March 31, 2017. Customer concentration as well
as geographical concentration risk and constitution as a
proprietorship concern SGPM is a regional player and all the
projects are executed majorly in Rajasthan only which reflects
geographical concentration risk.
Furthermore, its constitution as a proprietorship concern leads
to limited financial flexibility and risk of withdrawal of
capital.
High competitive intensity in the government electrical segment:
The industry is highly fragmented in nature with presence of
large number of unorganized players and a few large organized
players coupled with the tender driven nature of contracts poses
huge competition and puts pressure on the profitability margins
of the players. Further, as the firm participates in tenders
invited by government departments, high competition and lower
bargaining power restricts its profitability margins.
Key Rating Strengths
Experienced promoter with established relationship with customers
Mr. Sachin Goyal, graduate by qualification and have around two
decades of experience in the industry and look after overall
affairs of the firm.
Further, being present in the industry since 2006, the firm has
established track record of operations in the industry which
is visible from continuous growth in its scale of operations. Due
to established relationship, SGPM has been receiving
repetitive orders from its clients.
Increase in total operating income with strong order book
position: TOI of the firm has been increasing at a Compounded
Annual Growth Rate (CAGR) of 24.54% during FY15-FY17 mainly on
account of orders received by the firm and timely execution.
During FY17, TOI of the firm has increased by 10.34% over
FY16 and stood at INR 16.38crore with PAT INR 0.16crore in FY17.
As on January 11, 2018, SPMG has an outstanding order book
position of INR 48.24crore which is 2.95 times of FY17's Total
Operating Income (TOI) with six projects in hand reflecting
strong order book position. The on-going projects of the firm are
likely to be executed within next 12 months, providing medium
term revenue visibility.
Jaipur (Rajasthan) based Shree Govindam Projects & Marketing
(SGPM) was formed in 2006 as a proprietorship concern by Mr.
Sachin Goyal.SGPM is registered as 'A' (highest scale in A to D
grade) class approved government electric contractor with Public
Works Department (PWD), Rajasthan.It executes electric contracts
for government departments as well as also takes orders on sub
contract basis from other players. The firm takes the contracts
from government departments through participating in tenders. The
firm participates in the electric orders like electric wiring,
transformers assembling and installation and all type of other
electric works. The firm procures raw material mainly from
Rajasthan, Uttar Pradesh and Maharashtra.
SITARAM GEMS: Ind-Ra Affirms 'BB' Issuer Rating, Outlook Stable
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed at Sitaram Gems'
(SG) Long-Term Issuer Rating at 'IND BB'/Stable. The Outlook is
Stable.
The instrument-wise rating actions are:
-- INR350 mil. (increased from INR250 mil.) Fund-based limit
affirmed IND BB/Stable rating;
-- INR9.4 mil. Term loan due on March 2020 affirmed with IND
BB/Stable rating; and
-- INR20 mil. Non-fund based limit affirmed with IND A4+ rating.
KEY RATING DRIVERS
The affirmation reflects SG's continued modest credit metrics In
FY17, SG's interest coverage was 3.68x (FY16: 3.9x) and net
financial leverage was 3.8x (4.6x). In FY17, the EBITDA margin
improved significantly, however, the proportionate increase in
financial cost was higher. This led to deterioration in the
interest coverage. Meanwhile, the proportionate increase in
external borrowings was lower, leading to an improvement in the
net leverage. The margin increased to 2.96% in FY17 from 2.09% in
FY16 due to a decline in direct and administrative expenses.
The ratings also reflect SG's tight liquidity, indicated by an
average utilization of the working capital limits of 98.0% for
the 12 months ended April 2018. Moreover, they reflect the
partnership nature of the business and the volatility in diamond
prices and exchange rates, as the majority of the revenue is
derived from exports.
The ratings, however, continue to be supported by the partners'
experience of more than 10 years in the diamond cutting and
polishing business and SG's large scale of operations. Its
revenue rose to INR3,146 million in FY17 from INR2,901 million in
FY16, driven by the execution of a higher number of orders.
According to provisional financials for FY18, the company's
revenue was INR3,090 million.
RATING SENSITIVITIES
Negative: Deterioration in the credit metrics on a sustained
basis will be negative for the ratings.
Positive: A rise in the operating EBITDA margin leading to an
improvement in the credit metrics on a sustained basis will be
positive for the ratings.
COMPANY PROFILE
Incorporated in 2001, SG is a partnership firm engaged in diamond
manufacturing, and rough diamond cutting and polishing. The firm
exports to Hong Kong and Bangkok. Its domestic markets are
Mumbai, Surat and Kolkata. It is managed by Mr. Manjibhai
Kevadia.
SRI ADITYA: CRISIL Withdraws B Rating on INR14MM Cash Loan
----------------------------------------------------------
CRISIL Ratings has been consistently following up with Sri Aditya
Homes Private Limited (SAHPL) for obtaining information through
letters and emails dated February 8, 2017, and March 22, 2017,
among others, apart from telephonic communication. However, the
issuer has remained non-cooperative.
Amount
Facilities (INR Mln) Ratings
---------- --------- -------
Cash Credit 14 CRISIL B/Stable (Issuer Not
Cooperating; Rating Withdrawn)
Proposed Cash 4 CRISIL B/Stable (Issuer Not
Credit Limit Cooperating; Rating Withdrawn)
Proposed Long Term 12 CRISIL B/Stable (Issuer Not
Bank Loan Facility Cooperating; Rating Withdrawn)
The investors, lenders and all other market participants should
exercise due caution while using the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING'. These ratings lack a
forward looking component as they are arrived at without any
management interaction and are based on best available or limited
or dated information on the company.
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
failed to receive any information on either the financial
performance or strategic intent of SAHPL. This restricts CRISIL's
ability to take a forward SAHPL is consistent with 'Scenario 1'
outlined in the 'Framework for Assessing Consistency of
Information with CRISIL BB rating category or lower. Based on the
last available information, the rating on bank facilities of
SAHPL continues to be 'CRISIL B/Stable Issuer Not Cooperating'.
CRISIL has withdrawn its ratings on the bank facilities of SAHPL
on the request of the company and receipt of a no objection / due
certificate from its bank. The rating action is in line with
CRISIL's policy on withdrawal of its ratings on bank loans.
Incorporated in the year 1994 and promoted by Mr. Kota Reddy,
SAHPL is engaged primarily in residential real estate development
in Hyderabad.
SRINIVASAN CHARITABLE: Ind-Ra Moves D Rating to Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Srinivasan
Charitable & Educational Trust's (SCET) bank loans' rating to the
non-cooperating category. The issuer did not participate in the
rating exercise, despite continuous requests and follow-ups by
the agency. Therefore, investors and other users are advised to
take appropriate caution while using these ratings. The rating
will now appear as 'IND D (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating action is:
-- INR2,370 bil. Bank loans (Long-term) migrated to Non-
Cooperating Category with IND D (ISSUER NOT COOPERATING)
rating.
Note: The rating was last reviewed on May 31, 2017. Ind-Ra is
unable to provide an update as the agency does not have adequate
information to review the rating.
COMPANY PROFILE
SCET was established in 2006 by Shri A. Srinivasan. The trust
runs five educational institutions in Tamil Nadu. SCET offers
engineering, polytechnic, nursing and medical courses and
operates a hospital in Perambalur district.
SRINIVASAN HEALTH: Ind-Ra Migrates D LT Rating to Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Srinivasan
Health & Educational Trust's bank loans' rating to the non-
cooperating category. The issuer did not participate in the
rating exercise, despite continuous requests and follow-ups by
the agency. Therefore, investors and other users are advised to
take appropriate caution while using these ratings. The rating
will now appear as 'IND D (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating action is:
-- INR1,800 bil. Bank loans (Long-term) migrated to Non-
Cooperating Category with IND D (ISSUER NOT COOPERATING)
rating.
Note: The rating was last reviewed on May 31, 2017. Ind-Ra is
unable to provide an update as the agency does not have adequate
information to review the rating.
COMPANY PROFILE
Srinivasan Health & Educational Trust was founded by A.
Srinivasan in 2009 with an objective to promote, set up and run
charitable institutions, educational institutions and hospitals.
Srinivasan has sponsored other trusts such as Srinivasan
Charitable and Educational Trust, and Dhanalakshmi Srinivasan
Charitable and Educational Trust. These group trusts run
engineering, medical and polytechnic colleges.
SURYA ELECTRICALS: Ind-Ra Maintains BB- Rating in Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Surya
Electricals & Engineers Private Limited's Long-Term Issuer Rating
in the non-cooperating category. The issuer did not participate
in the rating exercise despite continuous requests and follow-ups
by the agency. Therefore, investors and other users are advised
to take appropriate caution while using these ratings. The rating
will continue to appear as 'IND BB- (ISSUER NOT COOPERATING)' on
the agency's website.
The instrument-wise rating actions are:
-- INR69 mil. Fund-based limit maintained in Non-Cooperating
Category with IND BB- (ISSUER NOT COOPERATING) rating; and
-- INR31 mil. Non-fund-based limit maintained in Non-Cooperating
Category with IND A4+ (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
April 13, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Surya Electricals & Engineers manufactures Hamilton poles and
telecom towers, and fabricates heavy structures.
SWASTIK COAL: Ind-Ra Lowers Long-Term Issuer Rating to 'D'
----------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Swastik Coal
Corporation Pvt. Ltd.'s (SCCPL) Long-Term Issuer Rating to 'IND D
(ISSUER NOT COOPERATING)' from 'IND BBB (ISSUER NOT
COOPERATING)'. The issuer did not participate in the rating
exercise despite continuous requests and follow-ups by the
agency. Thus, the rating is based on the best available
information. Therefore, investors and other users are advised to
take appropriate caution while using the rating.
The instrument-wise rating actions are:
-- INR425 mil. Fund-based working capital facilities (long-
/short-term) downgraded with IND D (ISSUER NOT COOPERATING)
rating;
-- INR3,035 bil. Non-fund-based working capital facilities
(long-/short-term) downgraded with IND D (ISSUER NOT
COOPERATING) rating; and
-- INR290 mil. Proposed bank facilities (long-/short-term)
downgraded with Provisional IND D (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: Issuer did not cooperate; Based on
the best available information
KEY RATING DRIVERS
The ratings have been downgraded following a confirmation from
SCCPL's lenders that the company has been categorized as a non-
performing asset.
RATING SENSITIVITIES
Positive: Timely debt servicing for at least three consecutive
months would lead to a positive rating action.
COMPANY PROFILE
Indore-based SCCPL, the flagship company of Swastik Group, is
engaged in coal import and trading. The company is promoted by
Mr. Hitesh Bindal and Mr. Vishnu Bindal.
TRIVENI KRIPA: CARE Assigns B+ Rating to INR20cr LT Loan
--------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of
Triveni Kripa Enterprises LLP (TKELLP), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 20.00 CARE B+; Stable Assigned
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of TKELLP is
constrained on account of project implementation risk associated
with its on-going residential cum commercial project and
saleability risk associated with the remaining units in the
highly cyclical real estate industry along with the risk related
to timely receipt of the advances. Furthermore, the rating
remained constrained on account of its constitution as a
partnership firm and its presence in a highly fragmented real
estate industry.
The rating however, derives strength from experienced partners in
the real estate industry.
The ability of TKELLP to complete its on-going project and sale
of its units at envisaged prices along with timely realization
of sales proceeds is the key rating sensitivity.
Detailed description of the key rating drivers
Key Rating Weaknesses
Constitution as a partnership firm: TKELLP being a partnership
firm is exposed to inherent risk of the partners' capital being
withdrawn at the time of contingency and also limits the ability
to raise the capital.
High Project implementation risk: TKELLP started construction of
project in January, 2017 and till March 28, 2018, the firm has
incurred cost of INR38.42 crore forming 45.08% of envisaged
project cost and thereby 54.92% cost is to be incurred by
December 2021 reflecting high project implementation risk.
Risk related to timely receipt of advances: TKELLP has received
booking for 26 units (i.e. 11 flats and 15 shops) which forms 10%
of total units for Golden Leaf and has received the booking
advance of INR1.09 crore which forms 10.79% of sales value of
booked units against 45.08% of total cost incurred of Golden Leaf
reflecting lower receipt of advances against cost incurred and
thereby high risk associated with timely receipt of remaining
booking advances remains crucial.
Presence in a cyclical and highly fragmented real estate industry
The life cycle of a real estate project is long and the state of
the economy at every point in time, right from land acquisition
to construction to actual delivery, has an impact on the project.
This capital intensive sector is extremely vulnerable to the
economic cycles. Currently, slowdown in sales and increased input
costs has increased liquidity concerns for highly leveraged
players.
Key Rating Strengths
Experienced partners: TKELLP was established in 2010 and now it
is being managed by three active partners named Mr. Vipul
Agarwal, Mr. Mahendra Agarwal and Mr. Bhupendra Agarwal. All the
partners have long standing experience in real estate industry.
Jaipur (Rajasthan) based, TKELLP was established as a private
limited company as Triveni Kripa Enterprises Private Limited
in May 2010 and subsequently it has been converted to partnership
firm in July 2014. TKELLP is currently executing a residential
cum commercial project named 'Golden Leaf' (RERA Registration
Number: RAJ/P/2017/344) with 256 units (84 flats and 172 Shops)
at Jaipur consisting total area under development of 2563.30
square meters.
The implementation of Golden Leaf commenced since January, 2017
and till March 28,2018, TKELLP has incurred the total cost of
INR38.42 crore (45.08% of total project cost) out of the total
cost of INR 85.23 crore and rest will be incurred by end of
December 2021. Till March 28, 2018, out of total units, 11 flats
have been booked and 15 shops have been booked.
VPN RAW: CARE Assigns B+ Rating to INR9cr LT Loan
-------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of V P N
Raw And Boiled Rice Mill (VPN) as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 9.00 CARE B+; Stable Assigned
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of V P N Raw And
Boiled Rice Mill (VPN) are tempered by small scale of operations
with declining PBILDT margins and thin PAT margin, seasonal
nature of availability of paddy seeds leading to working capital
intensive nature of operations, leveraged capital structure &
debt coverage indicators, regulations by government in terms of
Minimum Support Price (MSP) for raw material and procurement of
rice through Food Corporation of India (FCI) and partnership
nature of constitution. However, the rating derives comfort from
long experience of promoter with established track record of
entity, increasing total operating income during review (FY15-
FY17, FY refers to period April 1 to March 31) period and
favorable demand for rice milling industry.
Going forward, the firm's ability to increase its scale of
operations, improve the profitability margins in competitive
environment, improve its capital structure and debt coverage
indicators while managing its working capital requirements
remain its key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Small scale of operations with declining profitability margins:
The operations of the company is small marked by TOI of INR16.11
crore and low networth of INR2.45 crore as on March 31, 2017.
PBILDT margin remained declining y-o-y during the review period
on account of increase in power & fuel cost along with employee
cost at the back of increased execution of orders during the
review period. PBILDT margin declined from 4.67% in FY15 to 4.62%
in FY16 and further declined to 2.74% in FY17. PAT margin stood
fluctuating on back of fluctuation in PBILDT in absolute terms.
However, PAT margin improved from 0.20% in FY16 to 0.28% in FY17
due to decrease in interest expenses at the back of decrease in
long term debt in the nature of Vehicle loan., however PAT margin
remained thin.
Leveraged capital structure and debt coverage indicators: The
capital structure of VPN marked by overall gearing stood
leveraged during the review period (FY15-FY17)i.e., in the range
of 5.35x - 2.07x on account of increased working capital
utilisation as on accounts closing date along with thin net
worth. However, overall gearing ratio improved from 5.35x as on
March 31, 2015 to 2.07x as on March 31, 2017 on account of
variation in working capital facility utilisation levels as on
accounts closing date coupled with vehicle loan and term loan
scheduled repayment. Apart, the firm has infused the capital of
INR1.44 Crore as on March 31, 2016 & INR0.07 crore as on March
31, 2017. Debt equity ratio stood comfortable, however
deteriorated from 0.06x as on March 31, 2015 to 0.33x in March
31, 2016 and improved to 0.25x as on March 31, 2017 on account of
availing long term debt in the nature of vehicle loan and term
loan for purpose of acquiring plant & machinery and its scheduled
repayment. Interest coverage ratio stood comfortable at 2.01x in
FY17 on account of low interest expenses. However, Total debt/GCA
of the firm stood weak at 24.12x in FY17 due to very thin cash
accruals at the back of small scale of operations.
Seasonal nature of availability of paddy seeds leading to Working
capital intensive nature of operations: Paddy is being the
'Kharif' crop and is cultivated from June to July and September
to October and the same is processed by rice millers throughout
the year. Hence the millers are required to carry high levels of
raw material inventory to mitigate the raw material availability
risk, resulting in relatively high inventory period. Hence the
inventory holding period stood elongated at 115 days in FY17,
though it has decreased from 119 days in FY16 remained elongated.
The inventory mainly consists of raw materials which are stored
based on its seasonal availability and finished goods in order to
aging as it would give better quality rice. VPN purchases its raw
material from farmers by cash & carry basis hence average
creditor's period stood negligible in FY17 stood at 1 day. VPN
provides its customers' an average credit period up to 1 month to
ensure steady flow of orders. Hence, average collection period of
VPN stood at 14 days in FY16 and increased to 28 days in FY17 on
account of delay in receipt of payments as compared to FY16. Due
to the above said factors, the operating cycle of the firm stood
elongated at 141 days. The average utilization of cash credit
facility stood at 90% for last 12 months ended March 2018.
Regulations by government in terms of Minimum Support Price (MSP)
for raw material and procurement of rice through Food Corporation
of India (FCI): The rice industry is highly regulated by the
government as it is seen as an important sector which could
affect the food security of the country. The central Government
of India (GOI), every year decides a minimum support price of
paddy which limits the bargaining power of rice millers over the
farmers. The sale of rice in the open market is also regulated by
the government through levy quota and fixed prices. Due to the
above said regulations along with the intense competition, the
bargaining power of the rice millers against the suppliers of
paddy and the customers is limited.
Partnership nature of constitution: VPN is constituted as a
partnership firm wherein it is exposed to frequent withdrawal of
partners' capital and resultant erosion of the net worth
resulting in lower capital base despite the firm being able to
generate sufficient profits in the past.
Key Rating Strengths
Long experience of promoters with established track record of
entity: VPN was established in the year 2007 and holds track
record for about a decade. Mr. Pullaiah Verepalli, Managing
Partner & Ms. Ammani Verepalli, Partner of VPN has long term
experience in rice milling business for more than two decades by
associating themselves in rice milling business through its
previous employer Bhagyalakshmi Mills from 1996 to 2006 & VPN
since 2007. Both the partners are taking care of all the
operational activities in the concern.
Increasing total operating income during review period: The total
operating income of the company grew from INR 15.06 crore in FY15
to INR16.11 crore in FY17 at a compounded annual growth rate
(CAGR) of 3.43% on account of increased orders received and
increased demand for rice during the review period (FY15-FY17).
VPN reported revenue of INR12 crore for FY18 (Prov). The decline
in TOI was due to decrease in number of orders received at the
back of intense competition in the industry.
Favourable demand for rice milling industry: Rice is one of the
three major crops cultivated worldwide, along wheat and corn.
However, rice is the most important crop that is used as a
primarily food source. In developing countries, the availability
of rice is closely tied to the food security as well as political
stability. The changes in the availability of rice and
subsequently in its price have caused social unrest in certain
countries. For example, during the food crisis in 2008, the cost
of rice tripled. According to the estimations of the World Bank,
the increasing of the rice price has pushed 100 million people
below the poverty line.
Based on the projections made by the Food and Agricultural Policy
Research, the global rice demand is expected to rise up to 496
million tons in 2020 and up to 555 million tons in 2035.
Especially the demand on the Asian rice market is projected to
account for more than 60% of the total rice demand increase,
despite of decline of consumption in China and in India. Also, in
Africa, 30 million tons more of rice will be needed to meet the
increasing demand of more than 100%, compared to 2010. In
addition, in the Americas the total rice consumption is projected
to rise with more than 30% over the next decades. The challenges
that the rice industry has to face are complex and involve the
creation of sustainable strategies that will primarily enable the
production needed to delivered to the growing demand for rice,
especially in the areas where traditional cultivation
technologies are intensively used, but also ensuring profitable
productions to keep rice prices at an affordable level for a
growing consumer market.
Andhra Pradesh based, V P N Raw And Boiled Rice Mill (VPN) was
established and promoted by Mr. Pullaiah Verepalli & Ms. Ammani
Verepalli as a partnership firm in the year 2007 for rice milling
with the installed capacity of 24 MT per day. Paddy is the main
input which is procured from the farmers located in and around
Nellore, being the agricultural prone place. The firm sells the
final product under its own brand name VPN Gold to wholesalers
(as 25 kg, 50 kg, 75kg and 100 kg bags) to states covering
Kerala, Pondicherry, Karnataka & Gujarat through 30 brokers. The
process of production is semi-automated. Rice bran & broken rice
are bi products. It sells rice bran to oil manufacturers and
broken rice to local retailers. In FY17, sale of rice contributed
91% of total sales and the sale of bi-products contributed the
remaining 9%. The average purchase price of paddy is INR1800/
Quintal while the sale price of rice is INR2200/ Quintal. With
the experience of the promoter in the same line of business, at
present, VPN has 50 regular clients and they contribute around
65% of the total sales. VPN has an own godown for paddy (of 1.72
acres) with the storage capacity of 10,000 MT. The finished
product (rice) is stored inside the mill premises. The registered
office is located in Nellore, Tamilnadu.
VANAMAALI INFRA: CARE Assigns B+ Rating to INR1.0cr LT Loan
-----------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of of
Vanamaali Infra Private Limited (VIPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 1.00 CARE B+; Stable Assigned
Short-term Bank
Facilities 8.00 CARE A4 Assigned
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of Vanamaali Infra
Private Limited (VIPL) are tempered by limited track record,
small scale of operations with fluctuating total operating income
during the review period, short term revenue visibility from its
current order book, leveraged capital structure and weak debt
coverage indicators, working capital intensive nature of
operations, tender based nature of operations and susceptibility
of profitability margins to fluctuation in raw material prices.
However, the ratings are underpinned by experienced promoter for
more than one decade in construction industry, improved PBILDT
margins albeit fluctuating PAT margins and stable outlook of
civil construction industry.
Going forward, ability of company to increase scale of operations
and improve its profitability margins, ability of the company to
bag new orders in competitive environment and manage its working
capital requirements efficiently to improve its capital structure
and debt coverage indicators are key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Limited track record of the company and small scale of operations
VIPL was established in the year 2013; hence, it has a limited
track record. Furthermore, the scale of operations of the company
is small marked by total operating income (TOI) of INR6.88 crore
in FY17 with low networth base of INR0.86 crore in FY17 as
compared to other peers in the industry.
Fluctuating total operating income during the review period
The total operating income of the company has been fluctuating
during the review period. The total operating income of the
company decreased significantly from INR9.11 crore in FY15 to
INR1.57 crore in FY16 due to the company stopped executing orders
from private sector and has no eligibility to make tender for
government projects. However, the total operating income
increased to 6.88 crore in FY17 due to the company has got
government projects and executed the same. Furthermore the
company has achieved turnover of INR14 crore in FY18
(Provisional).
Short term revenue visibility from its current order book
position: The company has satisfactory order book of INR16.68
crore as on April 30, 2018 and the same is likely to be completed
by March 2019.
Leveraged capital structure and weak debt coverage indicators:
The capital structure of the company stood leveraged as the debt
equity ratio of the company stood at 2.54x as on March 31, 2017
due to borrowing of vehicle loans from banks and NBFC's in FY17
and relatively low tangible net worth. Due to the above said
factor, the overall gearing ratio of the company deteriorated
from 0.31x as on March 31, 2015 to 4.76x as on March 31, 2017
Total debt/ GCA of the company deteriorated from 2.11x in FY16 to
10.34x in FY17 due to increase in total debt levels at the back
of availing of vehicle loans and unsecured loan. The PBILDT
interest coverage ratio of the company stood comfortable as at
the end of FY17 at 20.99x due to relatively lower interest costs.
Working capital intensive nature of operations: Though the
company operates in working capital intensive business, the
operating cycle of the company stood satisfactory during review
period. The average collection period days of the company
improved from 294 days in FY16 to 45 days in FY17, at the back of
realization of receivables outstanding in FY16. The average
inventory days of the company also improved as the company uses
just-in-time method of purchase i.e. the company purchases raw
materials as and when required. The company makes payment to its
suppliers within 60-80 day from the date of invoice.
Tender based nature of operations: The revenues of the company
are dependent on the ability of the management to bid
successfully for the tenders and execute the same effectively.
However, the promoter's long experience in the industry for more
than one decade mitigates the risk to an extent. Nevertheless,
there are numerous fragmented & unorganized players operating in
the segment which makes the civil construction space highly
competitive.
Profitability margins are susceptible to fluctuation in raw
material prices: Profitability margins are susceptible to
fluctuation in raw material prices due to absence of price
variation clause in the contracts entered into by the company.
Key Rating Strengths
Experienced promoter for more than one decade in construction
industry: Telangana based, Vanamaali Infra Private Limited (VIPL)
was promoted by Mr. T. Subbareddy (Managing Director) and Mrs. T.
Anuradha (Director). Mr. T. Subbareddy is vastly experienced in
both the practical aspects of civil construction and in the
management and strategic decision making of the company. He has
16 years of experience in executing various projects of road
formation works, Earth Works & Other civil works in the states of
Andhra Pradesh, Karnataka, Tamil Nadu & Orissa. Presently he
looks after execution of projects & administration matters of the
company. Due to presence in the market for more than sixteen
years, the promoter have good relations with its suppliers and
through promoter's experience in construction industry helps the
company to execute the work orders in timely manner. The company
has experienced management.
Improved PBILDT margins albeit fluctuating PAT margins: PBILDT
margin of the company has been increased from 6.97% to 8.60% in
FY17 on account of the company has stopped undertaking sub-
contracts in which the margins are relatively low as compared to
government contracts. However, PAT margin of the company reduced
from 4.82% in FY15 and FY16 to 4.48% in FY17 due to increase in
interest costs on back of increased debt and increase in
depreciation provisions as company purchased new machinery.
Stable outlook of civil construction industry: The construction
industry contributes around 8% to India's Gross domestic product
(GDP). Growth in infrastructure is critical for the development
of the economy and hence, the construction sector assumes an
important role. The sector was marred by varied challenges during
the last few years on account of economic slowdown, regulatory
changes and policy paralysis which had adversely impacted the
financial and liquidity profile of players in the industry. The
Government of India has undertaken several steps for boosting the
infrastructure development and revives the investment cycle. The
same has gradually resulted in increased order inflow and
movement of passive orders in existing order book. The focus of
the government on infrastructure development is expected to
translate into huge business potential for the construction
industry in the long-run. In the short to medium term (1-3
years), projects from transportation and urban development sector
are expected to dominate the overall business for construction
companies. The implementation of Goods and Service Tax might
result in short run operational issues and pressure on working
capital until the process is streamlined. Going forward,
companies with better financial flexibility would be able to grow
at a faster rate by leveraging upon potential opportunities.
Vanamaali Infra Private Limited (VIPL) was incorporated on March
14, 2013 as a Private Limited Company by Mr. T. Subbareddy
(Managing Director) and his spouse, Mrs. T. Anuradha (Director).
The company has its registered office located at at Kondapur,
Hyderabad Telangana. VIPL is engaged in civil construction work
such as road formation, earth works, detailed design of roads,
intersections, drainage, airport pavements, land development
infrastructure and excavation works. The company has executed
several projects across Andhra Pradesh, Telangana, Maharashtra,
Karnataka and Gujarat, and has extensive experience in excavation
works, quarrying, controlled and other forms of blasting. As on
April 30th, 2018, the company has an order book of INR16.68 crore
approximately expected to be executed by March 2019.
VGS ENTERPRISES: CARE Assigns B+ Rating to INR5cr LT Loan
---------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of VGS
Enterprises, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank
Facilities 5.00 CARE B+; Stable Assigned
Short Term Bank
Facilities 7.00 CARE A4 Assigned
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of VGS Enterprises
are primarily constrained by the small and fluctuating scale of
operations with low partners' capital base, low profitability
margins, leveraged capital structure, weak debt coverage
indicators. The ratings are further constrained by highly
competitive nature of industry and fortunes linked to the steel
industry which is cyclical in nature. The ratings, however, draws
comfort from experienced partners and moderate operating cycle.
Going forward; the ability of the firm to profitably increase its
scale of operations while improving its capital structure
shall be the key rating sensitivities.
Detailed description of the key rating drivers
Key rating weaknesses
Small and fluctuating scale of operations with low net worth
base: The scale of operations stood small marked by a total
operating income and gross cash accruals of INR34.77 crore and
INR0.25 crore respectively in FY17 (FY refers to the period April
1 to March 31). Furthermore, firm's total operating income has
been fluctuating over the past three financial years (FY15-FY17).
TOI has registered a decline in FY16 over previous financial
year; thereafter registered a growth in FY17 owing to higher
quantity sold. Further, the partner's capital base stood low at
INR3.72 crore as on March 31, 2017. The small scale limits the
firm's financial flexibility in times of stress and deprives it
from scale benefits. The firm has achieved TOI of about Rs.27.47
crore for 11MFY18 (refers to April 1 to February 28; based on
provisional results).
Low profitability margins, leveraged capital structure and weak
coverage indicators: The profitability margins of the firm as
marked by PBILDT and PAT margin stood low at around 3.50% and
0.40% respectively for low for the past three financial years
(FY15-FY17) mainly on account of competitive nature of industry.
The capital structure of the firm as characterized by overall
gearing has stood leveraged for past three past three balance
sheet date, i.e., March 31, '15-'17 owing to low capital base
coupled with high reliance on working capital limits. Overall
gearing ratio (including acceptances) of the firm stood high at
3.80x as on March 31, 2017 and showing improvement 4.50x as on
March 31, 2016 mainly on account of infusion of funds as capital
coupled with retention of profits to reserves. Further, owing to
high debt levels against the profitability position, the debt
service coverage indicators stood weak marked by interest
coverage and total debt to GCA of 1.24x and 28.01x for FY17.
Highly competitive nature of industry: VGSE operates in a highly
competitive industry marked by the presence of a large number of
players in the unorganized sector. VGSE's pricing power is
restricted with limited ability to pass on any increase
in the input cost due to intense competition.
Fortunes linked to the steel industry, which is cyclical in
nature: Prospects of steel industry are strongly co-related to
economic cycles. Demand for steel products is sensitive to trends
of particular industries such as automotive, construction,
infrastructure, etc., which are the key consumers of steel
products. When downturns occur in these economies or sectors,
steel industry may witness decline in demand, which may lead to
decrease in steel prices putting pressure on the company.
Key rating strengths
Experienced Partners: VGSE is being managed by Mr Arun Kumar
Gupta, Mr Vaibhav Gupta and Mr Saurabh Gupta. Mr Arun Kumar Gupta
has around four decades of experience in the industry through his
association with the firm and other family run business. Mr
Vaibhav Gupta and Mr Saurabh Gupta has around two decades of
experience and one decade of experience respectively in the
industry through his association with the firm.
Moderate operating cycle: The firm keep adequate inventory of
around 1-2 months for smooth functioning of its manufacturing
process. The firm allows credit period of around 2 months to its
customers owing to low bargaining power due to competitive nature
of industry. On the contrary, the suppliers are majorly backed by
letter of credit having maximum usance up to 90 days. The average
working capital limits of the firm remained around 90% utilized
for the past 12 months ended November, 2017.
Ghaziabad, Uttar Pradesh-based VGS Enterprises was established in
1997 as a partnership firm. The firm is currently managed by Mr.
Arun Gupta, Mr. Vaibhav Gupta and Mr. Saurabh Gupta sharing
profit and losses equally. VGSE is engaged in the trading and
manufacturing of steel products and processing of pre-painted
galvanised iron sheets and galvanised plain sheets/coils. The
firm's manufacturing facility is situated at Ghaziabad (Uttar
Pradesh) having installed capacity of 10000 metric tons annually
as on November 30, 2017. VGSE mainly sells the products to
manufacturing and construction companies. Reflect Scrupt Private
Limited is the group concern of VGSE engaged in manufacturing of
garments.
===============
M A L A Y S I A
===============
1MDB: Ordered to Come Clean on Ability to Service Debts
-------------------------------------------------------
The Star Online reports that new Finance Minister Lim Guan Eng
has ordered 1Malaysia Development Bhd (1MDB) to brief him on the
company's ability to make the MYR143.75 million interest payment
due on May 30.
"Besides the MYR143.75mil that is due at the end of the month,
another MYR810.21mil worth of interest is due between the months
of September and November," the Star quotes Mr. Lim as saying.
According to the Star, Mr. Lim said on May 21 that he was
informed by Treasury officials that the government had been
making debt payments on behalf of 1MDB since April 2017.
He was speaking to reporters on his first day as Finance
Minister.
The Star Online relates that the former Penang chief minister
said he had earlier on May 22 held a series of meetings with top
Treasury officials led by Datuk Siti Zauyah Mohd Desa and
separately with Auditor-General Tan Sri Madinah Mohamad.
To date, the ministry has made MYR6.98bil of payments for 1MDB,
including the MYR5.05bil that was part of the International
Petroleum Investment Corp settlement, the report discloses.
"Arul Kanda has to date insisted that 1MDB is fully able to
service its debt obligations," Mr. Lim said, adding that he was
informed that Arul remains as president of 1MDB until June 30.
Mr. Lim said he had requested 1MDB directors Datuk Kamal Mohd Ali
and Datuk Norazman Ayob to brief the ministry on the company's
current state of affairs, the Star relays.
"There were complaints that certain 'red' files that were only
accessible to certain parties which impeded officials and
auditors from carrying out their professional responsibilities
with integrity," the report quotes Mr. Lim as saying.
He added that it was clear that the previous government had
"conducted an exercise of deception", not just over 1MDB, and
misrepresented the financial situation in Parliament.
"I have directed that all accounts must be accessible to both
Treasury and the Auditor-General," Lim said.
Mr. Lim was sworn in as Finance Minister on May 21, the Star
notes.
About 1MDB
Kuala Lumpur-based 1Malaysia Development Bhd (1MDB) operates as a
government agency. The Company offers financial assistance,
analysis, and advice through investors, corporations, and
consultants to startups and growth companies. 1MDB focuses on
investments with strategic value and high multiplier effects on
the economy, particularly in energy, real estate, tourism, and
agribusiness.
As reported in the Troubled Company Reporter-Asia Pacific on
July 23, 2015, Reuters said Singapore Police Force has frozen two
bank accounts to help with an investigation in to Malaysia's
troubled state-owned investment fund 1Malaysia Development Bhd
(1MDB), which is being probed by authorities in Malaysia for
financial mismanagement and graft. Reuters said the freezing of
the Singapore bank accounts follows a similar move in Malaysia
where a task force investigating 1MDB said earlier in July that
it had frozen half a dozen bank accounts following a media report
that nearly $700 million had been transferred to an account of
Malaysia's Prime Minister Najib Razak.
The Wall Street Journal reported on July 3, 2015, that
investigators looking into 1MDB had traced close to US$700
million of deposits moving through Falcon Bank in Singapore into
personal bank accounts in Malaysia belonging to Najib.
The TCR-AP, citing Bloomberg News, reported on Nov. 26, 2015,
that 1MDB agreed to sell its power assets to China General
Nuclear Power Corp. for MYR9.83 billion ($2.3 billion) as the
state investment company moved one step closer to winding down
operations after its mounting debt raised investor concern.
Bloomberg related that the company faced cash-flow problems after
a planned initial public offering of Edra faced delays amid
unfavorable market conditions, President Arul Kanda said Oct. 31,
2015. The listing plan was later canceled as the company opted
for a sale of the assets, Bloomberg noted.
The TCR-AP, citing The Wall Street Journal, reported on April 27,
2016, that the company defaulted on a $1.75 billion bond issue,
triggering cross defaults on two other Islamic notes totaling
MYR7.4 billion ($1.9 billion).
Asian Nikkei Review reported in June 2016 that Malaysia has
replaced the board of 1Malaysia Development Berhad with treasury
officials, paving the way for the dissolution of the troubled
state investment fund.
=================
S I N G A P O R E
=================
HYFLUX LTD: Seeks Court Supervised Process for Reorganisation
-------------------------------------------------------------
Hyflux Ltd. announced on May 22 that the Company and five of its
subsidiaries, namely Hydrochem (S) Pte Ltd, Hyflux Engineering
Pte Ltd, Hyflux Membrane Manufacturing (S) Pte. Ltd., Hyflux
Innovation Centre Pte. Ltd. and Tuaspring Pte. Ltd. have applied
to the High Court of the Republic of Singapore pursuant to
Section 211B(1) of the Singapore Companies Act to commence a
court supervised process to reorganize their liabilities and
businesses. The Company is taking this step in order to protect
the value of its businesses while it reorganises its liabilities.
The Company has engaged WongPartnership LLP as legal advisors and
Ernst & Young Solutions LLP as financial advisors in this
process.
Rationale for Commencement of Court Supervised
Reorganisation Process
As mentioned in the Company's announcement on Feb. 27, 2018, the
oversupply of gas in the Singapore market has resulted in
depressed electricity prices, which has adversely impacted the
Group's financial performance in 2017. The impact of the weak
Singapore power market continued to drive losses for the Group in
the first quarter of 2018, as announced by the Company on 9 May
2018.
This prolonged weakness has led to increasing strain on the
Group's finances, resulting in short-term liquidity constraints
in recent weeks. This has been compounded by restrictions on the
repatriation of monies into Singapore from projects overseas, as
well as increasing amounts having to be placed in fixed deposit
accounts as a requirement for performance bonds to be issued or
renewed in support of the existing projects.
The Board of Directors has been advised, and is of the view that,
to address these challenges, preserve value and maintain a
sustainable capital structure, a transparent and court supervised
reorganization process is in the best interest of all of the
Company's stakeholders. In particular, the Board of Directors
is of the belief that the Applications, if granted, will provide
space and room for the Group to continue their business
operations in the ordinary course, and to work with key
stakeholders and advisors to pursue the reorganisation process
which includes ongoing discussions with strategic investors and
asset divestments.
Among other things, the Applicants seek the following orders in
the Applications (the "Moratorium"), that for a period of six
months from the date of the Applications or until further order:
(a) no proceedings in Singapore (or seated in Singapore, as the
case may be), whether before a court, arbitral tribunal or
administrative agency, and whether current, pending or threatened
against the Applicants, shall be commenced or continued against
the Applicants;
(b) no appointment of a receiver or manager over any property or
undertaking of the Applicants shall be made;
(c) no execution, distress or other legal process shall be
commenced, continued or levied against any property of the
Applicants;
(d) no step to enforce any security over any property of the
Applicants, or to repossess any goods held by the Applicants
under any chattels leasing agreement, hire-purchase agreement, or
retention of title agreement shall be taken; and
(e) no right of re-entry or forfeiture under any lease in respect
of any premises occupied by the Applicants shall be enforced,
including any enforcement that may be taken pursuant to Sections
18 or 18A of the Conveyancing and Law of Property Act (Cap. 61).
Pursuant to Section 211B(8) of the Companies Act, upon the making
of the Applications, the Moratorium would automatically be in
effect for 30 days commencing from the date of the Applications,
or until the date the Court decides the Applications, whichever
is earlier. During the Moratorium, no order may be made and no
resolution may be passed for the winding up of the Applicants.
The Company and these selected subsidiaries will continue to work
closely with all of their respective creditors to achieve the
best possible outcome for all interested parties, in order to
establish a foundation for long-term stability and success.
Further material developments in relation to this reorganisation
process will be shared by the Company via SGXNET as and when they
arise.
As part of the reorganisation process, the Board of Directors
will be working with its advisors to conserve its cash and only
make payments critical to the continued operation of the Group's
businesses. In this connection, the Company has been advised that
the payment of the distribution on its SGD500 million 6.00%
Perpetual Capital Securities (SGX:BTWZ) which will be due on
May 28, 2018 (on account of May 27, 2018 falling on a Sunday)
should not be made at this point in time.
Request for Trading Suspension
Trading in the Company's shares and securities listed on the SGX-
ST has been halted since May 21, 2018. As the Company's financial
position remains unclear pending the outcome of the court
supervised reorganisation process, the Company has also requested
for a voluntary trading suspension of its shares and securities
listed on the SGX-ST in order to protect the interests of each
stakeholder group, and to avoid a potential situation where
trading in such shares and securities may occur in the absence of
complete information on the ongoing reorganisation process. The
Company intends to request for a lifting of the trading
suspension as soon as it is appropriate to do so without
compromising the interests of any stakeholder group.
Singapore-based Hyflux Ltd -- https://www.hyflux.com/ -- provides
various solutions in water and energy areas worldwide. The
company operates through two segments, Municipal and Industrial.
The Municipal segment supplies a range of infrastructure
solutions, including water, power, and waste-to-energy to
municipalities and governments. The Industrial segment supplies
infrastructure solutions for water to industrial customers.
*********
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.
Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman,
Editors.
Copyright 2018. 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.
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