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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, July 26, 2018, Vol. 21, No. 147
Headlines
A U S T R A L I A
ANDERSON WASTE: First Creditors' Meeting Set for Aug. 1
FSG Australia: Second Creditors' Meeting Set for August 3
HENNINGS PTY: Second Creditors' Meeting Set for August 1
MEREDITH TRANSPORT: First Creditors' Meeting Set for Aug. 1
PEPPER RESIDENTIAL No.21: S&P Gives Prelim B Rating to F Notes
PIPEART PTY: First Creditors' Meeting Set for August 2
PROMEQ PTY: Second Creditors' Meeting Set for August 6
SQUIRES ENTERPRISES: First Creditors' Meeting Set for July 31
SYNDROM HOLDINGS: First Creditors' Meeting Set for Aug. 2
C H I N A
SUNAC CHINA: S&P Rates Proposed U.S. Dollar Senior Notes 'B'
H O N G K O N G
CHINA FISHERY: Sale Procedures for Golf Club Membership Approved
I N D I A
AB COMPOSITES: Ind-Ra Lowers Long-Term Issuer Rating to 'BB-'
ALKA FASHIONS: Ind-Ra Migrates 'B+' LT Rating to Non-Cooperating
ALLIED FIBRE: Ind-Ra Maintains 'D' LT Rating in Non-Cooperating
ALPINE DISTILLERIES: Ind-Ra Cuts Long Term Issuer Rating to 'BB'
AMAR JYOTI: CRISIL Keeps B- Rating in Not Cooperating Category
ANUBHAV TRADING: CRISIL Maintains B Rating in Not Cooperating
APG SHIMLA: CARE Lowers Rating on INR46.81cr LT Loan to D
ARG ROYAL: CARE Reaffirms B+ Rating on INR6.68cr LT Loan
BHAVANI RICE: CARE Lowers Rating on INR7cr LT Loan to D
BMW LOGISTICS: Ind-Ra Affirms BB+ Issuer Rating, Outlook Stable
C. NATARAJAN: CRISIL Maintains B Rating in Not Cooperating
CAPSHARE IMPEX: CRISIL Lowers Rating on INR5cr Loan to D
CHOOSY FASHIONS: CRISIL Maintains B Rating in Not Cooperating
CITY MAX: CRISIL Maintains B- Rating in Not Cooperating Category
DYNAMIC BUILDING: CRISIL Maintains B Rating in Not Cooperating
EARTHEN TREASURES: CARE Migrates D Rating to Not Cooperating
GAYATRI AGRO: CRISIL Maintains B Rating in Not Cooperating
GEMINI ENTERPRISES: CRISIL Maintains B Rating in Not Cooperating
GODHANI GEMS: CRISIL Maintains D Rating in Not Cooperating
GVR NUTRIES: CRISIL Maintains B Rating in Not Cooperating
HAVELI ENTERTAINMENTS: CRISIL Keeps B- Rating in Not Cooperating
HEMNIL METAL: CRISIL Maintains D Rating in Not Cooperating
HI-QUALITY FOODS: CRISIL Lowers Rating in INR15cr Term Loan to C
INCREDIBLE REALCON: CARE Lowers Rating on INR600cr Loan to B(SO)
INDORE TREASURE: Ind-Ra Withdraws 'BB+' Long Term Issuer Rating
J.N. TAYAL: CARE Lowers Rating on INR6.29cr LT Loan to B+
J. M. FEED: CRISIL Maintains D Rating in Not Cooperating Category
JADWET RESORTS: CRISIL Migrates B Rating from Not Cooperating
JANAA INDUSTRIES: CRISIL Reaffirms B+ Rating on INR3.6cr Loan
JAYPEE INFRATECH: High Court Reserves Verdict in Homebuyer Case
K.P. CHACKO: CARE Reaffirms B+ Rating on INR17cr LT Loan
KANAK GINNING: CARE Assigns B Rating to INR6.77cr LT Loan
KDM CLOTHING: Ind-Ra Affirms BB- LT Issuer Rating, Outlook Stable
KUNA IMPEX: Ind-Ra Hikes Long Term Issuer Rating to 'BB'
LIBRA AUTOCAR: CARE Lowers Rating on INR10cr LT Loan to C
MAHA ELECTRONICS: CRISIL Lowers Rating on INR15cr Cash Loan to D
MAXIMA TRADERS: CARE Lowers Rating on INR42.50cr LT/ST Loan to D
N J EXPORTS: CRISIL Maintains B Rating in Not Cooperating
NAMASTE EXPORTS: CRISIL Reaffirms B Rating on INR7.5cr Loan
PAVANI POLYMERS: CRISIL Maintains 'D' Rating in Not Cooperating
RANASARIA POLYPACK: Ind-Ra Affirms BB+ LT Rating, Outlook Stable
RATNAGIRI CHEMICALS: CRISIL Maintains D Rating in Not Cooperating
ROJA NOTE: CRISIL Reaffirms B+ Rating on INR5cr Cash Loan
SENTO VITRIFIED: CRISIL Reaffirms B+ Rating on INR17cr Term Loan
SESA MINERALS: CRISIL Withdraws B+ Rating on INR20cr Loan
SHIV SHAKTI: CARE Reaffirms B+ Rating on INR25cr LT Loan
SHIVA RAJU: CARE Assigns B Rating to INR9.99cr LT Loan
SHREE VARDHMAN: Ind-Ra Withdraws 'D' Long Term Issuer Rating
SHREENIDHI METALS: CARE Assigns B+ Rating to INR6.22cr LT Loan
SHYAM TEA: CARE Lowers Rating on INR6.90cr LT Loan to B
SREE SREE: CRISIL Maintains B Rating in Not Cooperating Category
SRI KAILASANADHA: CRISIL Maintains D Rating in Not Cooperating
SUPER SHIV: CARE Assigns D Rating to INR32.44cr LT Loan
ZEE KNITS: Ind-Ra Maintains 'BB' Issuer Rating in Non-Cooperating
* INDIA: Housing Downturn Puts $20BB in Bank Loans at Risk
M A L A Y S I A
TEK SENG: Says Suspension of Solar Business Won't Trigger PN17
N E W Z E A L A N D
MATRIX HOMES: Receivership Offers Lessons for Industry
- - - - -
=================
A U S T R A L I A
=================
ANDERSON WASTE: First Creditors' Meeting Set for Aug. 1
-------------------------------------------------------
A first meeting of the creditors in the proceedings of Anderson
Waste Services Pty Limited will be held at the offices of Amos
Insolvency, 25/ 185 Airds Road, in Leumeah, NSW, on Aug. 1, 2018,
at 11:00 a.m.
Peter Andrew Amos of Amos Insolvency was appointed as
administrator of Anderson Waste Services on July 20, 2018.
FSG Australia: Second Creditors' Meeting Set for August 3
---------------------------------------------------------
A second meeting of creditors in the proceedings of FSG Australia
has been set for Aug. 3, 2018, at 10:00 a.m. at The Auditorium,
SCC Conference Centre, 1 Griffith Way, in Southport, Queensland.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Aug. 2, 2018, at 4:00 p.m.
John Park and Joanne Dunn of FTI Consulting were appointed as
administrators of FSG Australia on June 30, 2018.
HENNINGS PTY: Second Creditors' Meeting Set for August 1
-------------------------------------------------------
A second meeting of creditors in the proceedings of Hennings Pty
Limited has been set for Aug. 1, 2018, at 10:30 a.m. at the
offices of Pitcher Partners, Level 22, 19 Martin Place, in
Sydney, NSW.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by July 31, 2018, at 4:00 p.m.
Paul Gerard Weston of Pitcher Partners was appointed as
administrator of Hennings Pty on June 28, 2018.
MEREDITH TRANSPORT: First Creditors' Meeting Set for Aug. 1
-----------------------------------------------------------
A first meeting of the creditors in the proceedings of Meredith
Transport Pty Ltd, trading as Wholesale Garage Burpengary, will
be held at the offices of Morton's Solvency Accountants, Level
11, 410 Queen Street, in Brisbane, on Aug. 1, 2018, at 11:00 a.m.
Gavin Charles Morton of Morton's Solvency was appointed as
administrator of Meredith Transport on July 23, 2018.
PEPPER RESIDENTIAL No.21: S&P Gives Prelim B Rating to F Notes
--------------------------------------------------------------
S&P Global Ratings assigned its preliminary ratings to nine
classes of nonconforming and prime residential mortgage-backed
securities (RMBS) to be issued by Permanent Custodians Ltd. as
trustee of Pepper Residential Securities Trust No.21. Pepper
Residential Securities Trust No.21 is a securitization of
nonconforming and prime residential mortgages originated by
Pepper HomeLoans Pty Ltd.
The preliminary ratings reflect:
-- S&P's view of the credit risk of the underlying collateral
portfolio, including its view that the credit support is
sufficient to withstand the stresses it applies. The credit
support for the rated notes comprises note subordination.
Subordination provided to the 'AAA (sf)' rated notes is in
excess in S&P's opinion of the minimum 'AAA (sf)' level of
credit support.
-- The underwriting standard and centralized approval process of
the seller, Pepper Homeloans.
-- The availability of a retention amount, amortization amount,
and yield reserve, which will all be funded by excess spread,
but at various stages of the transaction's term. They will
have separate functions and timeframes, including reducing
the balance of senior notes, reducing the balance of the most
subordinated notes, and paying senior expenses and interest
shortfalls on the class A notes.
-- S&P's expectation that the various mechanisms to support
liquidity within the transaction, including a liquidity
facility equal to 2.5% of the outstanding balance of the
notes, and principal draws, are sufficient under our stress
assumptions to ensure timely payment of interest.
-- The condition that a minimum margin will be maintained on the
assets.
-- The benefit of a cross-currency swap to hedge the mismatch
between the Australian dollar receipts from the underlying
assets and the U.S. dollar payments on the class A1-u notes.
The issuer has not informed S&P Global Ratings Australia Pty Ltd.
whether the issuer is publically disclosing all relevant
information about the structured finance instruments that are
subject to this rating report or whether relevant information
remains non-public.
PRELIMINARY RATINGS ASSIGNED
Class Rating Amount (mil.)
A1-s AAA (sf) A$105.0
A1-u AAA (sf) US$175.0
A1-a AAA (sf) A$147.0
A2 AAA (sf) A$99.0
B AA (sf) A$51.0
C A (sf) A$21.5
D BBB (sf) A$15.0
E BB (sf) A$9.5
F B (sf) A$7.0
G NR A$7.0
NR--Not rated.
The exchange rate applicable to the class A1-u notes is US$0.7353
per Australian dollar.
PIPEART PTY: First Creditors' Meeting Set for August 2
------------------------------------------------------
A first meeting of the creditors in the proceedings of Pipeart
Pty Ltd will be held at the offices of PCI Partners Pty Ltd,
Level 8, 179 Queen Street, in Melbourne, Victoria, on Aug. 2,
2018, at 3:30 p.m.
Philip Newman of PCI Partners was appointed as administrator of
Pipeart Pty on July 23, 2018.
PROMEQ PTY: Second Creditors' Meeting Set for August 6
------------------------------------------------------
A second meeting of creditors in the proceedings of Promeq Pty
Ltd has been set for Aug. 6, 2018, at 10:00 a.m. at the offices
of SV Partners WA, Ground Floor, Suite 7, 26 St Georges Terrace,
in WA.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the
Company be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Aug. 3, 2018, at 5:00 p.m.
Malcolm Field of SV Partners was appointed as administrator of
Promeq Pty on July 2, 2018.
SQUIRES ENTERPRISES: First Creditors' Meeting Set for July 31
-------------------------------------------------------------
A first meeting of the creditors in the proceedings of Squires
Enterprises WA Pty Ltd, trading as Scarborough Beach Bar, will be
held at the offices of QV1 Theatrette Room, Level 2, 250 St
Georges Terrace, in Perth, WA, on July 31, 2018, at 9:30 a.m.
Jimmy Trpcevski of WA Insolvency Solutions was appointed as
administrator of Squires Enterprises on July 19, 2018.
SYNDROM HOLDINGS: First Creditors' Meeting Set for Aug. 2
---------------------------------------------------------
A first meeting of the creditors in the proceedings of Syndrom
Holdings Pty. Ltd., trading as trustee for the K T P Property
Trust, will be held at the offices of Dye & Co. Pty Ltd, 165
Camberwell Road, in Hawthorn East, East Victoria, Australia on
Aug. 2, 2018, at 10:00 a.m.
Nicholas Giasoumi and Roger Darren Grant of Dye & Co. were
appointed as administrators of Syndrom Holdings on July 25, 2018.
=========
C H I N A
=========
SUNAC CHINA: S&P Rates Proposed U.S. Dollar Senior Notes 'B'
------------------------------------------------------------
S&P Global Ratings assigned its 'B' long-term issue rating to the
U.S. dollar senior notes that Sunac China Holdings Ltd.
(B+/Stable/--) proposes to issue. Sunac will use the proceeds to
refinance its existing indebtedness and for general corporate
purposes.
S&P said, "We rate the notes one notch below the issuer credit
rating on Sunac to reflect structural subordination risk. The
issue ratings are subject to our review of the final issuance
documentation.
"Sunac's financial performance in 2017 was better than our
expectation. We estimate that the company's see-through debt-to-
EBITDA ratio, which includes the attributable non-consolidated
financial data of joint ventures and associates, improved to 15x
in 2017, from about 19x in 2016.
"We expect Sunac's leverage to further improve in 2018, driven by
revenue growth from strong contracted sales in the past 24
months, improving margins, and reduced land purchases and new
investments. However, the improvement in leverage is likely to be
moderated by the fast growth in the company's scale. In addition,
opportunistic acquisitions in core and non-core businesses
constrain the company's credit profile."
================
H O N G K O N G
================
CHINA FISHERY: Sale Procedures for Golf Club Membership Approved
----------------------------------------------------------------
Judge James L. Garrity, Jr. of the U.S. Bankruptcy Court for the
Southern District of New York authorized the sale procedures of
China Fishery Group Ltd. (Cayman) and affiliates in connection
with the sale of its corporate membership at the Hong Kong Golf
Club, memorialized by Certificate No. 1024.
The Sale Procedures for Sale Transactions are:
a. Upon execution of the Confirmation Agreement and the
Purchase Agreement, the Debtors will file the Transaction Notice
with the Court and serve a copy thereof on the Sale Notice
Parties;
b. The parties receiving a Transaction Notice will have 20
calendar days after the service of a Transaction Notice to file
and
serve any objections to the Sale Transaction;
c. If any material economic term of the Sale Transaction is
amended after transmittal of the Transaction Notice, but prior to
the expiration of the Notice Period, the Debtors will serve a
revised Transaction Notice on all parties that received the
Transaction Notice describing the proposed Sale Transaction, as
amended. If a revised Transaction Notice is required, the Notice
Period will be extended for an additional seven calendar days;
d. Any objections to the Sale Transaction must be filed by
4:00 p.m. (ET) on the last day of the Notice Period;
e. If an Objection is properly filed and served: (i) the
Objection will be deemed a request for a hearing on the Sale
Transaction, as applicable, and the Objection will be heard at
the next scheduled omnibus hearing in these chapter 11 cases that
is at least 14 calendar days after service of the Objection; and
(ii) the Sale Transaction may not proceed absent (a) written
withdrawal of the Objection or (b) entry of an order by the Court
specifically approving the Sale Transaction;
f. If no Objection is timely filed and served, PAIH will be
deemed to be fully authorized by the Court to consummate the Sale
Transaction, and no further notice or Court approval will be
required to consummate the Sale Transaction;
g. The Debtors may consummate the Sale Transaction prior to
expiration of the Notice Period only if they obtain written
consent to the Sale Transaction from each of the Sale Notice
Parties party that received a Transaction Notice.
h. Upon consummation of the Sale Transaction, the purchaser
will take the Golf Club Membership sold by the Debtors pursuant
to the Sale Procedures and subject to the terms of the
documentation executed in connection with the Sale Transaction.
The Debtors' sale of the Golf Club Memberships will be free and
clear of liens.
Notwithstanding any applicability of Bankruptcy Rule 6004(h), the
terms and conditions of the Order will be immediately effective
and enforceable upon its entry. The Sale Transaction will be
deemed authorized pursuant to the terms of this Order and no
further or additional waivers of the 14-day stay of Bankruptcy
Rule 6004(h) will be required for the Debtors to consummate the
Sale Transaction, subject to compliance with the Sale Procedures.
About China Fishery Group Limited (Cayman)
China Fishery Group Limited (Cayman) and its affiliates sought
protection under Chapter 11 of the Bankruptcy Code (Bankr.
S.D.N.Y. Lead Case No. 16-11895) on June 30, 2016.
In the petition signed by CEO Ng Puay Yee, China Fishery Group
estimated its assets at $500 million to $1 billion and debt at
$10 million to $50 million.
The cases are assigned to Judge James L. Garrity Jr.
Weil, Gotshal & Manges LLP has been tapped to serve as lead
bankruptcy counsel for China Fishery and its affiliates other
than CFG Peru Investments Pte. Limited (Singapore). Weil Gotshal
replaces Meyer, Suozzi, English & Klein, P.C., the law firm
initially hired by the Debtors. The Debtors have also tapped
Klestadt Winters Jureller Southard & Stevens, LLP, as conflict
counsel; Goldin Associates, LLC, as financial advisor; RSR
Consulting LLC as restructuring consultant; and Epiq Bankruptcy
Solutions, LLC, as administrative agent. Kwok Yih & Chan serves
as special counsel.
On Nov. 10, 2016, William Brandt, Jr., was appointed as
Chapter 11 trustee for CFG Peru Investments Pte. Limited
(Singapore), one of the Debtors. Skadden, Arps, Slate, Meagher &
Flom LLP serves as the trustee's bankruptcy counsel; Hogan
Lovells US LLP serves as special counsel; and Quinn Emanuel
Urquhart & Sullivan, LLP, serves as special litigation counsel.
=========
I N D I A
=========
AB COMPOSITES: Ind-Ra Lowers Long-Term Issuer Rating to 'BB-'
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) downgrades A B Composites Pvt
Ltd.'s (ABCPL) Long-Term Issuer Rating to 'IND BB-' from 'IND
BB'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR40 mil. Fund-based limits downgraded with IND BB-/Stable
rating; and
-- INR15 mil. Non-fund based limits affirmed with IND A4+
rating.
KEY RATING DRIVERS
The downgrade reflects deterioration in ABCPL's credit profile to
weak from moderate levels due to a decline in absolute EBITDA.
According FY18 provisional financials, interest coverage
(operating EBITDA/gross interest expense) was 1.6x (FY17: 2.4x),
net leverage ratio (net debt/operating EBITDA) was 7.5x (4.0x)
and operating EBITDA was INR6.62 million (INR10.41 million).
Also, the entity's scale of operations remains small with revenue
falling to INR236 million in FY18 (FY17: INR248 million) due to
the impact of goods and services tax implementation.
The return on capital employed of the company was 5.3% in FY18
(FY17: 9%) and EBITDA margin was modest at 2.80% (4.19%).
The weak profile of ABCPL is attributed to its limited capacity
and high customer concentration. The company generates around 90%
of its revenue from Indian Railways.
The ratings however are supported by ABCPL's comfortable
liquidity, as reflected from its average utilization of the fund-
based facilities of 91% for the last one year ended June 2018.
The ratings are also supported by the company's promoters'
experience of over four decades in the molded precision
components manufacturing business.
RATING SENSITIVITIES
Negative: A further decline in the revenue along with
deterioration in the credit metrics on a sustained basis could be
negative for the ratings.
Positive: An improvement in the revenue and credit metrics on a
sustained basis could be positive for the ratings.
COMPANY PROFILE
Incorporated in 1996, ABCPL manufactures natural fiber reinforced
thermoset composites and fiber-glass reinforced plastic windows,
which are used in railway coaches. It is promoted by Mr. Ankul
Samanta and his three brothers, and has operations in Kolkata
(West Bengal).
ALKA FASHIONS: Ind-Ra Migrates 'B+' LT Rating to Non-Cooperating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Alka Fashions
Company's 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 B+ (ISSUER NOT COOPERATING)' on the agency's
website.
The instrument-wise rating action is:
-- INR50 mil. Fund-based facilities migrated to non-cooperating
category with IND B+ (ISSUER NOT COOPERATING) / IND A4
(ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
June 22, 2017. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Formed in July 2007, Alka Fashions Company is a partnership firm
engaged in manufacturing of garments and trading of fabric.
ALLIED FIBRE: Ind-Ra Maintains 'D' LT Rating in Non-Cooperating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Allied Fiber
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 these ratings. The rating will
continue to appear as 'IND D (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating actions are:
-- INR36.8 mil. Term loan (Long-term) maintained in non-
cooperating category with IND D (ISSUER NOT COOPERATING)
rating; and
-- INR29.0 mil. Fund-based limits (Long-term/Short-term)
maintained in non-cooperating category with IND D (ISSUER NOT
COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
May 20, 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 2014, Allied Fiber Industries manufacturers pet
flakes at its factory in Kashipur, Uttarakhand.
ALPINE DISTILLERIES: Ind-Ra Cuts Long Term Issuer Rating to 'BB'
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Alpine
Distilleries Private Limited's (ADPL) Long-Term Issuer Rating to
'IND BB' from 'IND BBB-'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR75 mil. Fund-based limits downgraded with IND BB/Stable
rating;
-- INR452.7 mil. (reduced from INR479.5 mil.) Term loan due on
June 2025 downgraded with IND BB/Stable rating;
-- INR170 mil. Term loan* due on June 2025 assigned with IND
BB/Stable rating;
-- INR16 mil. Fund-based limits* assigned with IND BB/Stable
rating; and
-- INR9.5 mil. Non-fund-based limits downgraded with IND A4+
rating.
*The final ratings have been assigned based on the receipt of
sanction letters provided by ADPL to Ind-Ra.
KEY RATING DRIVERS
The downgrade reflects a delay in the commissioning of ADPL's
distillery unit, leading to cost overruns of INR993.2 million as
against the projected cost of INR955.9 million and the resultant
tight liquidity position. The company nearly fully utilized its
fund-based working capital limits during the 12 months ended May
2018.
The ratings remain constrained by ADPL's medium scale of
operations. The top line grew at a CAGR of 20% over FY14-FY18 to
INR1,506 million (FY17: INR1,367 million), due to an increase in
the sale of country liquor on the back of extensive promotional
activities undertaken by the company to boost its sales. FY18
financials are provisional in nature.
The ratings are also constrained by ADPL's comfortable credit
metrics, due to low debt and average EBITDA margins of around 8%
and ROCE in the range of 11%-15%. Net leverage (net
debt/operating EBITDA) deteriorated to 3.4x in FY18 (FY17: 1.7x)
as the company availed a term loan of INR550 million in 2HFY18 to
fund the ongoing capex. However, interest coverage (operating
EBITDA/gross interest expenses) was almost stable at 5.2x in FY18
(FY17: 5.0x) since the debt was taken in 2HFY18 with majority of
loans availed in February 2018. The ROCE declined to 11% in FY18
(FY17: 15%) and EBITDA margins were 8.0% (8.3%), due to a
marginal increase in the overhead expenses.
Ind-Ra expects the credit metrics to deteriorate in FY19, on
account of the ongoing capex where a major chunk of disbursement
of INR335 million out of the total INR550 million is going to
come in 1HFY19. This will increase interest expenses, affecting
the overall credit metrics.
The ratings also factor in the West Bengal government's policy to
take over the wholesale distribution of liquor, leading to high
customer and geographic concentration risks.
The ratings also factor in the promoters' more than a decade of
experience in the liquor business.
RATING SENSITIVITIES
Positive: An improvement in the revenue and operating
profitability leading to an improvement in the net adjusted
leverage, all on a sustained basis, could be positive for the
ratings.
Negative: A sustained decline in the operating profitability
and/or a further stress on the liquidity position could be
negative for the ratings.
COMPANY PROFILE
Incorporated in 2002 as Agnes Exim Private Limited, the company
was renamed ADPL in 2008. A change in the object clause was made
to set up an Indian-made foreign liquor and country liquor
bottling plant. The company commenced operations in 2012.
AMAR JYOTI: CRISIL Keeps B- Rating in Not Cooperating Category
--------------------------------------------------------------
CRISIL has been consistently following up with Amar Jyoti
Industries Pvt Ltd (AJIPL) for obtaining information through
letters and emails dated December 31, 2017 and June 29, 2018,
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 4 CRISIL B-/Stable (ISSUER NOT
COOPERATING)
Term Loan 10.4 CRISIL B-/Stable (ISSUER NOT
COOPERATING)
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 Amar Jyoti Industries Private
Limited. This restricts CRISIL's ability to take a forward
looking view on the credit quality of the entity. CRISIL believes
that the information available for Amar Jyoti Industries Private
Limited 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 AJIPL continues to be 'CRISIL B-/Stable Issuer not
cooperating'
Incorporated in 2013, AJIPL is promoted by Mr. Amar Nath Pandey
and Mrs. Vinita Joy. The company is engaged in processing of
paddy into par-boiled rice with total capacity of 8 tonnes per
hour (TPH). The processing unit is located at Muzaffarpur
(Bihar).
ANUBHAV TRADING: CRISIL Maintains B Rating in Not Cooperating
---------------------------------------------------------------
CRISIL has been consistently following up with Anubhav Trading
(ANT) for obtaining information through letters and emails dated
December 31, 2017 and June 29, 2018, among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Proposed Cash 8 CRISIL B/Stable (ISSUER NOT
Credit Limit COOPERATING)
Proposed Long Term 1 CRISIL B/Stable (ISSUER NOT
Bank Loan Facility COOPERATING)
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 Anubhav Trading. This
restricts CRISIL's ability to take a forward looking view on the
credit quality of the entity. CRISIL believes that the
information available for Anubhav Trading 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 ANT continues to be 'CRISIL B/Stable Issuer not
cooperating'
ANT was established in 2008 as a proprietorship firm of Mr. Dilip
Kumar Jaiswal. It is an authorised distributor of electronic
appliances of various companies, such as LG Electronics India Pvt
Ltd (LG), Whirlpool of India Ltd (Whirlpool), Voltas Ltd
(Voltas), Symphony Ltd (Symphony), and Hitachi, in North Bihar.
APG SHIMLA: CARE Lowers Rating on INR46.81cr LT Loan to D
---------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
APG Shimla University (APG), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 46.81 CARE D; ISSUER NOT COOPERATING;
Facilities Revised from CARE B+; Issuer
not Cooperating, on the basis
of best available information
CARE has been seeking information from APG to monitor the
rating(s) vide e-mail communications/letters dated May 28, 2018
and numerous phone calls. However, despite CARE's repeated
requests, the company has not provided the requisite information
for monitoring the ratings. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the
publicly available information which however, in CARE's opinion
is not sufficient to arrive at a fair rating. The rating on APG
Shimla University's bank facilities will now be denoted as
CARE D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while
using the above rating(s).
The rating has been revised on account of the ongoing delays in
debt servicing of the firm due to its stretched liquidity
position and high regulation in educational sector coupled with
increasing competition.
Detailed description of the key rating drivers
The revision in the ratings takes into consideration the
following factors:
Key rating Weaknesses
Ongoing delays in debt servicing: There are ongoing delays in
servicing the debt obligations. The delays are on account of weak
liquidity as the firm is unable to generate sufficient funds on
timely manner.
High regulation in educational sector coupled with increasing
competition: In addition to AICTE, the educational institutes are
regulated by respective state governments with respect to the
number of management seats, amount of the tuition fees charged
for the government quota and management quota.
The factors have a significant impact on the revenue and
profitability of the institution. Due to increasing focus on
technical education in India, a number of colleges have been
opened up in the adjoining area like Jaypee University of
Information Technology, Maharaja Agrasen University, Shoolini
University and Manav Bharti University etc. This exposes
the revenue of APG to competition from other colleges.
APG is an educational trust formed in November 2004 by Mr Pramod
Goyal and his brother Mr Rajesh Goyal with an objective to
provide education services. The campus is located in Shimla,
spread over an area of 88 acres with all modern facilities and
latest available technology. APG is providing post-graduation,
graduation and diploma courses like engineering, management,
hotel management, architecture, journalism, law, arts, fashion
designing and mass communication. APG has started its first
academic session in September 2012. In the academic year 2015-16
(refers to the period July 01 to June 30), the total students
enrolled were 630 and cumulative student strength stood at 1,850,
compared with cumulative student strength of 1,339 for academic
year 2014-15. On account of stretched liquidity position (owing
to continued losses at the net level), the term loans of the
trust were restructured, in June 2015, wherein the society was
given additional moratorium to make repayment of the term loans
availed. APG has four group concerns namely Esteem Investment
Pvt. Ltd. (a non-banking financial company, incorporated in
1997), Invert Sugar India Pvt. Ltd. (engaged in the manufacturing
of invert sugar and caramel color, incorporated in 1994), and
Sponge Sales India Pvt. Ltd. and Meenakshi Enterprises (both
engaged in the trading of sponge iron and incorporated in 1992
and 2000, respectively).
ARG ROYAL: CARE Reaffirms B+ Rating on INR6.68cr LT Loan
--------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
ARG Royal Ensign Developers Private Limited (ARPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 6.68 CARE B+; Stable Reaffirmed;
Non-Cooperation revoked
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of ARPL continues to
remain constrained on account of implementation risk associated
with it on ongoing township project and saleability risk
associated with un-booked units as well as slow movement in
booking of its projects. The rating is, further, constrained
on account of inherent risks associated with the real estate
sector along with regional concentration of operations. The
rating, however, continues to derive strength from the
experienced management with established track record of
operations of ARG Group (ARG) and Royal Ensign Group.
The ability of ARPL to successfully complete its ongoing project
within envisaged time and cost parameters, sale of units at
envisaged price and timely receipt of the booking advances would
be key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Slow movement in booking of residential flats in the residential
real estate project 'Royal Ensign Apartments': ARPL has completed
its residential real estate project 'Royal Ensign' in Alwar in
December, 2016 with total cost of INR56.89 crore. However,
movement in the booking of its project remained slow, though
overall bookings stood moderate, as till May 31, 2018, ARPL has
booked 126 flats (97% of total units in 2BHK, 68% in 3BHK and
100% in 4BHK) for its project as against 101 flats (97% of total
units in 2BHK, 45% in 3BHK and 94% in 4BHK) till February 28,
2017. Further, with completion of the project, the company has
received booking advance of INR52.01 crore till May 31, 2018 as
against INR37.56 crore till February 28, 2017.
Project implementation risk in the case of Township project
although no movement in booking of plots: ARPL is developing a
township in Alwar with total cost of INR22.10 crore to be funded
through term loan f INR7.13 crore and customers advances of
INR4.97 crore and remaining through promoters' fund. Till May 31,
2018, ARPL has incurred INR20.10 crore towards the project funded
through term loans of INR7.13 crore, booking advances of INR2.08
crore and remaining through promoters' funds. Since, the company
has only developed common facilities and it has already incurred
majority of development cost, it has low project implementation
risk. Further, the company has already sold 26 plots which are
16% of the total plots in the township. ARPL has received INR2.08
crore (47% of sale value) for booking advance as against total
sales value INR4.43 crore of the same till May 31, 2018.
Regional concentration of operations and cyclicality in real
estate sector: The real estate sector in India is highly
fragmented with most of the real estate developers having a city-
specific or region-specific presence. Property prices in
the Rajasthan real estate market exhibited a rising trend over
last decade primarily due to the growth of industrial sector
and infrastructure development. However, prices have
stabilized/moderated over the past few months, due to a
lackluster demand from the customers, both residential and
commercial. Anticipation of a fall in property price and
interest rate has led the residential buyers postpone their
purchases post demonetization. Further, the banks have already
taken a cautious approach to the real estate lending and reduced
their exposure to the sector and hence, most developers now rely
on the private players for the project funding.
Thus, ARPL remains exposed to cyclicality associated with the
real estate industry along with area-specific concentration risk
as all the ongoing projects of the group are restricted to
Rajasthan region.
Key rating strengths
Experienced management: Mr. Atma Ram Gupta, Chief Executive
Officer (CEO), is a Chartered Accountant (CA) and Cost & Works
Accountant (CWA) by qualification and has experience of more than
two decades in the real estate industry. Established track record
of operations of 'ARG Group' and 'Royal Ensign Group': ARG Group
has presence of more than two decades in the real estate
industry, being engaged in the real estate activity since 1992.
During this period, the group has executed 27 projects at Jaipur,
Kota and Gwalior with development of residential complex,
commercial complex and shopping mall cum multiplex. The
prestigious projects executed by the group in the past were
construction of 'City Mall' at Kota and 'Dindayal City Mall' at
Gwalior.
'Royal Ensign' Group has presence in this sector since 2001.
During this period, the group has executed more than 9 projects
at Jaipur and Alwar. Some of the prestigious projects executed by
the 'Royal Ensign' group are development of City Plaza
(Multiplex), Hotel Golden Tulip, Hotel Nirwana Palace, Swami
Keshvanand Institute of Technology, Management &Gramothan and
Township named "Vinayak City" in Jaipur. At present, the group is
working on two other projects at Jaipur.
ARG Royal Ensign Developers Private Limited (ARPL) was initially
incorporated in January 2006, in the name of City Star
Hospitality Private Limited (CSHPL) which was promoted by Meel
family and belongs to Royal Ensign Group, a leading real estate
developer in Rajasthan. CSHPL had a land in Alwar (Rajasthan) on
which the company was operating a marriage garden. However,
during FY12, ARG group, real estate developer based in Jaipur and
promoted by Mr. Atma Ram Gupta, had entered in the management of
the company with a purpose to construct residential flats in
Alwar on the same land and name of the company was changed to its
current name, ARPL. Subsequently, in August 2012, 50%
shareholding in ARPL was acquired by ARG Group in the name of
"ARG Developers Private Limited" by infusion of fresh share
capital and remaining 50% is held by Meel family.
BHAVANI RICE: CARE Lowers Rating on INR7cr LT Loan to D
-------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Bhavani Rice Mill (BRM), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 7.00 CARE D Revised from
Facilities CARE B+;Stable
Detailed Rationale & Key Rating Drivers
The revision in the ratings assigned to the bank facilities of
BRM is primarily due to irregularity in servicing its debt
obligations owing to weak liquidity position.
Establishing a clear debt servicing track record with improvement
in the liquidity position remains the key rating sensitivity.
Detailed description of the key rating drivers
Key Rating Weaknesses
Ongoing delay in debt servicing: There are on-going delays in
debt servicing. There was irregularity in payment of interest for
cash credit limit.
Balva (Gujarat) based Bhavani Rice Mill (BRM) was established in
1975 as a proprietorship firm by Mr. Bhailalbhai Patel and later
converted into partnership firm. BRM is engaged in the milling
and processing of non-basmati rice. BRM is operating from its
sole manufacturing plant located in Bavla (Gujarat) having
installed paddy processing capacity of 100 Metric Tonnes per day
as on March 31, 2017.
BMW LOGISTICS: Ind-Ra Affirms BB+ Issuer Rating, Outlook Stable
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed BMW Logistics
Private Limited's (BMWLPL) Long-Term Issuer Rating at 'IND BB+'.
The Outlook is Stable.
The instrument-wise rating actions are:
-- INR110 mil. Fund-based working capital limit affirmed with
IND BB+/Stable rating; and
-- INR30 mil. Proposed fund-based working capital limits*
assigned with Provisional IND BB+/Stable rating.
* The rating is provisional and shall be confirmed upon the
sanction and execution of loan documents for the above facilities
by BMWLPL to the satisfaction of Ind-Ra.
KEY RATING DRIVERS
The affirmation reflects BMWLPL's continued modest credit metrics
in FY18. During the period, its EBITDA interest coverage
(operating EBITDA/gross interest expense) was 1.9x in FY18 (FY17:
1.8x) and net leverage (net debt/operating EBITDA) was 5.3x
(5.1x). The deterioration in the leverage was due to a
proportionately higher increase in debt than that in EBITDA.
The ratings continue to reflect volatility in revenue during
FY15-FY18. Revenue fell to INR1,099 million in FY16 from INR1,308
million in FY15. It then rose to INR1,178 million and INR1,436
million in FY17 and FY18, respectively. The rise in revenue in
FY18 was due to higher tractor sales.
The ratings also continue to reflect BMWLPL's tight liquidity,
indicated by a fund-based limit utilization of 99.70% during the
12 months ended June 2018.
The ratings remain constrained by the trading nature of
operations. Its return on capital employed was 13.0% and EBITDA
margin was average at 2.0% in FY18 (FY17: 2.1%).
The ratings, however, continue to benefit from the position of
BMWLPL as the sole dealer of International Tractors Limited's
Sonalika tractors in parts of central and eastern Uttar Pradesh
and the support extended by the BMW group to the company in the
form of corporate guarantees and unsecured loans through its
flagship entity BMW Ventures Ltd.
RATING SENSITIVITIES
Negative: Any deterioration in the EBITDA interest coverage, on a
sustained basis, could lead to a negative rating action.
Positive: Any improvement in the EBITDA interest coverage, on a
sustained basis, could lead to a positive rating action.
COMPANY PROFILE
BMWLPL is an authorized distributor of International Tractor's
Sonalika tractors in parts of central and eastern Uttar Pradesh.
Its registered and corporate offices are in Kolkata and its
branch office is in Luck now. It also provides transportation
services to group companies in Bihar through its own fleet of
trucks.
C. NATARAJAN: CRISIL Maintains B Rating in Not Cooperating
----------------------------------------------------------
CRISIL has been consistently following up with C. Natarajan
(Natarajan) for obtaining information through letters and emails
dated December 31, 2017 and June 29, 2018, among others, apart
from telephonic communication. However, the issuer has remained
non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Term Loan 8.5 CRISIL B/Stable (ISSUER NOT
COOPERATING)
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 C. Natarajan this restricts
CRISIL's ability to take a forward looking view on the credit
quality of the entity. CRISIL believes that the information
available for C. Natarajan 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
facility of Natarajan continues to be CRISIL B/Stable Issuer not
cooperating'.
Natarajan is a proprietary firm of Mr. C Natarajan. The firm
operates windmills in Tirunelveli, Tamil Nadu, with an installed
capacity of 3.225 megawatts.
CAPSHARE IMPEX: CRISIL Lowers Rating on INR5cr Loan to D
--------------------------------------------------------
CRISIL has downgraded its ratings on the bank facilities of
Capshare Impex Private Limited (CIPL) to 'CRISIL D/CRISIL D' from
'CRISIL BB-/Stable/CRISIL A4+'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 3.75 CRISIL D (Downgraded from
'CRISIL BB-/Stable')
Letter of Credit 5.00 CRISIL D (Downgraded from
'CRISIL A4+')
Proposed Long Term 2.00 CRISIL D (Downgraded from
Bank Loan Facility 'CRISIL BB-/Stable')
The downgrade of rating reflects its delays in debt servicing due
to weak liquidity.
The ratings reflect its below average financial risk profile.
This weakness is partially offset by its promoter's extensive
entrepreneurship experience in various industry.
Key Rating Drivers & Detailed Description
Weakness
* Below average financial risk profile: CIPL has reported a below
average financial risk profile as reflected in its modest
networth of around INR2.7 crores and high gearing of around 20
times as on fiscal 2017.
Strength
* Extensive entrepreneur experience: CIPL was established by Mr.
Shameer Dawood in 2013, prior he had extensive entrepreneurship
experience for more than 2 decades in various industries which
will benefit CIPL over the medium term.
CIPL, a Kerala-based company, produces and supplies cement, and
trades in ordinary Portland cement (OPC).
CHOOSY FASHIONS: CRISIL Maintains B Rating in Not Cooperating
---------------------------------------------------------------
CRISIL has been consistently following up with Choosy Fashions
(CF) for obtaining information through letters and emails dated
December 31, 2017 and June 29, 2018 among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 10 CRISIL B/Stable (ISSUER NOT
COOPERATING)
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 Choosy Fashions. This
restricts CRISIL's ability to take a forward looking view on the
credit quality of the entity. CRISIL believes that the
information available for Choosy Fashions is consistent with
'Scenario 1' outlined in '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 CF continues to be 'CRISIL B/Stable Issuer not
cooperating'
CF was established in 1985 as a proprietorship firm by Mr. Daljit
Singh Chadha. The Mumbai-based firm trades in men and ladies
garments. It also has a retail showroom in Goregaon (East) with
an area of 2000 square feet.
CITY MAX: CRISIL Maintains B- Rating in Not Cooperating Category
----------------------------------------------------------------
CRISIL has been consistently following up with City Max Hospital
and Research Centre (CMHR) for obtaining information through
letters and emails dated December 31, 2017 and June 29, 2018
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Term Loan 8 CRISIL B-/Stable (ISSUER NOT
COOPERATING)
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 CMHR. This restricts CRISIL's
ability to take a forward looking view on the credit quality of
the entity. CRISIL believes that the information available for
City Max Hospital and Research Centre is consistent with
'Scenario 1' outlined in '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 CMHR continues to be 'CRISIL B-/Stable Issuer not
cooperating'
Incorporated in 2011, CMHR is a multi-specialty hospital in
Tohana (Haryana). The construction of the hospital began in 2011;
it has been in operation since November 2012. With a capacity of
100 beds, CMHR is a multi-specialty hospital providing services
in several medical specialties including astroenterology,
neurology, fertility care, cardiology, and oncology.
DYNAMIC BUILDING: CRISIL Maintains B Rating in Not Cooperating
---------------------------------------------------------------
CRISIL has been consistently following up with Dynamic Building
Concepts Private Limited (DBCPL) for obtaining information
through letters and emails dated December 31, 2017 and June 29,
2018 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 1.5 CRISIL B/Stable (ISSUER NOT
COOPERATING)
Long Term Loan 8.5 CRISIL B/Stable (ISSUER NOT
COOPERATING)
Proposed Long Term 2.0 CRISIL B/Stable (ISSUER NOT
Bank Loan Facility COOPERATING)
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 Dynamic Building Concepts
Private Limited. This restricts CRISIL's ability to take a
forward looking view on the credit quality of the entity. CRISIL
believes that the information available for Dynamic Building
Concepts Private Limited 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 DBCPL continues to be 'CRISIL B/Stable Issuer not
cooperating'
DBCPL, incorporated in 2013, manufactures hollow and solid
concrete blocks. DBCPL is managed by Mr. Harpartap Singh Deol and
Mr. Amritpal Singh Sandhu. DBCPL's manufacturing unit is in
district Una (Himachal Pradesh).
EARTHEN TREASURES: CARE Migrates D Rating to Not Cooperating
------------------------------------------------------------
CARE Ratings has migrated the rating on bank facility of Earthen
Treasures Natural Resources Private Limited (ETPL) to Issuer Not
Cooperating category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 5.00 CARE D; Issuer Not Cooperating;
Facilities best available information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from ETPL to monitor the rating
vide e-mail communications/letters dated May 28, 2018, June 19,
2018 and June 26, 2018 and numerous phone calls. However, despite
CARE's repeated requests, the company has not provided the
requisite information for monitoring the ratings. In line with
the extant SEBI guidelines, CARE has reviewed the rating on the
basis of the publicly available information which however, in
CARE's opinion is not sufficient to arrive at a fair rating. The
rating on ETPL's bank facilities and will now be denoted as CARE
D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The rating takes into account the overdrawals in cash credit
facility.
Detailed description of the key rating drivers
At the time of last rating in April 24, 2017 following were the
rating strengths and weaknesses considered (updated for
information available from Ministry of Corporate Affairs):
Key Rating Weaknesses
Overdrawals in cash credit facility: The banker has confirmed
that there are continuous overdrawals in cash credit facility and
the account has been classified as NPA.
Pune-based, ETPL was established in April 2013. The company is
engaged in quarrying, production and trading of granite.
ETPL has leased the quarry measuring 2.13 acres from M/S Brothers
Granite Exporter and has acquired rights of selling, supplying,
and transporting of black granite blocks for a lease period of 7
years. The quarry of the entity is located in Chamrajnagar,
Karnataka. ETPL provides a varied range of quality granite
products to its clients that cater to the requirements of
constructions like buildings, hospitals, hotels and other housing
projects.
GAYATRI AGRO: CRISIL Maintains B Rating in Not Cooperating
----------------------------------------------------------
CRISIL has been consistently following up with Gayatri Agro Oil
and Food Products (GAOFP) for obtaining information through
letters and emails dated December 31, 2017 and June 29, 2018
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL B/Stable (ISSUER NOT
COOPERATING)
Proposed Long Term 1.72 CRISIL B/Stable (ISSUER NOT
Bank Loan Facility COOPERATING)
Term Loan 8.75 CRISIL B/Stable (ISSUER NOT
COOPERATING)
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 Gayatri Agro Oil and Food
Products. This restricts CRISIL's ability to take a forward
looking view on the credit quality of the entity. CRISIL believes
that the information available for Gayatri Agro Oil and Food
Products 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 GAOFP continues to be 'CRISIL B/Stable Issuer not
cooperating'
GAOFP is a partnership firm established in 2005. The firm
extracts and refines edible oil at its plant in Kesinga (Odisha).
The unit has an installed capacity of 200 tonnes per day (tpd)
for solvent and 50 tpd for refined oil. The refining unit has
been set up only recently and is expected to commence commercial
operations from October 2015. The firm manufactures rice bran oil
and sunflower oil. Mr. Amit Agarwal, Mr. Pawan Agarwal, and Mrs.
Sarita Agarwal are the partners. The operations are, however,
primarily managed by Mr. Amit Agarwal.
GEMINI ENTERPRISES: CRISIL Maintains B Rating in Not Cooperating
---------------------------------------------------------------
CRISIL has been consistently following up with Gemini
Enterprises-Hyderabad (GE) for obtaining information through
letters and emails dated December 31, 2017 and June 29, 2018
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 7 CRISIL B/Stable (ISSUER NOT
COOPERATING)
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 GE, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on GE 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 GE continues to be 'CRISIL B/Stable Issuer not
cooperating'
Established as a proprietorship firm in 1999 by Mr. V Ramesh, GE
is a primary distributor for HUL's products in Hyderabad.
GODHANI GEMS: CRISIL Maintains D Rating in Not Cooperating
----------------------------------------------------------
CRISIL has been consistently following up with Godhani Gems
Private Limited (GGPL) for obtaining information through letters
and emails dated December 31, 2017 and June 29, 2018 among
others, apart from telephonic communication. However, the issuer
has remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Export Packing 43.69 CRISIL D (ISSUER NOT
Credit COOPERATING)
Post Shipment 101.73 CRISIL D (ISSUER NOT
Credit COOPERATING)
Proposed Long Term 58.58 CRISIL D (ISSUER NOT
Bank Loan Facility COOPERATING)
Proposed Short Term 3.00 CRISIL D (ISSUER NOT
Bank Loan Facility COOPERATING)
Standby Line of 6.00 CRISIL D (ISSUER NOT
Credit COOPERATING)
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 Godhani Gems Private Limited.
This restricts CRISIL's ability to take a forward looking view on
the credit quality of the entity. CRISIL believes that the
information available for Godhani Gems Private Limited 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 ratings on bank
facilities of GGPL continues to be 'CRISIL D/CRISIL D Issuer not
cooperating'.
GGPL, set up in 1995 as a partnership firm by Mr. Ramesh V
Godhani, Mr. Vinod V Godhani, and their family members, was
reconstituted as a private limited company in 2011. The company
cuts and polishes diamonds.
GVR NUTRIES: CRISIL Maintains B Rating in Not Cooperating
---------------------------------------------------------
CRISIL has been consistently following up with GVR Nutries
Private Limited (GVR) for obtaining information through letters
and emails dated December 31, 2017 and June 29, 2018 among
others, apart from telephonic communication. However, the issuer
has remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 8 CRISIL B/Stable (ISSUER NOT
COOPERATING)
Term Loan 5 CRISIL B/Stable (ISSUER NOT
COOPERATING)
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 GVR, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on GVR 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 GVR continues to be 'CRISIL B Issuer not
cooperating'
Incorporated in 2012, GVR processes dal and pulses. The company
is based in Wardha (Maharashtra). It has a capacity for
processing 100 tonnes per day of dal. The company mainly
processes pigeon peas (tur dal) and sells to wholesalers and
institutional buyers.
HAVELI ENTERTAINMENTS: CRISIL Keeps B- Rating in Not Cooperating
----------------------------------------------------------------
CRISIL has been consistently following up with Haveli
Entertainments Pvt Ltd (HEPL) for obtaining information through
letters and emails dated December 31, 2017 and June 29, 2018
among others, apart from telephonic communication. However, the
issuer has remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Term Loan 9.75 CRISIL B-/Stable (ISSUER NOT
COOPERATING)
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 HEPL, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on HEPL is
consistent with 'Scenario 2' outlined in the 'Framework for
Assessing Consistency of Information with CRISIL BBB Rating
category or lower'.
Based on the last available information, the rating on bank
facilities of HEPL continues to be 'CRISIL B-/Stable Issuer not
cooperating'
Haveli Entertainment Pvt. Ltd (HEPL) has been incorporated as
closely held Private Limited Company since December 1995. The
main promoters of the company are Mr. Fatehsinh Chauhan and Mr.
Abhishek Chauhan. The company is setting up an entertainment mall
in Silvassa in Dadra & Nagar Haveli.
HEMNIL METAL: CRISIL Maintains D Rating in Not Cooperating
----------------------------------------------------------
CRISIL has been consistently following up with Hemnil Metal
Processors Private Limited (HMPPL) for obtaining information
through letters and emails dated December 31, 2017 and June 29,
2018 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 7 CRISIL D (ISSUER NOT COOPERATING)
Term Loan 9.62 CRISIL D (ISSUER NOT COOPERATING)
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 HMPPL, which restricts
CRISIL's ability to take a forward looking view on the entity's
credit quality. CRISIL believes information available on HMPPL 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 HMPPL continues to be 'CRISIL D Issuer not
cooperating'
Incorporated in 1996, HMPPL cuts coils or sheets in sizes as
specified by customers, mainly from the automobile industry.
Operations are managed by key promoter, Mr. Hemant Mehta.
HI-QUALITY FOODS: CRISIL Lowers Rating in INR15cr Term Loan to C
----------------------------------------------------------------
CRISIL has downgraded its rating on the long-term facility of
Hi-Quality Foods & Beverages Private Limited (HQFBPL) to 'CRISIL
C' from 'CRISIL B-/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Term Loan 15 CRISIL C (Downgraded from
'CRISIL B-/Stable')
The downgrade reflects stretched liquidity on account of
insufficient cash accrual against repayment obligation. This has
increased the dependence on promoter funding to support debt
servicing in a timely manner until revenue and profitability
increase.
The downgrade also factors in the modest scale-and initial stage
of operations, weak financial risk profile and stretched
liquidity. These weaknesses are partially offset by the
entrepreneurial experience of the promoter.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of business: Operations commenced in May 2017 and
modest revenues of Rs 7 crore were generated in fiscal 2018.
Revenues are expected to remain small due to early stage of
operations.
* Weak financial risk profile: Debt protection metrics are
average. Continued losses have eroded the networth and led to
higher dependence on bank borrowing, weakening the capital
structure.
* Stretched liquidity: Cash accrual expected to be generated over
the medium term is likely to remain insufficient to service
maturing debt. However, unsecured loans from the promoter is
likely to support liquidity. Thus, generation of cash accrual
will remain a rating sensitivity factor.
Strength
* Entrepreneurial experience of the promoter: Benefits from the
promoter's over two decades of experience in jewellery business
through group entity, Delhi Chain Company Pvt Ltd, and
established relations with large clientele, should support the
business.
Incorporated in 2015, Delhi-based HQFBPL, promoted by Mr Rajendra
Kumar Soni, produces cold drinks, juices, spices, milk, flavoured
milk, natural water, lassi and mineral water and sells them under
its own brand across the National Capital Region. Its
manufacturing units are at Bawana and GT Karnal Road in Delhi,
Una in Himachal Pradesh, and Sonipat in Haryana.
INCREDIBLE REALCON: CARE Lowers Rating on INR600cr Loan to B(SO)
----------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Incredible Realcon Private Limited (IRPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term 600 CARE B (SO); Negative Revised
Instruments from CARE BB+ (SO); Negative
(Non-Convertible
Debentures)
Detailed Rationale & Key Rating Drivers
The rating of the NCDs of IRPL is based on the credit enhancement
in the form of an unconditional and irrevocable corporate
guarantee for debt servicing provided by Ireo Private Limited
(IPL).
The revision in the rating of IRPL takes into account the delay
in interest payment for the NCD on the due date on account of
insufficient cash flow however, as per the interaction with
debenture trustee and the management neither the DSRA has been
utilized to recover the overdue interest nor there has been any
invocation of the corporate guarantee from IPL as yet.
Furthermore, the continued delay in the sale of development
rights and lower than envisaged sales in the projects of IPL has
led to deterioration in the cash flow position of the company.
The rating is further constrained by moderate financial risk
profile marked by elevated debt levels, IREO's geographical
concentration risk with all projects in Gurgaon region and
slowdown in the real estate industry. The rating also takes
cognizance of criminal case filed against the company in India
besides the arbitration under process in New York and Mauritius.
The rating however continues to derive strength from the
experienced promoters, their established track record in project
execution, large fully paid-up land bank available with the
company and moderate execution risk.
Going forward, the ability of the company to timely monetize its
land/development rights to improve liquidity and regularize debt
repayment, execute the projects within estimated cost and
timelines and achieve collections from sale of projects at
envisaged levels shall be the key rating sensitivities.
Outlook: Negative
The outlook is 'Negative' on the back of subdued industry
scenario specifically in Gurgaon (Haryana) region which has
increased the reliance of the company on monetization of
development rights for the servicing of scheduled debt payments.
The outlook may be revised to 'Stable' in case of a significant
pickup in collections from sale of inventory of the projects or
sale of development rights.
Detailed description of the key rating drivers of the Guarantor
(IPL)
Key rating Weaknesses
Delay in Debt Servicing by IRPL: The NCD of IRPL is backed by the
corporate guarantee from IPL and dependent on IPL's cash flows
for debt servicing as there are no business operations under
IRPL. The ongoing sluggishness in the real estate sector has
adversely affected the liquidity of many developers including
IPL. Inadequate operational cash flows in IPL led to delay in
debt servicing of interest on NCD raised by IRPL on June 29,
2018. However as per the debenture trustee and the management,
there is adequate balance in Debt Service Reserve Account (DSRA)
to cover the interest which has not been utilized by the lender
and the Corporate Guarantee extended by IPL has also not been
invoked for recovery of interest due.
Moderate financial risk profile: IPL has reported total operating
income of INR397.16 crore during FY17 as compared to INR1043.27
crore during FY16 and net loss of INR218.31 crore during FY17 as
compared to net loss of INR48.95 crore during FY16. Also, the
company has high debt obligations in the short term to near term,
which increases its dependence on the refinancing. Further, the
servicing of the NCDs of INR600 crore in IRPL, for which IPL has
provided the corporate guarantee will be done by IPL. Thus,
timely collection of funds from the sale of inventory of the
projects and proceeds from the sale of development rights remains
the key rating sensitivity.
Slow bookings with large amount of inventory available in
completed projects: Presently IPL is having 6 projects with total
saleable area of 66.20 lsf, of which it has sold around 79% of
the area as on Dec 31, 2017. Currently, the company is able to
sell only completed projects whereby the occupancy certificate
(OC) has been received (Grand Arch, Uptown and Skyon). However,
due to the slowdown in real estate market, the sales momentum in
the under-construction projects (Gurgaon Hills and Ascott Service
Apartment) has slowed down. Further, the sales in the plotted
project will pick-up only after receiving of the applicable
license.
Exposure to concentration and market risk: High concentration of
IPL's ongoing projects to premium segment as well as to a single
micro market Golf Course Extension Road, Gurgaon, accentuates its
exposure to marketing risk given the slowdown in real estate
demand.
Subdued industry scenario: The real estate sector is moving
towards a more rational regime where developers, having learnt
from their mistakes, now focus on project execution and delivery.
The real estate market in Delhi-NCR has seen slow-down in the
sales in past few quarters. Competitive pricing, increased
transparency, speedy approvals process, clear land titles,
improved delivery and project execution are expected to support
growth of the real estate sector. While the sector continues to
remain troubled with issues of high unsold inventory, delayed
delivery of projects and financial stress on developers, the only
segment that showed some signs of a rebound was the affordable
housing category in the peripheries of the major markets. The
broader market opinion is that while the long term story for
residential market remains strong; the short term is expected to
be sluggish.
Arbitration Proceedings
A criminal case has been filed in India besides arbitration
proceedings in New York and Mauritius with respect of siphoning
of funds by Ireo's top management. The matter is currently
subjudice and the company has denied any wrong doing in this
regard in their reply to the Economic Offences Wing. Any adverse
outcome of the same will further weaken the credit profile of the
company.
Key rating strengths
Experienced promoters: IPL is part of the IREO Group a private
equity fund with assets of USD 1.7 billion invested in India. IPL
is managed by professionals with experience in the real estate
industry. The overall operations of the company are managed by
team of professionals which includes Mr. Anupam Nagalia (Chief
Operating Officer), who is a qualified Chartered Accountant and
Company Secretary. Before joining IGRPL, he has worked with
Vatika Group. Mr. Jai Bharat Aggarwal (Director Finance) is
responsible for making financial decisions for the company. IREO
group has established its track-record of delivery with
completion of two group housing projects in group company Ireo
Private Limited having more than 27.59 lakh square feet (lsf) of
saleable area in Gurgaon region. Furthermore, IREO Group has also
handed over 22 villas, 17 floors and 205 plots in township
project at Ludhiana developed under group company Ireo Waterfront
Private Limited and handed over 200 plots in Mohali developed
under group company Puma Realtors Private Limited.
Fully paid up land bank however high concentration in Gurgaon
area: IPL is having fully paid up unutilized land bank of 448
acres in Gurgaon. Also major part of the land bank is licensed,
which increases the marketability of these land parcels.
As with slowdown in the real estate industry, IPL has entered
into JV/Joint development agreement (JDA) with others real estate
developers to develop new projects on its land bank. Under the
terms of these JV/JDA, IPL has realized INR865 crore till Dec 31,
2017 with pending INR55 crore to be received on achievement of
certain milestones. However, considering that major part of the
land bank is in Gurgaon, it exposes the company to concentration
risk.
Moderation in execution risk: Out of a total of 6 ongoing
projects, IPL has already completed three projects -- Grand Arch,
Uptown and Skyon. Further, the development work for its plotted
project has been completed. Thus, IPL has to primarily complete 2
projects - Gurgaon Hills and Ascott Service Apartment which are
at intermediate stages of development, thus moderating the
exposure to execution risk.
Analytical Approach: The rating of the NCDs of Incredible Realcon
Private Limited (IRPL) is based on the credit enhancement in the
form of an unconditional and irrevocable corporate guarantee for
debt servicing provided by Ireo Private Limited (IPL).
Incredible Realcon Private Limited (IRPL) incorporated in 2013 is
part of Ireo Group (IREO) and is a SPV being promoted for
business of promotion, development and construction of real
estate. However presently there is no ongoing project in IRPL.
INDORE TREASURE: Ind-Ra Withdraws 'BB+' Long Term Issuer Rating
---------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Indore Treasure
Island Private Limited's Long-Term Issuer Rating of 'IND BB+
(ISSUER NOT COOPERATING)'.
The instrument-wise rating action is:
-- The IND BB+ rating on the INR1.279 bil. Term loan is
withdrawn.
KEY RATING DRIVERS
Ind-Ra is no longer required to maintain the ratings, as the
agency has received no objection certificates from the lenders.
This is consistent with the Securities and Exchange Board of
India's circular dated March 31, 2017 for credit rating agencies.
COMPANY PROFILE
Indore Treasure Island runs a mall in Indore.
J.N. TAYAL: CARE Lowers Rating on INR6.29cr LT Loan to B+
---------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
J.N. Tayal Steels Private Limited (JTPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 6.29 CARE B+; Issuer not cooperating,
Facilities Revised from CARE BB-, Issuer not
cooperating, Based on best
available information
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from JTPL to monitor the
rating(s) vide e-mail communications/letters dated June 4, 2018
and numerous phone calls. However, despite CARE's repeated
requests, the company has not provided the requisite information
for monitoring the ratings. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the
publicly available information which however, in CARE's opinion
is not sufficient to arrive at a fair rating. CARE's rating on
J.N. Tayal Steels Private Limited's bank facilities will now be
denoted as CARE B+; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings take into account small scale of operations, low
profitability margins, volatility in raw material prices,
company's presence in a highly fragmented and competitive
industry, experienced promoters with long track record of
operations, moderate capital structure, debt coverage indicators
and operating cycle.
Detailed description of the key rating drivers
The revision in the rating takes into consideration the following
weaknesses (Updated for the information available from Ministry
of Corporate Affairs):
Key rating Weaknesses
Small scale of operations: The scale of operations remained small
marked by total operating income (TOI) of INR54.67 crore in FY17
(refers to the period April 1 to March 31).
Low profitability margins: The profitability margins of the
company stood low marked by PBILDT margin of 1.82% and PAT margin
of 0.54% in FY17.
Susceptible to volatility in raw material prices: The main raw
materials of JNT are scrap steel. Raw material costs have always
been a major contributor to total operating cost in the past
three years, thereby making profitability sensitive to raw
material prices mainly due to the reason that the major raw
material is commodity in nature and witness frequent price
fluctuations. The prices of steel are driven by the international
prices which had been volatile in past. Thus any adverse change
in the prices of the raw material may affect the profitability
margins of the company.
Presence in a highly fragmented and competitive industry: Steel
being the sole raw material of JTPL can affect its performance.
The spectrum of the steel industry in which JTPL operates is
highly fragmented and competitive marked by the presence of
numerous players in India. Hence, the players in the industry do
not have any pricing power and are exposed to competition induced
pressures on profitability.
Key Rating Strengths
Experienced promoters: JTPL is currently being managed by Mrs
Geeta Tayal, Mr Jatin Tayal, Mr Nitin Tayal and Mr M. L Tayal. Mr
M. L Tayal and Mrs Geeta Tayal have an experience of around two
and half decades and more than one and half decade, respectively,
through their association with JTPL and entities engaged in the
similar business. Mr Jatin Tayal and Mr Nitin Tayal have gained
experience of 5 years each through their association with JTPL.
Moderate operating cycle: The average operating cycle of the
company stood moderate at 39 days for FY17 as compared to 42 days
for FY16.
Moderate capital structure and debt coverage indicators: The
overall gearing ratio of the company remained at a moderate level
of 0.56x as on March 31, 2017. The debt coverage indicators stood
moderate marked by total debt to GCA ratio of 5.71x for FY17 and
interest coverage ratio of 2.33x in FY17.
Incorporated in 2008, JTPL is a private limited company with its
registered office in Guwahati, Assam. The company is engaged in
the manufacturing and selling of steel ingots at its
manufacturing facility located in Guwahati, with an installed
capacity of manufacturing 16,000 MTPA (metric tonnes per annum)
of steel ingots, as on March 31, 2015 (Prov.). The shareholders
in JTPL include B.K Bansal Services Private Ltd, Rongri Tea
Estate Private Limited, Sagar India Ltd and ESS ESS Pharma
Private Limited, which are Assam-based companies engaged in the
business of horticulture, pharmaceutical and consultancy. Other
promoters in company include Mrs Geeta Tayal, Mr Jatin Tayal, Mr
Nitin Tayal, Mr M.L Tayal, among others.
J. M. FEED: CRISIL Maintains D Rating in Not Cooperating Category
-----------------------------------------------------------------
CRISIL has been consistently following up with J. M. Feed Mills
Private Limited (JMF) for obtaining information through letters
and emails dated December 31, 2017 and June 29, 2018 among
others, apart from telephonic communication. However, the issuer
has remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 9.8 CRISIL D (ISSUER NOT COOPERATING)
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 JMF, which restricts CRISIL's
ability to take a forward looking view on the entity's credit
quality. CRISIL believes information available on JMF 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 JMF continues to be 'CRISIL D Issuer not
cooperating'.
JMF, incorporated in 2010, manufactures concentrated poultry feed
and cattle feed. The manufacturing facility is at Jind (Haryana).
The company is promoted by Mr Baljit Singh and family.
JADWET RESORTS: CRISIL Migrates B Rating from Not Cooperating
-------------------------------------------------------------
Due to inadequate information, CRISIL, in line with Securities
and Exchange Board of India guidelines, had migrated the rating
on the bank facilities of Jadwet Resorts and Leisure Private
Limited (JRLPL) to 'CRISIL B/Stable Issuer Not Cooperating'
through its rationale dated June 28, 2018. However, the
management has subsequently started sharing the requisite
information for carrying out a comprehensive review of the
rating. Consequently, CRISIL is migrating the rating from 'CRISIL
B/Stable Issuer Not Cooperating' to 'CRISIL B/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 10 CRISIL B/Stable (Migrated from
'CRISIL B/Stable ISSUER NOT
COOPERATING')
The rating continues to reflect JRLPL's susceptibility to risks
related to timely completion and stabilization of its ongoing
hotel project. This rating weakness is partially offset by the
extensive experience of JRLPL's promoters in the hospitality
industry and their funding support to the company.
Key Rating Drivers & Detailed Description
Weakness
* Susceptibility to risk related to timely completion and
stabilization of its ongoing hotel project: The company is in the
final stages of completion of the project; commencement of
operations as anticipated and successful stabilization of
operations post that would be a key rating sensitivity factor.
Also post implementation, JRLPL's project will be exposed to
competition from other established hotels in Havelock Island,
which will constrain the company's business risk profile over the
near to medium term.
Strength
* Extensive experience of promoters in the hospitality industry:
JRLPL is promoted by Mr. Mohamed Jadwet and Mr. Zakir Jadwet
(second-generation promoters of the Jadwet family). The Jadwet
family has been involved in various business activities in
Andaman and Nicobar Islands since the 1940s, and enjoys a good
reputation in the region. JRLPL will continue to benefit over the
medium term from its promoters' extensive experience in the
hospitality industry and the funding support extended from
promoters.
Outlook: Stable
CRISIL believes that JRLPL will benefit over the medium term from
its promoters' extensive industry experience and their fund
support. The outlook may be revised to 'Positive' if the company
completes its ongoing project on a timely basis and achieves
earlier than expected stabilization of operations. Conversely,
the outlook may be revised to 'Negative' in case of delays in
completion and stabilization of operations, leading to
deterioration of the company's financial risk profile.
Incorporated in fiscal 2014, JRLPL is based in Port Blair (Union
Territory of Andaman & Nicobar Islands) and is promoted by Mr.
Mohamed Jadwet and Mr. Zakir Jadwet.
The company is undertaking a project for setting up a high-end
spa resort on 9200 square metres on Vijay Nagar Beach in Havelock
(Andaman and Nicobar Islands). The project plan includes a 30-
room resort, one all-year restaurant, bar and lounge, indoor
meeting/conference space, and spa and scuba centre. The project
outlay is around INR20 crore. The operations are expected to
start from September 2018.
JANAA INDUSTRIES: CRISIL Reaffirms B+ Rating on INR3.6cr Loan
-------------------------------------------------------------
CRISIL's ratings on the bank facilities of Janaa Industries (JI)
continue to reflect the firm's small scale of operations in the
highly fragmented cotton yarn industry, and its moderate
financial risk profile marked by small networth limiting
financial flexibility. These weaknesses are partially offset by
extensive industry experience of its partners.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 0.2 CRISIL A4 (Reaffirmed)
Cash Credit 3.6 CRISIL B+/Stable (Reaffirmed)
Long Term Loan 1.12 CRISIL B+/Stable (Reaffirmed)
Proposed Long Term
Bank Loan Facility .78 CRISIL B+/Stable (Reaffirmed)
Key Rating Drivers & Detailed Description
Weakness:
* Small scale of operations in highly fragmented cotton yarn
industry: JI's business risk profile is marked by its small scale
of operations in the highly fragmented cotton yarn industry;
despite being in the industry for more than a decade, JI's scale
of operations is small as indicated by its estimated revenue of
about INR18.1 crore during fiscal 2018.
* Small networth limiting financial flexibility: The firm's net
worth is estimated to remain low at around INR3.45 crore as on
March 31, 2018. The net worth has remained low due to low initial
partners' capital and limited accretion to reserves; the latter
is a result of small scale of operations and modest profitability
margins.
Strengths
* Partner's extensive industry experience: JI benefits from the
industry experience of its partners who have been part of a
family that has been in the textile industry for more than five
decades. The extensive experience of the promoter, his
understanding of the dynamics of the local market, and
established relationship with suppliers and customers have
resulted in stable growth of JI despite downturn in the industry.
Outlook: Stable
CRISIL believes JI will continue to benefit over the medium term
from the extensive industry experience of its partners. The
outlook may be revised to 'Positive' if revenue and profitability
increase significantly, while improving its capital structure.
Conversely, the outlook may be revised to 'Negative' if
considerable decline in yarn realisations leads to fall in
accrual, or if working capital management weakens, resulting in
stretched liquidity.
Set up in 1996 and promoted by Mr. Janagaraj, Rajapalayam (Tamil
Nadu)-based JI manufactures cotton yarn.
JAYPEE INFRATECH: High Court Reserves Verdict in Homebuyer Case
---------------------------------------------------------------
Livemint reports that a Supreme Court bench headed by Chief
Justice Dipak Misra on July 19 reserved its verdict on the course
of action in the Jaypee Infratech Ltd (JIL) homebuyers
litigation, after the corporate insolvency resolution period for
JIL expired in May this year.
Livemint says the order was reserved by the bench after hearing
all stakeholders, including the parent company, Jaiprakash
Associates Limited (JAL), the resolution professional for JIL,
homebuyers and the lender banks.
While Insolvency and Bankruptcy Board of India has suggested re-
constitution of a committee of creditors which would include the
homebuyers, the insolvency resolution professional suggested the
constitution of an independent committee under a retired Supreme
Court judge to assess the financial capability of JIL, JAL or any
other company that was interested in completing the housing
projects, according to the report.
Livemint relates that JAL argued that its master restructuring
Agreement (MRA), which is pending before the National Company Law
Tribunal (NCLT) for its approval, should be allowed to come into
effect so that it could revive its subsidiary and honor debts
owed to the homebuyers.
JAL claims that the MRA has been approved by more than 30 lender
banks, the report adds.
Jaypee Infratech Limited (JIL) is engaged in the real estate
development. The Company's business segments include Yamuna
Expressway Project and Healthcare. The Company's Yamuna
Expressway Project is an integrated project, which inter alia
includes construction of 165 kilometers long six lane access
controlled expressway from Noida to Agra with provision for
expansion to eight lane with service roads and associated
structures on build, own, operate and transfer basis. The Company
provides operation and maintenance of Yamuna Expressway for over
36 years, collection of toll and the rights for development of
approximately 25 million square meters of land for residential,
commercial, institutional, amusement and industrial purposes at
over five land parcels along the expressway. The Healthcare
business segment includes hospitals. The Company has commenced
development of its Land Parcel-1 at Noida, Land Parcel-3 at
Mirzapur and Land Parcel-5 at Agra.
As reported in the Troubled Company Reporter-Asia Pacific on
Aug. 15, 2017, Moneycontrol said the Allahabad bench of the
National Company Law Tribunal (NCLT) on Aug. 9 accepted lender
IDBI Bank's plea and classified JIL as an insolvent company.
With this, the board of directors of the company remains
suspended.
The NCLT had appointed Anuj Jain as Interim Resolution
Professional (IRP) to manage the company's business. The IRP had
invited bids from investors interested in acquiring JIL and
completing the stuck real estate projects in Noida and Greater
Noida.
On Sept. 4, 2017, the apex court stayed the insolvency
proceedings initiated against JIL, after various associations of
homebuyers moved a batch of petitions fearing they will lose
their apartments and not get any compensation, according to
Livemint. The stay was later revoked by the court, which
directed the resolution professional to submit an interim
resolution plan that takes into account the interest of
homebuyers.
The court also directed the parent company, JAL, to deposit
INR2,000 crore to protect the interest of homebuyers. Out of
this, only INR750 crore has been deposited so far, Livemint says.
JIL features in the Reserve Bank of India's first list of non-
performing assets accounts and had debt exposure of over INR9,783
crore as of September 2017. The parent company, JAL owes more
than INR29,000 crore to various banks, Livemint discloses.
K.P. CHACKO: CARE Reaffirms B+ Rating on INR17cr LT Loan
--------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
K.P. Chacko and Sons (KPCS), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 17.00 CARE B+; Stable Reaffirmed
Detailed Rationale
The rating assigned to the bank facilities of KPCS continue to
remain tempered by modest scale of operations, leveraged capital
structure and weak debt coverage indicators, thin profitability
margins due to volatility associated with gold prices and
presence in highly fragmented industry leading to intensive
competition, working capital intensive nature of business due to
elongated operating cycle and constitution of the entity as
partnership firm with inheritance risk of withdrawal of capital.
The ratings also factor in increase in total operating income in
FY18 [(prov.)
refers to April 1 to March 31].
The ratings, however, continue to derive strength from vast
experience of the promoter with long track record of the firm,
established relations with reputed customers and suppliers and
stable demand outlook of jewellery business with scope of growth
for certified and branded jewellery. Going forward, the firm's
ability to increase its scale of operations, improve the
profitability margins, capital structure and to manage working
capital cycle efficiently are key sensitivities.
Detailed Rationale & Key Rating Drivers
Key rating weakness
Modest scale of operations: Despite long track record of the
firm, the scale of operations marked moderately with total
operating income (TOI) of the firm declined from INR 60.84 crore
during FY16 to INR 56.26 crore during FY17 due to lower cash
sales of the firm post October, 2016 due to demonetization
effect. However, TOI has increased and stood at INR 59.86 crore
in FY18 (prov.) due
to increase in demand of jewellery resulting in improved
footfalls of retail customers.
Leveraged capital structure and weak debt coverage indicators:
The capital structure of the firm marked by overall gearing ratio
improved remained leveraged at 2.25x as on March 31, 2018 (Prov.)
as compared to 2.32x as on March 31, 2017 due to relatively lower
outstanding balance of working capital borrowings as on account
closing date. Furthermore, the debt coverage indicators of the
firm have been weak due to thin profitability, low cash accruals
and high debt levels. Total debt to GCA of the firm improved and
stood weak at 48.00x in FY18 (prov.) as compared to 63.34x in
FY17 at the back of increase in gross cash accruals. Furthermore,
PBILDT/Interest coverage ratio of the firm remained low at 1.28x
in FY18 (prov.).
Elongated working capital cycle with working capital intensive
nature of business: The operating cycle of the firm deteriorated
from 82 days in FY17 to 152 days in FY18 (Prov.) due to increased
inventory levels on the closing date on March 31, 2018. The
increase in inventory period was due to the fact that the firm is
required to keep minimum display stock level of 3-4 months to
cater to the ready display of ornament jewellery for the walk-in
customers of the firm.
Thin profitability margins due to volatility associated with gold
prices: The firm is engaged in retailing of gold ornament
jewellery, silver ornaments and sale of diamonds. Prices of gold
and silver are highly volatile affected by international market
and domestic demand forces. Such high volatile products of the
firm resulted in fluctuating and thin profitability margins
during the review period. KPCS has thin PBILDT margin during
FY16-FY18 (prov.) in the range of around 4-4.5% due to volatile
bullion prices along with presence in highly fragmented industry
leading to intensive competition. The PAT margin also stood low
in the range of 0.20-0.55% during FY16-FY18 due to higher amount
of interest costs of the firm.
Presence in highly fragmented industry leading to intensive
competition: The firm operates in the Jewellery industry which is
a fragmented industry with a high level of competition from both
the organized and largely unorganized sector. Moreover, the
global and domestic macroeconomic environment continues to remain
uncertain and poses a major challenge for the companies operating
in Jewellery industry.
Constitution of the entity as partnership firm with inherent risk
of withdrawal of capital: Constitution as a partnership has the
inherent risk of possibility of withdrawal of the capital at the
time of personal contingency which can adversely affect its
capital structure. Furthermore, partnership firms have restricted
access to external borrowings as credit worthiness of the
partners would be key factors affecting credit decision for the
lenders.
Key Rating Strengths
Vast experience of the promoters with long track record of the
firm: Mr. Jerald Jacob who is the Managing Partner of the firm
has more than three decades of experience in retailing of
jewellery. He belongs to the K.P Chacko family who are engaged in
jewellery business for over 35 years and considered to be one of
the established players in the jewellery business of Kerala. He
handles the overall operations of the firm and is ably supported
by his wife Mrs. Rajee Jerald. The firm was established in the
year 1992 and since then is engaged in retailing of ornament
jewellery. The firm is likely to be benefitted from the
experienced promoters and long track record of the firm.
Established relations with reputed customers and suppliers: The
firm being into the same business from past three decades the
promoters has been associated with their suppliers from past 20
to 30 years. The firm has established relations with reputed
suppliers like Peeyar Jewellers, Gold Tree Bullion India Private
Limited, M J Gold, S J S Gold Private Limited, Southern Gold
Private Limited, etc. and despite of the sales being done to
walk-in and retail customers, the firm has several regular
customers who include individuals and families.
Stable outlook of gold business with scope of growth for
certified and branded jewellery: In the past few years, the
dynamics of consumption of gold and other jewellery has been
changing. The preference for good quality, branded, certification
and fashionable jewellery have been rising. KPCS being BIS hall
Mark certificated has good opportunity to grow due to the
changing dynamics.
K.P. Chacko & Sons (KPCS) based at Kerala was established in the
year 1992 as a partnership firm by Mr. Jerald Jacob and his wife
Mrs. Rajee Jerald. The firm is mainly engaged in retailing of
jewelry, ethnic gold and stone studded ornaments along with
silver jewellery and gift articles. KPCS has its retail showroom
located at Thodupuzha, Kerala in around 2000 sq. ft. area. Around
95% of the total revenues of the firm are generated from sale of
gold and gold ornaments while balance of the sales is being done
from sale of silver and silver articles.
KANAK GINNING: CARE Assigns B Rating to INR6.77cr LT Loan
---------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Kanak
Ginning (KG), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 6.77 CARE B; Stable Assigned
Detailed Rationale & Key rating drivers
The rating assigned to the bank facilities of KG is tempered on
account of its short track record of operations, small scale with
low profitability margin, and weak solvency position. The rating
is further constrained by working capital intensive nature of
operation, risk associated with seasonality and fragmented nature
of industry, and proprietorship nature of constitution. The
ratings, however, derive strength from the satisfactory
experience of proprietor, location advantage emanating from
proximity to raw material, and integration into cotton seed oil
resulting in zero discharge plant.
The ability of the entity to further increase its scale of
operations, improve its profitability margins and solvency
position with efficient management of working capital
requirements are the key rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weakness
Short track record of operations: FY17 was first full year of
operation. Hence, the track record of the firm is short which
exposes it to stabilization risk.
Small scale of operations with low profitability margin: The
scale of operations of the firm is small with total operating
income of INR30.70 crore in FY17 along with capital employed of
INR6.13 crore as on March 31, 2017. This limits the financial
flexibility of the firm. Further the operating margin of the firm
was low owing to limited value addition nature of the business.
Moreover, the firm registered a net loss in FY17.
Weak solvency position: The tangible net worth of the firm is
negative owing to the losses registered in FY17. This
resulted in weak solvency position for the firm.
Working capital intensive nature of operation: The operations of
the firm are working capital intensive in nature with gross
current asset days of 66 days during FY17. The working capital
requirements are met by the cash credit facility availed by the
entity utilization of which remained high.
Risk associated with seasonality and fragmented nature of
industry: The cotton business is highly seasonal in nature, as
the sowing season is from March to July and the harvesting season
is spread from November to February. Furthermore, the cotton
industry is highly fragmented with large number of players
operating in the unorganized sector translate in inherent thin
profitability margins.
Proprietorship nature of constitution: KG, being a proprietorship
concern, is closely held and is subject to limited disclosure
norms, it is exposed to the risk of withdrawal of capital as well
as long-term existence of business operations under the entity.
Key Rating Strengths
Experienced Proprietor: The proprietor has an average experience
of more than one decade in agro industry. Being in the industry
for more than one decade has helped the proprietor to gain
adequate acumen about the business which aids in the smooth
operations of KG.
Locational advantage emanating from proximity to raw material:
The manufacturing facility of KG is at Maharashtra which is the
2nd largest producer of cotton in India. This ensures easy raw
material access and smooth supply of raw materials at competitive
prices and lower logistic expenditure for KG.
Integration into cotton seed oil resulting in zero discharge
plant: Apart from ginning and pressing of cotton, KG is also
engaged in cotton seed oil extraction with an installed capacity
to crush 9200 metric tons of cotton seeds per annum. Hence, KG
can be categorized as zero discharge plant as there is no residue
or scrap left after the manufacturing process.
KG based out of Nagpur, Maharashtra is a proprietorship firm
established in January 2016. The entity is engaged in ginning and
pressing of cotton and extraction of oil from cotton seed. The
ginning and pressing unit and oil extraction unit is located at
Nagpur, Maharashtra with an installed capacity to gin and press
17900 bales per annum and to crush 9200 metric tons of cotton
seeds per annum and to produce 65000 litters oil per annum.
KDM CLOTHING: Ind-Ra Affirms BB- LT Issuer Rating, Outlook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed KDM Clothing
Co.'s (KCC) Long-Term Issuer Rating at 'IND BB-'. The Outlook is
Stable.
The instrument-wise rating actions are:
-- INR35 mil. Fund-based working capital limit affirmed with
IND BB-/Stable/IND A4+ rating; and
-- INR9.25 mil. Term loan due on May 2021 affirmed with IND BB-/
Stable rating.
KEY RATING DRIVERS
The ratings are constrained by KCC's small scale of operations
and modest interest coverage. The company is present in a highly
fragmented and intensely competitive textile industry. FY18
financials are provisional.
Revenue improved to INR177 million in FY18 (FY17: INR117.84
million), driven by an increase in demand. Gross interest
coverage declined to 2.06x in FY18 (FY17: 2.20x; FY16: 2.03x),
because of an increase in the interest cost.
The ratings factor in the partnership nature of KCC's business.
The ratings, however, are supported by the company's healthy
EBITDA margins of 6.5% in FY18 (FY17: 8.1%) with return on
capital employed at 18% (10%). The margin decline in FY18 was due
to an increase in manufacturing and raw material cost.
The ratings are also supported by KCC's comfortable net leverage
(adjusted net debt/operating EBITDAR) of 0.68x in FY18 (FY17:
0.76x; FY16: 1.07x) due to low debt levels. The leverage ratio
improved in FY18 due to an increase in the EBITDA.
The ratings factor in the company's comfortable liquidity
position and short net working capital cycle (FY18: 3 days; FY17:
negative 8 days). Its average peak utilization of the fund-based
limits for the 12 months ended June 2018 was 10%.
Moreover, KCC's promoters have an experience of more than 20
years in the textile industry.
RATING SENSITIVITIES
Negative: Any decline in the revenues and/or decline in EBITDA
margins leading to any deterioration in the credit metrics will
be negative for the ratings.
Positive: Substantial revenue growth along with EBITDA margins
being sustained or improving leading to an improvement in the
credit metrics, all on a sustained basis, will be positive for
the ratings.
COMPANY PROFILE
Established in 2007, KCC manufactures hosiery goods and sweaters
and sells them both in India and overseas.
KUNA IMPEX: Ind-Ra Hikes Long Term Issuer Rating to 'BB'
--------------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded Kuna Impex
Private Limited's (KIPL) Long-Term Issuer Rating to 'IND BB' from
'IND BB- (ISSUER NOT COOPERATING)'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR67.50 mil. (increased from INR57.5 mil.) Fund-based
working capital limits upgraded with IND BB/Stable rating;
-- INR3.48 mil. (reduced from INR6.18 mil.) Long-term loans due
on April 30, 2020 upgraded with IND BB/Stable rating; and
-- INR45 mil. (reduced from INR55 mil.) Non-fund based working
capital limits affirmed with IND A4+ rating.
KEY RATING DRIVERS
The upgrade reflects a rise in revenue and an improvement in the
credit metrics of KIPL in FY18. Revenue raised to INR247 million
in FY18 from INR243 million in FY17, driven by an increase in
sales volume due to a rise in demand for manufactured goods. The
scale of operations continued to be small. FY18 financials are
provisional.
Moreover, its interest coverage (EBITDA/gross interest expenses)
improved to 2.1x in FY18 from 1.4x in FY17 and net leverage (net
debt/EBITDA) enhanced to 2.1x from 4.5x. The improvement in the
credit metrics was primarily driven by a rise in absolute EBITDA
and a decline in interest expenses. The credit metrics are
comfortable.
The ratings are supported by KIPL's average return on capital
employed (FY18: 14.0%; FY17: 13.0%) and EBITDA margin (9.1%;
6.8%) levels. The rise in the margin was owing to a decline in
the goods and services tax.
The ratings continue to benefit from the promoters' nearly three
decades of experience in industrial automation products and the
company's exclusive distributorship arrangement with Shenzhen
Simphoenix Electric Technology Co., Ltd, Estun Automation and
Chint Electric for selling their products in India.
The ratings, however, continue to be constrained by KIPL's modest
liquidity, indicated by an average maximum utilization of the
fund-based working capital limits of 95.59% for the 12 months
ended June 2018.
The ratings reflect a foreign exchange risk, as KIPL sources the
majority of its machinery and electronic parts from overseas.
RATING SENSITIVITIES
Negative: Any deterioration in the liquidity position could be
negative for the ratings.
Positive: A positive rating action may result from a substantial
rise in revenue, along with an improvement in the credit metrics.
COMPANY PROFILE
KIPL is a trader of industrial automation and electrical and
lighting products. KIPL is an exclusive distributor of Shenzhen
Simphoenix Electric Technology's AC drives, Estun Automation's
servo drives and Chint Electric's low-voltage switchgears in
India.
The company is managed by Mr. Ved Naithani and Mr. Palak Shah.
The company's head office is in Ahmedabad, Gujarat.
LIBRA AUTOCAR: CARE Lowers Rating on INR10cr LT Loan to C
---------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Libra Autocar Company Limited (LACL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank 10.00 CARE C; Issuer not cooperating,
Facilities Revised from CARE B+
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from LACL to monitor the
rating(s) vide e-mail communications/letters dated June 4, 2018
and numerous phone calls. However, despite CARE's repeated
requests, the company has not provided the requisite information
for monitoring the ratings. In the absence of minimum information
required for the purpose of rating, CARE is unable to express
opinion on the rating. In line with the extant SEBI guidelines,
CARE's rating on Libra Autocar Company Limited's bank facilities
will now be denoted as CARE C; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The rating has been revised on account of Intense competition in
the auto dealership industry.
Detailed description of the key rating drivers
The revision in the rating takes into consideration the following
weaknesses.
Key rating Weaknesses
Intense competition in the auto dealership industry: Indian
automobile industry is highly competitive in nature as there are
a large number of players operating in the passenger car market
like Maruti Suzuki, Hyundai, Honda, Tata Motors, etc. OEMs are
encouraging more dealerships to improve penetration and sales,
thereby increasing competition amongst dealers. Due to very high
competition in the industry, dealers are also forced to pass on
discounts and exchange schemes to attract customers which
restrict their margins.
LACL was incorporated in 2005 and promoted by Mr Pavit Pal Singh,
Mr Kesar Singh and Mr Gurinderjit Singh. LACL is an authorized
dealer of entire range of passenger vehicles (PV) of Maruti
Suzuki India Limited (MSIL). LACL operates a 3S facility (Sales,
Spares, Service) coupled with sale and purchase of pre-owned cars
(True Value) and has its showroom located on Jalandhar Bypass,
Ludhiana, Punjab. The company also has one service station in
Sanewal, Ludhiana, Punjab.
LACL has three group concerns, namely, 'Libra Auto &General
Finance Limited', 'Libra Automobiles Private Limited' and
"Patiala Carrier". 'Libra Auto & General Finance Limited' is
engaged in auto and general finance business since 1994,
whereas both the other group concerns are engaged in transport
business since 1994.
MAHA ELECTRONICS: CRISIL Lowers Rating on INR15cr Cash Loan to D
----------------------------------------------------------------
CRISIL has downgraded its rating on the long term bank loan
facilities of Maha Electronics Private Limited (MEPL) to 'CRISIL
D' from 'CRISIL B-/Stable'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 15 CRISIL D (Downgraded from
'CRISIL B-/Stable')
The downgrade reflects overdrawls in CC account for more than 60
days owing to weak liquidity.
The rating continues to reflect MEPL's weak financial risk
profile marked by small net worth, high gearing and weak debt
protection metrics, working-capital-intensive nature of
operations, and its exposure to intense competition in the IT
hardware and telecommunication industry. The rating weaknesses
are partially offset by promoters' extensive experience and its
established relationship with its customers.
Key Rating Drivers & Detailed Description
Weaknesses
* Delay in debt servicing: There are overdrawls in CC account for
more than 60 days owing to weak liquidity.
* Working-capital-intensive nature of operations: MEPL's
operations are working capital intensive, as reflected in its
high GCAs 901 days on account of high inventory days of around
494 days, debtor days of 463 days and creditor days of around 361
days.
* Exposure to intense competition in the IT hardware and
telecommunication industry: MEPL's operation are exposed to
intense competition in the IT hardware and telecommunication
industry which limits bargaining power.
* Weak financial risk profile: The financial risk profile is weak
marked by small net worth of INR2.12 Crores, high gearing of
around 9.6 times and weak debt protection metrics marked by
Interest coverage ratio of around 1.19 times and NCATD at 0.02
times, for fiscal 2017.
Strengths
* Promoters' extensive experience and its established
relationship with its customers: The promoter of MEPL, Mr.
Venkateswarulu, has been in the business for over 19 years has
enabled the promoters to establish strong relationship with
customers and suppliers.
MEPL was set up as a partnership firm, Maha Electronics Service,
in 1994 by Mr. S Venkateswarulu and his wife Mrs. S Punyavathy;
the firm was reconstituted as a private limited company and it
got its current name in 2002. MEPL is an authorized service
partner for HP and has also started erection and installation of
towers. The company is based out of Hyderabad, Telangana.
MAXIMA TRADERS: CARE Lowers Rating on INR42.50cr LT/ST Loan to D
----------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Maxima Traders Bhopal Private Limited (Million), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 23.00 CARE D; Issuer not cooperating;
Facilities Revised from CARE BBB-; Stable;
based on best available
information
Long-term/Short 42.50 CARE D/CARE D; Issuer not
Term Bank cooperating; Revised from
Facilities CARE BBB-; Stable/CARE A3;
based on best available
information
Detailed Rationale, Key Rating Drivers and Detailed description
of the key rating drivers
CARE has been seeking information from Million to monitor the
ratings vide email communications dated June 22, 2018, June 25,
2018, June 26, 2018, June 28 ,2018, June 29, 2018, July 2, 2018
and July 3, 2018, along with numerous phone calls. However,
despite CARE's repeated requests, the company has not provided
the requisite information for monitoring the ratings. In line
with extant SEBI guidelines, CARE has reviewed the rating on the
basis of the publicly available information which however, in
CARE's opinion is not sufficient to arrive at a fair rating. The
rating on Maxima's bank facilities will now be denoted as CARE D;
ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
The revision in the ratings assigned to the bank facilities of
Maxima takes into account the overdrawing in its cash credit
limits for more than 30 consecutive days.
Detailed description of the key rating drivers
Key Rating Weakness
Overdrawing in cash credit limits for more than 30 consecutive
days: Maxima was engaged in retail liquor trading in the state of
Madhya Pradesh (MP). It undertook retail trade of Indian made
foreign liquor (IMFL), beer, country liquor (CL) and wine.
However, the banker of the company has informed that Maxima has
not been able to renew shop licenses for FY19 and discontinued
the operations which have resulted in to overdrawn cash credit
limits upon inadequate drawing power.
Analytical approach: CARE, while arriving at the ratings of
Maxima, has taken a combined view of Maxima with its group
company Million Traders Bhopal Private Limited (Million) as both
these companies have common promoters and are engaged in liquor
related business.
Incorporated in 2010, Bhopal based Maxima, started commercial
operations from FY12 and was engaged in retail trade of
alcohols such as IMFL, beer, CL and wine along with its other
group company namely Million, promoted by same promoters and
engaged in liquor trading business.
N J EXPORTS: CRISIL Maintains B Rating in Not Cooperating
---------------------------------------------------------
CRISIL has been consistently following up with N J Exports (NJE)
for obtaining information through letters and emails dated
December 31, 2017 and June 29, 2018, among others, apart from
telephonic communication. However, the issuer has remained non
cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 9 CRISIL B/Stable (ISSUER NOT
COOPERATING)
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 N J Exports. This restricts
CRISIL's ability to take a forward looking view on the credit
quality of the entity. CRISIL believes that the information
available for N J Exports 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
facility of NJE continues to be CRISIL B/Stable Issuer not
cooperating'.
NJE, a registered partnership firm established in 2014, is a
merchant exporter of Vannamei shrimps. Its registered office is
in Andhra Pradesh. Mr. K Natrajan and Mrs. Jona Sahaya Rani are
the partners of the firm.
NAMASTE EXPORTS: CRISIL Reaffirms B Rating on INR7.5cr Loan
-----------------------------------------------------------
CRISIL has reaffirmed its ratings on the bank facilities of
Namaste Exports Limited (NEL) at 'CRISIL B/Stable/CRISIL A4'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Export Packing
Credit 7.5 CRISIL B/Stable (Reaffirmed)
Foreign Bill
Discounting 4.0 CRISIL B/Stable (Reaffirmed)
Letter of Credit 1.5 CRISIL A4 (Reaffirmed)
The ratings continue to reflect small scale of operations in
highly fragmented industry for leather garments export and
susceptibility of margins to adverse movement in forex rates.
These weaknesses are mitigated by promoters' extensive experience
in this line of business.
The company continued to face low demand for leather products in
the international market, which had resulted in a decline in
price realisations. This along with lower absorption in fixed
costs, continued to result in operating losses, even for fiscal
2018. Further, the liquidity is expected to remain under pressure
on the back of continued losses, however, partially supported by
high cash and cash equivalents, which are expected to be
maintained over the medium term.
Key Rating Drivers & Detailed Description
Weaknesses
* Small scale of operations in highly fragmented industry for
leather garments export: NEL has small scale of operations, as
reflected in its revenues of around INR32 crore in fiscal 2018.
The overseas market is highly competitive in nature due to
competition from other players across the globe as well as from
domestic players.
* Susceptibility of margins to adverse movement in foreign
exchange (forex) rates: About 95% of the company's sales are from
exports. The company hedges 50% of its export receivables through
forward contracts, while the balance remains uncovered exposing
the company to forex fluctuation risk.
Strength
* Promoters' extensive experience in leather industry: The
promoters have been in this line of business from over 3 decades
and has built a long standing relationships with several
customers.
Outlook: Stable
CRISIL believes that NEL's business profile will be constrained
over the medium term on account of subdued demand in the leather
industry. The outlook may be revised to 'Positive' if NEL scales
up its operations most likely on the back of ramp up of revenue
from new products, along with an improvement in its operating
margin. Conversely, the outlook may be revised to 'Negative' if
the company's operating margin continues to remain weak thus
weakening its liquidity and financial profiles.
Established in 1988 by Mrs. Madhura Bhat, NEL is engaged in
manufacture and exports of leather garments. About 95% of total
turnover is from exports to countries including Italy, Spain,
France, US, Canada. The company sells its products to famous
fashion brands including Bugatti, Spengler, Milestone, and Tommy
Hilfiger.
PAVANI POLYMERS: CRISIL Maintains 'D' Rating in Not Cooperating
---------------------------------------------------------------
CRISIL has been consistently following up with Pavani Polymers
Private Limited (Earlier known as: Bogeashavara Polymers Private
Limited (BPPL)) for obtaining information through letters and
emails dated December 31, 2017 and June 29, 2018, among others,
apart from telephonic communication. However, the issuer has
remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Long Term Loan 19.5 CRISIL D (ISSUER NOT
COOPERATING)
Proposed Cash 3.6 CRISIL D (ISSUER NOT
Credit Limit COOPERATING)
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 Bogeashavara Polymers Private
Limited. This restricts CRISIL's ability to take a forward
looking view on the credit quality of the entity. CRISIL believes
that the information available for Bogeashavara Polymers Private
Limited is consistent with 'Scenario 1' outlined in '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 BPPL continues to be 'CRISIL D Issuer not
cooperating'.
BPPL was set up in 2013 by Mr. Mr.Balaji Reddy and his family
members. The company manufactures polypropylene woven sacks,
which are used for packaging in various industries. Its
manufacturing unit is located in Hyderabad (Telangana).
RANASARIA POLYPACK: Ind-Ra Affirms BB+ LT Rating, Outlook Stable
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Ranasaria
Polypack Private Limited's (RPPL) Long-Term Issuer Rating at
'IND BB+' The Outlook is Stable.
The instrument-wise rating actions are:
-- INR200 mil. Fund-based facilities* affirmed with
IND BB+/Stable/IND A4+ rating; and
-- INR50 mil. Non-fund-based facilities* affirmed with IND A4+
rating.
* There is 100% interchangeability between fund-based and non-
fund-based working capital.
KEY RATING DRIVERS
The affirmation reflects RPPL's continued medium scale of
operations, as indicated by revenue of INR1,407.52 million in
FY18 (FY17: INR1,243.38 million). The growth in revenue was
driven by continues orders from existing customers.
The ratings continue to factor in the company's average operating
profitability with EBITDA margins of 5.4% in FY18 (FY17: 4.0%),
owing to its presence in a highly fragmented and intensely
competitive business. Return on capital employed improved to 13%
in FY18 (FY17: 7.3%). The margins improved in FY18 because of
lower cost of raw materials. Ind-Ra expects the margins to be in
the same range as FY18 over the medium term.
The ratings are constrained by RPPL's moderate credit metrics.
Interest coverage (operating EBITDA/gross interest expense)
improved to 3.86x in FY18 (FY17: 1.98x) owing to lower
outstanding debt and financial expenses, driven by a low working
limit capital utilization and an improvement in absolute EBITDA.
Net leverage (adjusted net debt/operating EBITDAR) also reduced
to 4.10x in FY18 (FY17: 7.53x); however, the ratio remained high
on account of contingent liabilities of INR100.0 million arising
from the claims against the group company Shri Geeta Sacks
Private Limited.
The ratings also factor in RPPL's comfortable liquidity position
as indicated by about 62% peak combined average utilization of
the fund-based and non-fund-based limits during the 12 months
ended June 2018.
However, the ratings continue to be supported by the company's
promoter's experience of more than three decades in manufacturing
polypropylene sacks and woven.
RATING SENSITIVITIES
Positive: Substantial growth in revenue and/or EBITDA margin
leading to an improvement in the credit metrics, all on a
sustained basis, could lead to a positive rating action.
Negative: A decline in the revenue and/or EBITDA margin leading
to deterioration in the credit metrics, all on a sustained basis,
could lead to a negative rating action.
COMPANY PROFILE
Incorporated in July 2002, RPPPL manufactures high density
polyethylene/polypropylene sacks, woven fabric, and liner
packaging bags for fertilizers, chemical sugar, rice, spices,
food grains, cement and salt, at its 600 metric tons/month unit
in Gandhinagar, Gujarat.
RATNAGIRI CHEMICALS: CRISIL Maintains D Rating in Not Cooperating
-----------------------------------------------------------------
CRISIL has been consistently following up with Ratnagiri
Chemicals Private Limited (RCPL) for obtaining information
through letters and emails dated December 31, 2017 and June 29,
2018 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 4.5 CRISIL D (ISSUER NOT COOPERATING)
Packing Credit 4.5 CRISIL D (ISSUER NOT COOPERATING)
Post Shipment
Credit 2.0 CRISIL D (ISSUER NOT COOPERATING)
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 Ratnagiri Chemicals Private
Limited. This restricts CRISIL's ability to take a forward
looking view on the credit quality of the entity. CRISIL believes
that the information available for Ratnagiri Chemicals Private
Limited 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 ratings on bank
facilities of RCPL continues to be 'CRISIL D/CRISIL D Issuer not
cooperating'.
Incorporated in 1996 by Mr. P. V. Ramana Rao, RCPL is engaged in
the manufacturing of specialty chemicals and antioxidant
additives, which find application in food processing,
petrochemical, and pharmaceutical industries. The company has its
manufacturing facilities at Parshuram (Ratnagiri) with a total
installed capacity of around 2500 MT per annum.
ROJA NOTE: CRISIL Reaffirms B+ Rating on INR5cr Cash Loan
---------------------------------------------------------
CRISIL has reaffirmed its 'CRISIL B+/Stable' rating on the long-
term bank facilities of Roja Note Book Company Private Limited
(RNBPL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL B+/Stable (Reaffirmed)
Cash Term Loan 0.5 CRISIL B+/Stable (Reaffirmed)
The rating continues to reflect the company's weak financial risk
profile because of high gearing and average debt protection
metrics, and small scale of operations in the highly fragmented
notebooks segment. These weaknesses are partially offset by the
extensive experience of the promoters.
Key Rating Drivers & Detailed Description
Weakness
* Small scale of operations: Scale of operations has remained
modest as reflected in operating income of INR13.85 crores in
fiscal 2018, as against INR13.45 crores in the previous fiscal.
Modest scale leads to limited bargaining power with customers,
which has resulted in modest operating margins.
* Below-average financial risk profile: Capital structure is
leveraged as reflected in estimated gearing of 3 times as on
March 31, 2018, owing to significant reliance on working capital
debt. Networth is estimated at a modest INR2.02 crores as on
March 31, 2018. Debt protection metrics continue to remain weak
marked by weak interest coverage ratio and net cash accruals to
adjusted debt (NCA/AD).
Strengths
* Extensive experience of the promoters: Presence of over 20
years in the notebook publishing segment has enabled the
promoters to establish a strong distribution network and healthy
brand, Roja.
Outlook: Stable
CRISIL believes RNBPL will continue to benefit from the extensive
experience of its promoters. The outlook may be revised to
'Positive' if there is a significant increase in revenue and
profitability, while financial risk profile improves. The outlook
may be revised to 'Negative' if lower-than-expected revenue and
operating margin weakens the financial risk profile.
Set up in 1989 as a partnership firm (Roja Traders) in Sivakasi
(Tamil Nadu) by Mr C Duraipandian, Mr D Whiterose, and their
family members, and reconstituted as a private limited company in
2009, RNBPL manufactures stationery products such as long
notebooks and school notebooks. Operations are managed Mr D
Sreenivasan and his brother, Mr D Bhaskaran.
SENTO VITRIFIED: CRISIL Reaffirms B+ Rating on INR17cr Term Loan
----------------------------------------------------------------
CRISIL has reaffirmed its ratings on the bank facilities of Sento
Vitrified LLP (SVL).
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 1.1 CRISIL A4 (Reaffirmed)
Cash Credit 7 CRISIL B+/Stable (Reaffirmed)
Term Loan 17 CRISIL B+/Stable (Reaffirmed)
The ratings continue to reflect SVL's working capital-intensive
and modest scale of operations, and below-average financial risk
profile. These weaknesses are partly offset by the extensive
experience of SVL's partners and their funding support.
Analytical Approach
CRISIL has treated unsecured loans of Rs 5.55 crore, extended by
the promoter as on March 31, 2018, as neither debt nor equity as
the funds are expected to be retained in business over the medium
term.
Key Rating Drivers & Detailed Description
Weaknesses
* Modest scale of operations: Scale of operations small with
sales of Rs 8 crore in fiscal 2018. Going forward sales are
expected to be modest in the range of INR30-35 cr owing to
intense competition.
* Below-average financial risk profile: Networth was modest at Rs
7.54 crore and gearing high at 2.95 times as on March 31, 2018.
Debt protection measures were average with interest coverage and
net cash accrual to total debt ratios of 2.2 times and 0.13 time,
respectively, for fiscal 2018. Going forward gearing is expected
to be below 3 times with average debt protection measures.
* Working capital-intensive operations: Extension of significant
credit to customers and high inventory results in large working
capital requirement, as reflected in estimated gross current
assets of 260 days as on March 31, 2018, working capital
requirement are expected to be large in the medium term.
Strength
* Extensive experience of the partners: Benefits from the
partners' experience of over two decades and established
relations with customers and suppliers should support the
business. Moreover, need-based funding support from the partners
is expected to continue.
Outlook: Stable
CRISIL believes SVL will continue to benefit from the extensive
experience of its partners. The outlook may be revised to
'Positive' if increase in revenue and profitability, leading to
substantial cash accrual and efficient working capital management
strengthens liquidity. The outlook may be revised to 'Negative'
if stretch in working capital cycle or any large, debt-funded
capital expenditure weakens liquidity.
Established in 2016, SVL, a partnership firm of Mr Vasantlal
Dethariya and Mr Pradeep Patel, manufactures double charged
vitrified tiles at Morbi, Gujarat and commenced commercial
operations in December 2017.
SESA MINERALS: CRISIL Withdraws B+ Rating on INR20cr Loan
---------------------------------------------------------
CRISIL has reaffirmed its rating on the bank facilities of Sesa
Minerals Limited (SML) and subsequently withdrawn the rating at
the company's request and on receipt of a no-objection
certificate from the bankers. The withdrawal is in line with
CRISIL's policy on withdrawal of bank loan ratings.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 15 CRISIL B+/Stable (Rating
reaffirmed and Withdrawn)
Letter of Credit 20 CRISIL B+/Stable (Rating
reaffirmed and Withdrawn)
Proposed Long Term 5 CRISIL B+/Stable (Rating
Bank Loan Facility reaffirmed and Withdrawn)
Incorporated in 2007 and promoted by Mr. Shankar Lal Bagri, SML
trades in steel products such as billets, scrap, iron ore
pellets, wire, and thermo-mechanically treated bars.
SHIV SHAKTI: CARE Reaffirms B+ Rating on INR25cr LT Loan
--------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Shiv Shakti Ginning and Pressing Private Limited (SSGP), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long term Bank
Facilities 25.00 CARE B+; Stable Reaffirmed
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of SSGP continues to
remain constrained on account of thin profitability, leveraged
capital structure and modest debt coverage indicators. The rating
is further constrained by susceptibility of its operating margins
to the volatile cotton prices and its presence in highly
fragmented and working capital intensive cotton ginning and
trading industry. The rating also takes cognizance of decline in
SSGP's total operating income (TOI) in FY18 (Provisional, refers
to the period April 1 to March 31) on lower demand of ginned
cotton.
The rating, however, derives strength from the vast experience of
promoters in cotton ginning, cotton oil extraction and agro
trading business and benefits derived from its favorable location
cotton growing belt of Gujarat. The ability of SSGP to scale up
its operations with improvement in profitability by moving up in
the cotton value chain along with an improvement in its capital
structure and effective management of working capital are the key
rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Decline in scale of operations and continued weak profitability:
As per FY18 (provisional) financials, SSGP's TOI witnessed
decline of ~26% to on account of low demand of ginned cotton. The
profitability metrics of SSGP continued to remain weak with thin
profitability margins due to limited value addition in cotton
ginning, cottonseed oil extraction, and trading operations.
Leveraged capital structure and modest debt coverage indicators
The overall gearing ratio of SSGP, although improved, stood high
at 1.76x as on March 31, 2018 (Prov.) (PY: 2.28x). The debt
coverage indicators of SSGP remained modest marked by modest
interest coverage ratio and high total debt to PBILDT on the back
of high reliance of working capital borrowings and thin
profitability.
Working capital intensive operations: There is significant
requirement for working capital funds especially during the peak
season towards stocking of inventory as the procurement is made
directly from farmers on cash basis. Along with this the
liquidity position of SSGP has remained tight marked by almost
full working capital limit utilization.
Presence in highly fragmented cotton ginning industry and
susceptible to fluctuations in cotton prices: Cotton ginning
business involves very limited value addition and is highly
dominated by small and medium scale units resulting in highly
fragmented nature of industry. The competition in ginning
industry remains stiff restricting the profitability margins.
Further, price of raw cotton is highly volatile in nature which
may put pressure on profitability.
Key Rating Strengths
Experienced promoters and established track record of operations:
The day to day operations of SSGP is managed by Mr. Nilesh
Thacker and Mr. Laxmikant Ruparel who possess more than two
decades of experience in cotton ginning, cottonseed oil
extraction and trading of agro-commodities.
Proximity to cotton-producing region of Gujarat and major ports
of western India: SSGP's ginning unit is located in the cotton
growing region which is the largest producer of raw cotton in
India. Also, due to its proximity to the cotton-growing region of
Gujarat, it derives benefits in terms of availability of key agro
products and lower transportation cost.
SSGP was incorporated in 2007, and the commercial production
started in December 2008. It has a composite cotton ginning and
pressing unit at Anjar in the Kutch district of Gujarat. SSGP is
promoted by Mr. Nilesh Thacker and had an installed production
capacity of 97,440 cotton bales per annum as on March 31, 2017.
SSGP also trades agricultural commodities such as cotton, cotton
seeds, wheat, maize, sugar and palmoline oil.
SHIVA RAJU: CARE Assigns B Rating to INR9.99cr LT Loan
------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Shiva
Raju Pachimatla (SRP), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 9.99 CARE B; Stable Assigned
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of SRP are tempered by
small scale of operations, declining profitability margins albeit
remained satisfactory, leverage capital structure and weak debt
coverage indicators, geographic and customer concentration risk,
risk towards project implementation and constitution of the
entity as a proprietorship firm with inherent risk of withdrawal
of capita. The ratings are, however, underpinned by experience of
proprietor for more than two decades, locational advantage of the
plant and stable outlook of go downs and poultry industry.
Going forward, ability of the firm to increase scale of
operations and maintain profitability margins, enhance the
geographical reach and complete the project without any time and
cost overrun are the key rating sensitivities.
Detailed Description of the key rating drivers
Key Rating Weaknesses
Small Scale of operations: SRP was established in the year 2004.
Further, the scale of operations of the entity marked by total
operating income (TOI), remained small at INR0.59 crore in FY17
coupled with low net worth base of INR2.11 crore as on March 31,
2017 as compared to other peers in the industry.
Declining profitability margins and thin PAT margin during review
period: The profitability margin of the company has been
declining during review period. The PBILDT margin declined from
24.46% in FY15 to 15.54% in FY17 due to increase in employee cost
and other expenses (feed supplements), however remained
satisfactory. The PAT margin declined from 15.49% in FY15 to
11.50% in FY17 due to absorption of fixed overheads.
Leveraged capital structure, weak debt coverage indicators: The
capital structure of the firm remained leveraged marked by debt
equity ratio and overall gearing ratio is deteriorated from 0.87x
and 0.87x as on march 31, 2015 to 3.13x and 3.47x as on March 31,
due to availment of agriculture loan and vehicle loan. The firm
has moderate debt coverage indicators during review period. The
Total debt/GCA of the firm deteriorated from 1.01x in FY15 to
90.76x in FY17 due to increase in total debt at the back of
availment of vehicle and agriculture loan. However, the PBILDT
interest coverage ratio improved from 8.20x in FY15 to 17.91x in
FY17 due to relative lesser interest compare to PBILDT absolute
terms.
Geographic and customer concentration risk: The client profile of
MP is limited to the state of Telangana, exposing the firm to
geographical concentration risk. The two godowns of the firm are
all located in Telangana and concentrated in area surrounding
Nalgonda District.
Risk towards project implementation: The proprietor of the firm
has planned to construct at Nagireddypally, Nalgonda Dist. With
estimated total cost of INR 14.09 crore which is to be funded
through bank term loan of INR 9.99 crore and unsecured loan of
INR 1.73 crore and the remaining cost of INR 2.37 crore from
proprietor's fund. Therefore, the ability of the firm to complete
the project without any cost or time over run will remain
critical from credit perspective.
Constitution of the entity as a proprietorship firm with inherent
risk of withdrawal of capital: The firm being a proprietorship
firm is exposed to inherent risk of capital withdrawal by
proprietor due its nature of constitution. Any substantial
withdrawals from capital account would impact the net worth and
thereby the gearing levels.
Highly competitive and fragmented nature of business: The company
is engaged into the business of providing cold storage facilities
on rental basis to farmers where the profitability margins
comparing to other industry will be low. Apart from that there
are numerous organized and unorganized players entering into the
market which makes the industry competitive nature.
Key Rating Strengths
Experience of Partners for more than two decades in agricultural
industry: Shiva Raju Pachimatla was established in 2004 promoted
by Mr Shiva Raju Pachimatla. The proprietor of the firm is having
more than two decades of experience in agricultural and poultry
business. Through their vast experience in agricultural business,
the proprietor will be able to establish healthy relationship
with farmers and local traders.
Growth in total operating income during review period: The total
operating income of the SRP increased from INR0.34 crore in FY15
to INR0.59 crore in FY17 due to increase in repeat orders for
trading of birds from existing customers and addition of new
customers as well. The firm has achieved total operating income
of INR 0.35 crore in FY18 (Provisional). The proprietor
diversified the business into godown business so he paid lesser
attention to the poultry business.
Location advantage of the plant: The plant location of the firm
is located in Nalgonda district, which is horticultural crops
growing area and promoters having good network with farmers and
traders. There is abundant availability of inputs such as food
grains and other materials in the proposed area of the district.
Comfortable operating cycle days: The firm is engaged in trading
of birds where he maintains inventory for 10 to 15 days and the
firm receives the payment from its customers within 20-25 days
and makes the payment to its supplier immediately. Thus, the
operating cycle during review period stood at 36 days in FY17.
Financial closure achieved for the ongoing project: The
proprietor of the firm has planned to construct at
Nagireddypally, Nalgonda Dist. With estimated total cost of INR
14.09 crore which is to be funded through bank term loan of INR
9.99 crore and unsecured loan of INR 1.39 crore and the remaining
cost of INR 2.37 crore from proprietor's fund. Furthermore, the
financial closure (Rs. 9.99 crore) of the total project has been
achieved.
Stable outlook of warehousing industry and poultry industry:
Warehousing Market in India states that the demand for good
quality state-of-the-art warehouses will be a major requirement
in the country given the growing logistics industry. The
evolution from storage godowns to multipurpose logistic centers
is highly desired. Warehouses form a crucial supply chain element
which is key to both customer satisfaction and cost reduction.
Warehouses today serve as a stocking point as well as
consolidation centers for multiple sourcing locations which
provide cross docking facilities to retail distributors, sorting
centers for customer deliveries, and assembly facilities for
final packaging and bundling. The organized sector has a minor
market share, but claims a major portion of the revenue. The
warehouse market is subjected to stringent regulations and
policies regarding licensing, performance, and accountability.
The current fragmented state of the sector coupled with growth in
the overall economy provides tremendous potential for the
warehousing sector to flourish.
Poultry products like eggs have large consumption across the
country in the form of bakery products, cakes, biscuits and
different types of food dishes in home and restaurants. The
demand has been driven by the rapidly changing food habits of the
average Indian consumer, dictated by the lifestyle changes in the
urban and semi-urban regions of the country. The demands for
poultry products are sustainable and accordingly, the kind of
industry is relatively insulated from the economic cycle.
Telangana based Shiva Raju Pachimatla, established as a
proprietorship firm in the year 2004 and is promoted by Mr.
Shiva Raju Pachimatla. The firm is engaged in to poultry business
(trading of birds) and is also diversifying its business into
godown leasing for agricultural products.
Currently, the firm has planned to construct 4 godowns and
railway siding in the total land area of 2.30 acres with a
storage capacity of around 16500 MT for food crops like rice,
wheat, etc. The firm started the project work in the month of
February 2018 and is expecting to start the commercial operations
from August 2018. The total project cost of construction of
godowns and railway siding is INR 14.09 crore which is proposed
to be funded through bank term loan of INR 9.99 crore, unsecured
loan of INR 1.73 lakh and promoter fund INR 2.37 crore. As on
March 31 2018, the firm has incurred INR 13.19 crore towards
purchase of land, civil work, share in cost of railway siding and
Preliminary & preoperative exp which was funded in the form of
promoter's fund, unsecured loans and term loan.
SHREE VARDHMAN: Ind-Ra Withdraws 'D' Long Term Issuer Rating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has withdrawn Shree Vardhman
Township Private Limited's (SVTPL) Long-Term Issuer Rating of
'IND D'.
The instrument-wise rating action is:
-- The IND D rating on the INR400 mil. Term loan due on August
2022 is withdrawn.
KEY RATING DRIVERS
Ind-Ra is no longer required to maintain the ratings for the
above term loan, as the agency has received no dues certificate
from the lenders. Ind-Ra will no longer provide analytical and
rating coverage for SVTPL.
COMPANY PROFILE
Incorporated in 2005, SVTPL undertakes construction of
residential and commercial buildings. Its registered office is
located in New Delhi.
SHREENIDHI METALS: CARE Assigns B+ Rating to INR6.22cr LT Loan
--------------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of
Shreenidhi Metals Private Limited (SMPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank
Facilities 6.22 CARE B+; Stable Assigned
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of SMPL remain
constrained on account of its modest scale of operations coupled
with low net worth base, moderate operating profit margin coupled
with low net profit margin, leveraged capital structure along
with weak debt coverage indicators in FY18 (Prov., refers to the
period of April 1 to March 31) and working capital intensive
nature of operations. The rating further remains constrained on
account of its presence in highly fragmented and cyclical nature
of metal industry and susceptibility of profit margins to
volatility in raw material price. Further, the rating derives
comfort from experienced directors of the company coupled with
reputed customer base.
Ability to increase its scale of operations with improvement in
capital structure and liquidity indicators would remain the key
rating sensitivities.
Detailed description of the key rating drivers
Key Rating Weaknesses
Modest scale of operations coupled with low net worth base During
FY18 (Prov.) the Total Operating Income (TOI) of the company
stood at INR18.54 crore which dipped by 7% from INR20.00 crore
during FY17. Further, SMPL's net worth was also relatively low at
INR 1.92 crore as on March 31, 2018 (Prov.) as against its scale
of operation. The small net worth limits its financial
flexibility to meet any exigency.
Moderate operating profit margin coupled with low net profit
margin: Operating margin of the company stood moderately
comfortable as PBILDT margin has improved by 37 bps and stood at
5.57% as compared to 5.20% during FY17. Consequently, the PAT
margin has also marginally increased but stood thin at 0.41%
during FY18 as compared to 0.39% during FY17.
Leveraged capital structure and weak debt coverage indicators: As
on March 31, 2018 (Prov.), the capital structure of SMPL has
deteriorated over the previous year and stood leveraged as marked
by an overall gearing ratio stood at 3.94 times as against 3.53
times as on March 31, 2017 on account of increase in total debt.
The debt coverage indicators also stood weak FY18, marked by
total debt to GCA of 20.14 years in FY18 (Prov.) as against 15.59
years in FY17 due to increase in total debt coupled with marginal
decrease in the GCA level. Further, interest coverage ratio has
deteriorated and stood moderate at 1.66 times during FY18 (Prov.)
as against 1.78 times during FY17 due to increase in interest
expense coupled with decline in PBILDT.
Working capital intensive nature of operations: The working
capital intensity remains high as it is associated with the
business which requires high amount of working capital to manage
the business operation. During FY18 (Prov.), operating cycle of
the company has elongated to 89 days as against 66 days during
FY17 mailny on account of increase in collection period as
against decrease in creditors period.
As on March 31, 2018 (Prov.) the current ratio of the company
improved over the previous year and stood modest at 1.19 times as
against 1.01 times as on March 31, 2017.
Presence in highly fragmented and cyclical nature of metal
industry: SMPL operates in highly fragmented and competitive
aluminum industry having presence of large number of medium
sized players. Also, the presence of big sized players with
established track record and network results into intense
competition in the industry.
Susceptibility of profit margins to volatility in raw material
price: The main raw material for the company is Aluminum whose
prices are governed by international supply and demand which will
have direct impact on the raw material prices and consequently
profitability of SMPL.
Key Rating Strengths
Experienced directors and established track record of the
company: Directors of the company have good experience in same
line of business. During the tenor of SMPL, directors have
developed good reputation in the market as well good relationship
with its suppliers and customers.
Reputed customer base: The clientele base of the company contains
reputed customers in utensils industry as well as power sector
industry. The company gets regular orders from all these
customers.
Vadodara (Gujarat) based Shreenidhi Metals Private Limited (SMPL)
was incorporated in 2013 as a private limited company and is run
by Ms. Sadhna Maloo and Ms. Nikita Jain. The company is engaged
into manufacturing of aluminum circles and sheets, which find its
application in utensils industry and power sector with installed
capacity of 1800 MT per annum as on March 31, 2018. Plant of the
company is located at Waghodia, Gujarat.
SHYAM TEA: CARE Lowers Rating on INR6.90cr LT Loan to B
-------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Shyam Tea Plantation (STP), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank 6.90 CARE B; ISSUER NOT COOPERATING;
Facilities Revised from CARE B+; ISSUER
NOT COOPERATING
Detailed Rationale and key rating drivers
CARE has been seeking information from STP to monitor the rating
vide letters/e-mails communications dated May 4, 2018, May 9,
2018, June 5, 2018 and numerous phone calls. However, despite
CARE's repeated requests, the firm has not provided the requisite
information for monitoring the ratings. In the absence of minimum
information required for the purpose of rating, CARE is unable to
express opinion on the ratings. In line with the extant SEBI
guidelines CARE's rating on STP's bank facilities will now be
denoted as CARE B; ISSUER NOT COOPERATING.
Users of these ratings (including investors, lenders and the
public at large) are hence requested to exercise caution while
using the above ratings.
Detailed description of the key rating drivers
At the time of last rating on March 1, 2017 the following were
the rating weaknesses and strengths;
Key Rating Weaknesses
Susceptible to vagaries of nature: Tea production, besides being
cyclical, is susceptible to vagaries of nature. STP's tea garden
is located in Jorhat, Assam which sometimes witnesses erratic
weather conditions including drought-like situation. Therefore
adverse natural events have negative bearing on the productivity
of tea gardens in the region and accordingly STP is exposed to
vagaries of nature.
Labour intensive nature of business: The perennial nature of the
tea industry makes it highly labour intensive, entailing huge
expenditure on employees (by way of salaries & wages, various
employee welfare facilities, etc). Though STP has not experienced
any labour problem since inception, it remains a key factor in
the smooth running of the business.
Volatility in tea price: The prices of tea are linked to the
auctioned prices, which in turn, are linked to prices of tea in
the international market. Hence, significant price movement in
the international tea market, affects STP's profitability
margins. Further, tea prices fluctuate widely with demand-supply
imbalances arising out of both domestic and international
scenarios. Tea is perishable product and demand is relatively
price inelastic, as it caters to all segments of the society.
While demand has a strong growth rate, supply can vary depending
on climatic conditions in the major tea growing countries. Unlike
other commodities, tea price cycles have no linkage with the
general economic cycles, but with agro-climatic conditions.
High competition: While the tea industry is an organised agro-
industry, it is highly fragmented in India with presence of
many small, mid-sized and large players.
Key Rating Strengths
Experienced partners: STP is currently managed by Shri Kamal
Jalan (Graduate, Managing Partner) having about 20 years of
experience in similar line of business, Shri Devidutt Beriya
(Graduate) having about 7 years in similar line of business, Shri
Sunil Kumar Agarwalla (Graduate) having about 8 years in similar
line of business, Shri Binod Kumar Saraf (Graduate) having about
10 years in similar line of business and Smt. Jyotirekha Goswami
(Graduate) having about 5 years in similar line of business and
all of them being friends.
Analytical approach: Standalone
STP was established as a partnership firm in August, 2012 by Shri
Kamal Jalan, Shri Devidutt Beriya, Shri Sunil Kumar Agarwalla,
Shri Binod Kumar Saraf and Smt. Jyotirekha Goswami, based out of
Jorhat, Assam. STP undertook an initial project of setting up a
tea manufacturing unit at Jorhat, Assam and the manufacturing
unit commenced operation since August, 2013 with an installed
capacity of 15,00,000 kg per annum. STP undertook an expansion
activity in FY15 whereby the existing processing capacity of
15,00,000 kg per annum has been enhanced to 20,00,000 kg per
annum.
SREE SREE: CRISIL Maintains B Rating in Not Cooperating Category
----------------------------------------------------------------
CRISIL has been consistently following up with Sree Sree Sitaram
Cold Storage Private Limited (SCSPL) for obtaining information
through letters and emails dated December 31, 2017 and June 29,
2018 among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 2.78 CRISIL B/Stable (ISSUER NOT
COOPERATING)
Proposed Long Term 3.22 CRISIL B/Stable (ISSUER NOT
Bank Loan Facility COOPERATING)
Working Capital 1.00 CRISIL B/Stable (ISSUER NOT
Demand Loan COOPERATING)
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 SCSPL, which restricts
CRISIL's ability to take a forward looking view on the entity's
credit quality. CRISIL believes information available on SCSPL 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 SCSPL continues to be 'CRISIL B/Stable Issuer not
cooperating'.
Incorporated in 1978, SCSPL provides a cold storage facility to
potato farmers and traders in Hooghly, West Bengal. The company
has a capacity of 192,000 tonnes. The company is promoted by the
West Bengal-based Kundu family, which has been in the cold
storage business for over three decades. Operations are managed
by Mr. Amitava Kundu.
SRI KAILASANADHA: CRISIL Maintains D Rating in Not Cooperating
--------------------------------------------------------------
CRISIL has been consistently following up with Sri Kailasanadha
Cotton Syndicate Private Limited (SKS) for obtaining information
through letters and emails dated December 31, 2017 and June 29,
2018, among others, apart from telephonic communication. However,
the issuer has remained non cooperative.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 10 CRISIL D (ISSUER NOT
COOPERATING)
Proposed Cash 2 CRISIL D (ISSUER NOT
Credit Limit COOPERATING)
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 Sri Kailasanadha Cotton
Syndicate Private Limited. This restricts CRISIL's ability to
take a forward looking view on the credit quality of the entity.
CRISIL believes that the information available for Sri
Kailasanadha Cotton Syndicate Private Limited 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 SKS continues to be 'CRISIL D Issuer not
cooperating'.
Set up as a private limited company in 2004 by Mr. T Ramkalyan,
Ms. T. Vijaya Lakshmi and Mr. T Surya Raghvendra, SKS is engaged
in ginning and pressing of raw cotton. The company's ginning unit
is based in Guntur (Andhra Pradesh).
SUPER SHIV: CARE Assigns D Rating to INR32.44cr LT Loan
-------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of Super
Shiv Shakti Chemicals Private Limited (SSCPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term Bank
Facilities 32.44 CARE D Assigned
Detailed Rationale & Key rating Drivers
The ratings assigned to the bank facilities of SSCPL are
primarily constrained on account of its ongoing delay in debt
servicing owing to stressed liquidity position with net and cash
loss in FY18 (FY refers to the period April 1 to March31).
Detailed description of the key rating drivers
Key Rating Weakness
Delay in debt servicing owing to liquidity crunch: On August 11,
2016, a blast occurred due to short circuit in the factory due to
which the Department of Explosives closed down the factory. SSCPL
filed a writ petition in high court and received an order to
restart the factory on August 3, 2017 and thus operations were
commenced from August 23, 2017. Due to non-production activities
for a period of one year, the liquidity position stood stressed.
Thus, there are instances of delayed interest and principal
repayments in accounts as well as overdrawing in working capital
bank borrowings.
Bhilwara based Super Shiv Shakti Chemicals Private Limited
(SSCPL) was incorporated in 2004 as a private limited company.
SSCPL is engaged in the manufacturing of industrial explosives,
detonating fuse and detonators with installed capacity of 30,000
Metric Tonne. The company has a license from Department of
Explosives under Explosive Act, 1884.
ZEE KNITS: Ind-Ra Maintains 'BB' Issuer Rating in Non-Cooperating
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has maintained Zee Knits &
Weavers 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 the rating. The rating will
continue to appear as 'IND BB (ISSUER NOT COOPERATING)' on the
agency's website.
The instrument-wise rating actions are:
-- INR150 mil. Fund-based working capital limit maintained in
Non-Cooperating Category with IND BB (ISSUER NOT
COOPERATING)/IND A4+ (ISSUER NOT COOPERATING) rating; and
-- INR4 mil. Term loan maintained in Non-Cooperating Category
with IND BB (ISSUER NOT COOPERATING) rating.
Note: ISSUER NOT COOPERATING: The ratings were last reviewed on
April 5, 2016. Ind-Ra is unable to provide an update, as the
agency does not have adequate information to review the ratings.
COMPANY PROFILE
Zee Knits & Weavers manufactures readymade garments at its 12,000
pieces per day facility in Ludhiana, Punjab. It exports garments
to the Middle East and South America. The company has its
registered office in Delhi.
* INDIA: Housing Downturn Puts $20BB in Bank Loans at Risk
----------------------------------------------------------
Bloomberg News reports that Indian lenders struggling to recoup
loans worth about $20 billion to troubled property developers
have to contend with another challenge: A lackluster recovery
from the worst home-sales slump this decade.
Bloomberg says to recover the dues, banks are taking control of
land parcels and unfinished projects that can be sold along with
loans. This comes at a time when home sales volumes have declined
about 40 percent over four years and prices have dropped as much
as 20 percent on average, said S. Sriniwasan, managing director
of Kotak Investment Advisors, which oversees the alternate assets
business of parent Kotak Mahindra Bank Ltd, Bloomberg relays.
"Weaker hands are going out of business in realty and lenders are
working on recovering $20 billion worth of stressed loans to
developers," Bloomberg quotes Sriniwasan, who has been bidding to
buy properties that banks are putting on the block, as saying.
"All those land banks, which developers used to tout as a
valuation booster, are turning into bank lands now," and
creditors will have to take haircuts while selling the
collateral.
According to Bloomberg, developers, including Jaypee Infratech
Ltd. and Unitech Ltd., have been taken before India's courts by
irate homeowners and creditors as apartment sales slumped in the
once red-hot South Asian market following the triple whammy of a
surprise cash ban, tax reforms and a consumer-protection law for
the sector. Last year, home sales plunged to a seven-year low and
prices in some of India's biggest cities tumbled, Bloomberg
notes.
There is an oversupply of land parcels in the market, weighing
down on pricing, as banks push to recover loans, Bloomberg
discloses citing Indiabulls Asset Reconstruction Company Ltd. The
Mumbai-based bad loan buyer has already purchased stressed realty
assets worth INR4 billion ($58 million) and is examining another
three buyouts, said Kiran Shingwekar, chief executive officer of
IARCL.
"Banks have limited head room and expertise in bringing a
stressed realty project back on track and hence it makes sense
for them to sell down the loans and assets to firms specializing
in the segment," Shingwekar, as cited by Bloomberg, said. "Their
lack of willingness to take steep haircuts has been delaying some
of these deals."
Bloomberg notes that lenders may be running short of options
though. India's central bank issued a directive in February
forcing them to restructure loans quickly or take defaulters to
bankruptcy court. The 180-day deadline to recast stressed debt --
replacing myriad schemes that could drag on indefinitely -- is
expected to trigger a bout of deals.
Outstanding loans from banks to realty developers have been
little changed at about INR1.8 trillion for the two years through
May, Bloomberg discloses citing data from the central bank. In
addition, non-banking finance companies have an exposure of 2.2
trillion rupees to the sector till December, according to an
Ambit Capital report published in April, Bloomberg relays.
According to Bloomberg, Sriniwasan said lenders including banks
and finance companies operate at the highest-risk end of the
realty market, providing financing for land acquisition or
construction.
"This $20 billion stress is just at banks. We don't even know
what level of non-performing loans is there in non-finance
companies' books since their recognition norms are more relaxed
and bad loans are not really coming out," he said, Bloomberg
relays. "The day of reckoning is not far."
===============
M A L A Y S I A
===============
TEK SENG: Says Suspension of Solar Business Won't Trigger PN17
--------------------------------------------------------------
The Sun Daily reports that Tek Seng Holdings Bhd said the
temporary cessation of its photovoltaic solar business will not
result in the group triggering Practice Note (PN17) of the Main
Market Listing Requirements of Bursa Securities.
According to the report, the Penang-based company was responding
to Bursa Malaysia's query after it announced last week that its
50.69%-owned subsidiary TS Solartech Sdn Bhd decided to halt its
entire production activities this quarter, in the wake of intense
market competition.
The Sun Daily relates that Tek Seng is non-committal on how soon
it will resume the photovoltaic solar business, saying it will
depend on the demand of the solar industry and any changes to
regulations and policies which are favorable to TS Solartech.
"Nevertheless, the company will update the status or any
development on quarterly basis," it said.
Tek Seng said TSST contributed 65% and 41% to the group's net
profit and revenue for the financial year ended Dec. 31, 2017,
the report relays.
Despite the temporary cessation, it said the group intends to
keep the remaining assets of TS Solartech, but if there are any
disposal of assets, it would make the corresponding announcement
to Bursa Malaysia Securities accordingly, the Sun Daily reports.
The report adds that Tek Seng also highlighted that TS Solartech
is still able to continue with the provision of the activities
regarding 1.1766MW feed-in tariff solar segment because this
segment is not related to the production business.
TS Solartech will continue its activities of the solar system
which involve design, consultancy and maintenance services. It is
still maintaining its personnel for the mentioned activities thus
there is no impact to the operation of the solar system, it
added, the Sun Daily relays.
====================
N E W Z E A L A N D
====================
MATRIX HOMES: Receivership Offers Lessons for Industry
------------------------------------------------------
Patrick O'Meara at Radio New Zealand reports that the collapse of
modular housing manufacturer Matrix Homes is being held up as a
warning to the rest of the industry.
BDO Wellington partners Iain Shephard and Jessica Kellow were
appointed receivers to the Trentham-based Matrix company last
week when its owners could no longer support its debts worth
millions of dollars, RNZ discloses.
Up to 30 Matrix workers have lost their jobs, the report says.
The company was launched in 2015 amid fanfare with then-Finance
Minister Bill English doing the honors.
Matrix manufactured house components in a former car assembly
plant in Upper Hutt. The components were then taken to building
sites and assembled.
According to RNZ, Ms. Kellow said the business had work in the
pipeline but simply ran out of cash.
"It was essentially a start-up . . . and it has burnt through a
lot of cash to get to the point where it got some forward orders,
but it doesn't have the cash flow to keep it going till those
orders come to fruition," the report quotes Ms. Kellow as saying.
Pre-fab houses is one option being looked at for the government's
KiwiBuild policy, which aims to build 100,000 houses over the
next decade.
Matrix was offering one-bedroom homes for under $100,000 and four
bedroom houses for about $200,000 with piling and transport costs
on top of that.
Its houses had been used in a development in Mangere in Auckland,
as well as around Wellington.
RNZ relates that Ms. Kellow said Matrix's collapse offered
lessons for an industry which was still relatively new and
untested.
"It's volume driven, there's a significant outlay and so you need
the volumes coming through . . . the modular home concept is new
to New Zealand and it's taken time for councils to come on board
with compliance issues . . . Matrix was a little ahead of the
game."
She said there was a lot of interest in buying some or all of the
collapsed company.
"We've had 20 or 25 expressions of interest. They're from
traditional builders to those who are in the modular house
industry."
RNZ adds that Ms. Kellow said details of the business were being
sent out to potential buyers and discussions would be with
interested parties in due course.
BDO Wellington partners Iain Shephard and Jessica Kellow were
appointed as receivers on July 17 by Matrix Homes' managing
director Sean Murrie, according to Stuff.co.nz.
*********
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
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Information contained herein is obtained from sources believed
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thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000.
*** End of Transmission ***