/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/190201.mbx T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Friday, February 1, 2019, Vol. 22, No. 023 Headlines A U S T R A L I A CHOOSE NATURAL: Second Creditors' Meeting Set for Feb. 8 HALIFAX INVESTMENTS: Shortfall Swells to AUD15MM to AUD25MM HARD ROCK: First Creditors' Meeting Set for Feb. 8 IBRED PTY: First Creditors' Meeting Set for Feb. 11 OVERSTAR HOLDINGS: Second Creditors' Meeting Set for Feb. 8 C H I N A BOHAI STEEL: Creditors Approve Bankruptcy Reorganization Plan CHINA MINSHENG: Defaults on Principal Repayment of CNY3BB Note CHUYING AGRO-PASTORAL: Pig Breeder is Running Low on Pigs GREENTOWN CHINA: Moody's Rates Proposed USD Perpetual Notes Ba3 JIANGSU NEWHEADLINE: Fitch Affirms and Then Withdraws BB IDR YANZHOU COAL: Fitch Raises LT IDR to BB-, Outlook Stable I N D I A A-1 COLD: CARE Migrates B+ Rating to Not Cooperating Category ADHUNIK INDUSTRIES: Ind-Ra Raises Long Term Issuer Rating to BB AGRAWAL STRUCTURE: Ind-Ra Moves BB LT Rating to Non-Cooperating AISHWARYA IMPEX: Ind-Ra Migrates BB- LT Rating to Non-Cooperating BLUE AUTOWORLD: CARE Assigns B+ Issuer Rating; Outlook Stable CARE TECH: Ind-Ra Gives B+/A4 Ratings to INR20MM Loan CHABBRA'S ASSOCIATES: Ind-Ra Affirms BB on INR200MM Loan CHANDRA HASNI: Ind-Ra Gives B+ Ratings to INR150MM Loans CLUB 29: CARE Migrates 'D' Rating to Not Cooperating Category D.P. GARG: Ind-Ra Withdraws B+ LT Issuer Rating on INR115MM Loan DHARTI DREDGING: CARE Migrates D Rating to Not Cooperating DOLPHIN OFFSHORE: CARE Assigns C Rating to INR25.50cr LT Loan ENCORP POWERTRANS: Ind-Ra Affirms BB+ on INR240MM Capital Limits GARG GRANITES: CARE Maintains B+ Rating in Not Cooperating GARG INDUSTRIES: Ind-Ra Retains BB- LT Rating in Non-Cooperating GOODWEAR FASHION: Ind-Ra Affirms 'BB' on INR4.53MM Loan JALARAM INDUSTRIES: CARE Moves 'B+' Rating to Not Cooperating JAYA POULTRY: Ind-Ra Migrates 'B' LT Rating to Non-Cooperating JET AIRWAYS: SBI Set to Acquire 15% Stake in Carrier JET AIRWAYS: May Turn to Adani Group for Investment JUNEJA SONS: CARE Assigns 'B' Rating to INR9.12cr LT Loan K.K LEISURES: CARE Migrates B Rating to Not Cooperating Category K&R RAIL: Ind-Ra Lowers Long Term Issuer Rating to 'BB+' KISHORE INFRASTRUCTURES: Ind-Ra Lowers LT Issuer Rating to BB+ L.C. INDUSTRIES: CARE Assigns B+ Rating to INR5cr LT Loan LONDON STAR: CARE Migrates D Rating to Not Cooperating Category METTU CHINNA: CARE Migrates B Rating to Not Cooperating Category OM SREE PAPERTEK: Ind-Ra Affirms BB on INR225MM Loan Due 2024 P.M. AGRO: CARE Migrates D Rating to Not Cooperating Category PRAKASH CORRUGATED: CARE Migrates D Rating to Not Cooperating PRASAD LIFESPACES: CARE Migrates B+ Rating to Not Cooperating RELIGARE ENTERPRISES: Ind-Ra Withdraws BB- Rating, Outlook Stable RICOH INDIA: Ind-Ra Affirms 'D' LT Issuer Rating on INR2BB NCDs RIDCOR INFRA: Ind-Ra Lowers Senior Project Bank Loans Rating to D SAMARTH COMMODITIES: CARE Migrates B+ Rating to Not Cooperating SANEE INFRASTRUCTURE: CARE Moves B- Rating to Not Cooperating SARA SPINTEX: CARE Migrates D Rating to Not Cooperating Category SHREE JAGDAMBA: CARE Reaffirms B+ Rating on INR16.32cr Loan SHREE VENKATESH: Ind-Ra Withdraws 'BB' on INR160MM Term Loan SHRI RAM: CARE Migrates B+ Rating to Not Cooperating Category SHRINATH COTTON: CARE Lowers Rating on INR6.03cr Loan to D SIR BIOTECH: Ind-Ra Migrates BB+ Issuer Rating to Non-Cooperating SONALE FABRICS: Ind-Ra Assigns BB on INR6MM LongTerm Loans SRI BALAJI: CARE Migrates B Rating to Not Cooperating Category SUN STEEL: Ind-Ra Migrates BB- Issuer Rating to Non-Cooperating SVERA AGRO: CARE Assigns B+ Rating to INR15cr LT Loan THERMO PRODUCTS: CARE Moves D Rating to Not Cooperating Category TIRUMALA DALL: CARE Moves B+ Rating to Not Cooperating Category VADALIA FOODS: Ind-Ra Migrates B Issuer Rating to Non-Cooperating N E W Z E A L A N D MAHANA ESTATE: Assets Sold to Booster for Undisclosed Price S R I L A N K A SRI LANKA TELECOM: Fitch Withdraws B IDR for Commercial Reasons - - - - - ================= A U S T R A L I A ================= CHOOSE NATURAL: Second Creditors' Meeting Set for Feb. 8 -------------------------------------------------------- A second meeting of creditors in the proceedings of Choose Natural Food Pty Ltd, formerly trading as "Bee Bubbles", "The Bunyip Beekeeper", "Hope Cottage Soaps", has been set for Feb. 8, 2019, at 10:30 a.m. at the offices of Australian Institute of Company Directors Melbourne, at Optus Centre, Level 26, 367 Collins Street, in Melbourne, Victoria. 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 Feb. 7, 2019, at 4:00 p.m. Grahame Ward and Domenic Calabretta of Mackay Goodwin were appointed as administrators of Choose Natural on Jan. 3, 2019. HALIFAX INVESTMENTS: Shortfall Swells to AUD15MM to AUD25MM ----------------------------------------------------------- NZ Herald reports that the voluntary administrators of collapsed Australian derivatives trader Halifax have estimated the deficiency in the company's assets to be between AUD15 million and AUD25 million, up from an original estimated shortfall of AUD10 million-AUD20 million. According to the Herald, administrators Morgan Kelly, Phil Quinlan and Stewart McCallum, of Ferrier Hodgson, said they had been considering the options for the timely return of shareholder funds. How much of that shortfall relates to New Zealand investors is not yet clear, although the administrators said client funds totaling NZ$44 million on one of three investment platforms used by Halifax were identified as held by New Zealanders, the Herald relates. The options were a deed of company arrangement (DOCA) or placing Halifax into liquidation, the Herald says. On November 23, Halifax's investor account balances totalled approximately AUD211 million, the Herald discloses. "We estimate that there is a deficiency in the assets on hand to support these balances of approximately AUD15 million to AUD25 million," Mr. Kelly said in the report. The Herald says initial investigations indicated that the deficiency had accumulated over at least the last 24 months. Factors impacting the final shortfall include unrealised profit or loss positions in relation to open trades, currency fluctuations and ongoing market fluctuations, the Herald adds. The exact size will only be known once all investor positions have been closed out, the report said. While the Australian Financial Services License and the Derivatives Issuer License (New Zealand) have been suspended by the Australian Securities and Investment Commission and the Financial Markets Authority, investors are still able to close out their positions during the suspension, the report said, the Herald relays. The Herald adds that the administrators have undertaken an initial analysis of the funds flow process on the Halifax's "MT4" and "MT5" platforms. "The process of allocating and tracing individual investor funds will likely be a complex and lengthy process," the report said. The administrators said they expected to further update investors in mid to late February, the Herald relays. About Halifax Halifax Investment Services Pty Ltd was a financial services licensee headquartered in Sydney with a partially-owned subsidiary in Auckland, New Zealand. Morgan Kelly, Stewart McCallum and Phil Quinlan, of Ferrier Hodgson, were appointed as joint voluntary administrators of Halifax, appointed on Nov. 23, 2018. They were also appointed administrators of Halifax New Zealand on Nov. 27, 2018. HARD ROCK: First Creditors' Meeting Set for Feb. 8 -------------------------------------------------- A first meeting of the creditors in the proceedings of Hard Rock Developments Pty Ltd will be held on Feb. 8, 2019, at 3:00 p.m. at the offices of PCI Partners Pty Ltd, at Level 8, 179 Queen Street, in Melbourne, Victoria. Philip Newman of PCI Partners Pty Ltd was appointed as administrator of Hard Rock Developments on Jan. 29, 2019. IBRED PTY: First Creditors' Meeting Set for Feb. 11 --------------------------------------------------- A first meeting of the creditors in the proceedings of: - Ibred Pty Ltd - Ibred Opra Pty Ltd - Ibred Caz Pty Ltd - Ibred Professional Pathways Pty Ltd - Now Nation of Wellbeing Pty Ltd will be held on Feb. 11, 2019, at 10:00 a.m. at the offices of SV Partners, at 22 Market St, in Brisbane, Queensland. David Michael Stimpson of SV Partners was appointed as administrator of Ibred Pty on Jan. 30, 2019. OVERSTAR HOLDINGS: Second Creditors' Meeting Set for Feb. 8 ----------------------------------------------------------- A second meeting of creditors in the proceedings of Overstar Holdings Pty Ltd, trading as Muzz Buzz Riverton, has been set for Feb. 8, 2019, at 10:30 a.m. at the offices of Worrells Solvency and Forensic Accountants, at Level 4, 15 Ogilvie Road, in Mount Pleasant, 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 Feb. 7, 2019, at 5:00 p.m. Simon Cathro and Mervyn Kitay of Worrells Solvency & Forensic Accountants were appointed as administrators of Overstar Holdings on Oct. 29, 2018. ========= C H I N A ========= BOHAI STEEL: Creditors Approve Bankruptcy Reorganization Plan ------------------------------------------------------------- China Knowledge reports that representatives of Bohai Steel's more than 100 creditors have approved a bankruptcy reorganization plan to restructure the debt-ridden company. China Knowledge relates that the approval comes three years after the company was wrecked by a debt crisis and may allow its creditors to recover its US$36 billion worth of debts and may even allow the company to revive its business. According to the report, Bohai Steel's bankruptcy reorganization is China's largest ever effort to bailout a financially crippled company after the National Development and Reform Commission assessed the case and deemed the company still worthy of a rescue. The reorganization effort will involve 48 companies under the Bohai Steel umbrella and will see the liquidation of another 160 subsidiaries, China Knowledge discloses. As of April last year, Bohai Steel and its subsidiaries had US$36 billion worth of outstanding debts but only US$17 billion worth of assets, leading the company's bankruptcy administrators to come up with a 10-year plan to restructure company. Under the plan, Bohai Steel's assets will be divided into 17 companies with its core steel business assets and another 31 companies with non-core assets. The core business arms which is worth US$8.7 billion will be partially sold to private steel manufacturer Tangshan Delong Co., with the latter also agreeing to invest another US$3 billion into Bohai Steel to repay debts and support its business operations. Bankruptcy administrators hope that the new investor will be able to revitalize Bohai Steel's business and allow it to qualify for a public listing in 2023, which will allow some of its creditors to exit. As for the company's non-core assets, these will be sold to bad loan manager China Cinda Asset Management Co., to be repackaged into a trust product and generate yields for creditors. About Bohai Steel Bohai Steel Group Co Ltd is a steelmaker based in northeast China. As reported in the Troubled Company Reporter-Asia Pacific on Aug. 29, 2018, China Money Network said Bohai Steel Group, a debt-stricken state-owned enterprise, has entered bankruptcy proceedings as Tianjin Higher People's Court accepted its creditor Tianjin Seri Machinery Equipment Corp., Ltd.'s application to reorganize Bohai Steel Group on August 24. CHINA MINSHENG: Defaults on Principal Repayment of CNY3BB Note -------------------------------------------------------------- China Knowledge reports that China Minsheng Investment Group (CMIG) has failed to make a partial repayment of an CNY3 billion private placement note, raising concerns that there may be more defaults to come. China Knowledge relates that investors of the note which has a coupon of 5.2% were set to receive their money back earlier on Jan. 29 but have yet to receive payment from the company, marking the first time the company has failed to make a loan repayment on time. According to the report, CMIG which is an investment group owned by 59 private Chinese companies has said that it is working on repayment procedures and declined to make any further comments on the issue. The group which depends heavily on short-term loans from banks and bond issuances to conduct its investment business is now facing a liquidity crisis as Chinese regulators are putting increasing pressure on companies to reduce their debt and leverage, the report says. As a result, the company is facing difficulties in rolling over its old debts and secure new financing sources. Last week, a bond issued by the company which will mature in December 2020, plummeted by nearly 30% in a single day over concerns of the company's increasing likelihood to default on its repayments, Chinal Knowledge recounts. The company currently has more than 10 outstanding bond issuances with more than CNY14 billion worth of debt set to mature this year in the bond market, the report discloses. About China Minsheng China Minsheng Investment Group is a private equity firm. The firm seeks to invest in solar energy industry, manufacturing, sustainable energy, renewable energy, real estate, and business jet services. The firm seeks to invest in Europe and the United States. CHUYING AGRO-PASTORAL: Pig Breeder is Running Low on Pigs --------------------------------------------------------- Carrie Hong at Bloomberg News reports that the beleaguered Chinese company that made news last year paying its bond investors in ham instead of cash has a new problem: it's running low on pigs. The cash crunch that left Chuying Agro-Pastoral Group Co. unable to service some of its debt has now intensified to the point that it's unable to buy enough feed, Bloomberg relates citing an announcement on the Shenzhen Stock Exchange. The pork producer said that contributed to its pigs' death rate being higher than expected, Bloomberg relays. It's the latest twist for the small-cap company that's been challenged on multiple fronts, from the spread of African swine fever -- which has seen more than 900,000 hogs culled across the country -- to an economic slowdown to a deleveraging drive by policy makers that's tightened credit flows to weaker borrowers, Bloomberg states. Bloomberg relates that the Zhengzhou, central China-based company revised its 2018 performance forecast to a net loss of CNY2.9 billion (US$433 million) to CNY3.3 billion, wider than previously anticipated, it said in the statement on Jan. 30. More pain may be looming: Chuying Agro has CNY2.3 billion of bonds it needs to repay this year, according to data compiled by Bloomberg. A call to the company's securities department went unanswered, the report notes. According to Bloomberg, struggling Chinese firms have been getting innovative in their efforts to appease investors. A financing platform under HNA Group Co. offered investors air tickets rather than cash for debt repayment last year. In Chuying Agro's case, the company said in November that holders of CNY271 million of its debt agreed to take ham or pork gift packages instead of interest payments. Owen Gallimore, head of credit strategy from Australia & New Zealand Banking Group, quipped that "payment in kind becomes PIH (Pay In Ham)," Bloomberg relays. Based in Zhengzhou, China, Chuying Agro-Pastoral Group Co., Ltd., produces pork and poultry products. The Company provides pig breeding, slaughtering, frozen pork distribution, feed manufacturing, chicken egg supply, and cold chain logistics services. Chuying Agro-Pastoral Group also conducts grain products purchasing and warehousing businesses. GREENTOWN CHINA: Moody's Rates Proposed USD Perpetual Notes Ba3 --------------------------------------------------------------- Moody's Investors Service has assigned a Ba3 senior unsecured debt rating to the proposed USD senior perpetual capital securities to be issued by Champion Sincerity Holdings Limited and irrevocably and unconditionally guaranteed by Greentown China Holdings Limited. Greentown plans to use the proceeds of the new USD notes issuance to refinance existing indebtedness and for general working capital purposes. RATINGS RATIONALE "The proposed note issuance will not have a material impact on Greentown's credit metrics, because the proceeds will mainly be used to refinance existing debt," says Celine Yang, a Moody's Assistance Vice President and Analyst. Greentown's Ba3 corporate family rating continues to reflect its standalone credit strength and a two-notch rating uplift, based on Moody's expectation that the company will receive extraordinary financial support from China Communications Construction Group (Limited) (CCCG), its largest shareholder, in times of financial distress. Greentown's B2 standalone credit strength reflects its (1) well- established market position in property development in Hangzhou City and Zhejiang Province, (2) long operating track record, in particular, its established brand name, quality products and land bank with 70% of saleable value located in first and second tier cities, (3) improved financial management and access to funding as part of CCCG; and (4) adequate liquidity. However, the B2 standalone credit strength is constrained by its improving but still moderate financial metrics, as a result of debt-funded growth and operating challenges stemming from its growth through joint ventures and associates. The Ba3 rating for the notes reflects the following factors: (1) Moody's considers the proposed perpetual securities as pure debt instruments and accordingly, does not apply any equity treatment to these securities. (2) The perpetual securities will be irrevocably and unconditionally guaranteed by Greentown, which implies that the rating on the perpetual securities is closely linked to Greentown's rating. (3) The securities will rank pari passu with all other present and future senior obligations of Greentown. The positive ratings outlook reflects Moody's expectation that Greentown will maintain financial discipline, generate steady growth in contracted sales and control its debt growth, while pursuing an expansion strategy in the coming 12-18 months. Greentown's ratings could be upgraded if the company (1) continues to show prudence in its financial management and land acquisition strategy; and (2) improves its debt leverage, such that revenue/adjusted debt - including its share in joint ventures and associates - is maintained above 60%-70% and EBIT/interest - including shares in joint ventures and associates -- is maintained above 2.5x. A downgrade of Greentown's ratings is unlikely in the near term, given the positive ratings outlook. However, the outlook could return to stable, if the company's credit metrics are unlikely to improve to levels that will support an upgrade over the next 12-18 months. The principal methodology used in this rating was Homebuilding And Property Development Industry published in January 2018. Greentown China Holdings Limited is a major property developer in China, with a primary focus in Hangzhou City and Zhejiang Province. At June 30, 2018, the company had 106 projects with a total gross floor area of 32.97 million square meters (sqm), with 20.73 million sqm attributable to the company. JIANGSU NEWHEADLINE: Fitch Affirms and Then Withdraws BB IDR ------------------------------------------------------------ Fitch Ratings has affirmed Jiangsu NewHeadLine Development Group Co., Ltd.'s Long-Term Foreign- and Local-Currency Issuer Default Ratings at 'BB'. The Outlook is Stable. Fitch has also chosen to withdraw the ratings for commercial reasons. Jiangsu NHL is a wholly state-owned entity responsible for infrastructure development in the Lianyungang Economic and Technological Development Zone (ETDZ) and Lianyungang Municipality's eastern urban area. Lianyungang is a city in Jiangsu province, which sits on China's eastern coast. KEY RATING DRIVERS 'Strong' Status, Ownership and Control: Jiangsu NHL is ultimately wholly owned by the Lianyungang municipal government. The municipal government delegates the supervision of Jiangsu NHL to the Management Committee of Lianyungang ETDZ. Jiangsu NHL is registered as a wholly state-owned limited liability company under China's Company Law. Under the company's current legal status, its major decisions (such as mergers and acquisitions, spin-offs, bankruptcy and liquidation) require approval from Lianyungang municipality. The full ownership and tight control by the government is offset by the government's delegation of the company's management to the Lianyungang ETDZ. 'Strong' Support Track Record and Expectations: Jiangsu NHL's main customer is Lianyungang ETDZ Management Committee, which accounted for 84% of turnover for 2017 (2016: 95%). According to Jiangsu NHL, Liangyungang ETDZ is committed to provide at least CNY400 million in subsidies each year from 2016 to 2020 to support the entity's operations. For 2015, 2016, 2017 and 1Q18, NHL received subsidies of CNY585 million, CNY659 million, CNY519 million and CNY79 million, respectively. Jiangsu NHL usually needs to raise debt and pay for expenses related to construction in advance, thus the consistent financial support from the government is vital to its operation. In addition, receivables of more than CNY22 billion were due from the government (more than half of the total assets) at end-2017. Fitch assesses the support record and expectation attribute as 'Strong' as the regular financial support is offset by a lack of a debt guarantee. 'Moderate' Socio-Political Implications of Default: Jiangsu NHL is an important entity for developing large urban infrastructure projects and providing ancillary services in Lianyungang ETDZ. It helps to implement the development plan of Lianyungang municipality and Lianyungang ETDZ's management committee. Nonetheless, if Jiangsu NHL were to default, the government would be able to continue maintenance of existing infrastructure with limited or temporary disruption, given the availability of substitutes. 'Strong' Financial Implications of Default: Jiangsu NHL has a large amount of receivables due from Lianyungang ETDZ and its finance bureau. A default by the company would hint at the government's difficulty in providing timely support even if it were willing to do so. A default by Jiangsu NHL is likely to have a significant impact on the availability and cost of both domestic and foreign financing option for the Liangyungang municipal government and/or its government-related entities. 'B' Category Standalone Credit Profile: Jiangsu NHL's revenue mainly comes from the Lianyungang ETDZ Management Committee, but the company has limited or no price-setting power, resulting in the Revenue Defensibility attribute being assessed at 'Mid-Range'. Fitch considers operating risk as 'Weak' as the timing of material capital expenditure is usually directed by the government. Fitch also assesses the financial profile as 'Weak' due to the persistent negative operating cash flow and high total debt-to- adjusted EBITDA ratio of more than 20x. Overall, the issuer's standalone credit profile is in the 'B' rating category at best. RATING SENSITIVITIES No longer relevant as the ratings have been withdrawn. YANZHOU COAL: Fitch Raises LT IDR to BB-, Outlook Stable -------------------------------------------------------- Fitch Ratings has upgraded China-based Yanzhou Coal Mining Company Limited's Long-Term Foreign-Currency Issuer Default Rating to 'BB- ' from 'B+'. The Outlook is Stable. Fitch has also upgraded Yanzhou Coal's senior unsecured rating to 'BB-' from 'B+'/'RR4'. The upgrade was driven by improvement in the consolidated credit profile of Yanzhou's immediate parent, Yankuang Group., Ltd., as its Fitch-defined cash flow from operations (CFO) has turned positive since 2017 and its FFO adjusted net leverage has declined. Fitch has assessed Yankuang Group's consolidated credit profile using a bottom-up approach from its standalone credit profile that reflects potential support from its ultimate parent, Shandong State-owned Assets Supervision and Administration Commission (SASAC), as per Fitch's Government-Related Entities Rating Criteria. Yanzhou's rating is aligned with the consolidated credit profile of Yankuang Group as Fitch has assessed that the linkage between the two entities is strong, underpinned by their solid operational ties, as per the agency's Parent and Subsidiary Rating Linkage criteria. KEY RATING DRIVERS Parent's Strong State Linkage: Yankuang Group's relationship with Shandong SASAC is reflected in its position as one of the Chinese province's two key provincial coal suppliers, the second-largest employer and fourth-largest domestic bond issuer. Fitch assesses Yankuang Group's status, ownership and control as 'Strong'. Yankuang Group is 70%-owned by Shandong SASAC, while Shandong Guohui Investment Co., Ltd and Shandong Provincial Council for Social Security Fund together own the remaining 30%. The Shandong provincial government effectively controls Yankuang Group's board and key senior management and has a strong influence over the group's major strategies and investment decisions. Fitch assesses Yankuang Group's track record and expectation of support as 'Moderate' as tangible government support has been limited. Support mainly included annual subsidies of CNY200 million-400 million and zero-cost land injections, with the group's financial profile kept at persistently weak levels. Strong Financial Impact of Default: Fitch assesses the socio- political implications from a default as weak because most of Shandong's coal demand is met by supply from other provinces; around two-thirds of Yankuang Group's coal capacity is outside Shandong. The financial implications from a default are assessed as 'Strong' due to Yankuang Group's status as one of the province's biggest state-owned entities (SOE) and its fourth- largest domestic bond issuer. Strong Parent-Subsidiary Linkage: Yanzhou is 51.81%-owned by Yankuang Group and holds most of the group's high-quality assets as its sole listing platform. Yanzhou contributed 59% of the group's coal production and around 74% of its EBITDA in 2017. Operational ties are significant, reflected in a high degree of overlap in key board members and management between the two entities. The group centralises treasury functions within a finance company, which is 90%-owned by Yanzhou. Upgrade in Yankuang's Standalone Assessment: Yankuang's CFO recovered to CNY4.8 billion in 2017, boosted by strong coal and methanol prices, and climbed higher in 9M18 after staying negative for many years. Fitch expects Yankuang's FFO adjusted net leverage to improve to 7.4x-8.5x in 2018-2020, from 11.3x at end-2016, making its financial metrics more in line with other Fitch-rated Chinese state-owned commodity companies with standalone credit profiles in the 'B' category. Yankuang's standalone credit profile is supported by its large scale, geographical diversification of production, long reserve life and cost position while constrained by leverage that is still considered high. Financial Improvement: Yanzhou's free cash flow improved to CNY2.6 billion in 2017 and Fitch estimates it stayed positive in 2018. Fitch expects that to continue in the following years based on its assumptions of coal prices in line with the government-set range, larger methanol capacities and lower capex. The company reduced its FFO adjusted net leverage to 4.4x by end-2017 and Fitch expects the leverage metric to stay around 4.0x in 2019-2021. Fitch thinks disciplined capex and acquisition may be the key for further deleveraging. Fitch has also upgraded Yanzhou's standalone credit profile to 'BB-' from 'B+'. Margin Expansion on Higher ASP: The average selling price (ASP) of coal produced by Yanzhou rose 9.5% to CNY541/tonne in 9M18 from 2017. The unit cost of Yanzhou's coal-mining segment rose 3.1% in 1H18 to CNY264/tonne from 2017, which Fitch considers reasonable as some costs were related to the higher coal price. Fitch estimates Yanzhou's dollar margin, or its gross profit per tonne of coal, rose in 2018 although it may drop in 2019-2021 as medium- term coal prices are likely to fall into the CNY500/tonne- 570/tonne range set by the National Development and Reform Commission. Fitch expects China's tight coal supply to ease in 2019 on its assumption of declining coal demand. The impact of demolishing obsolete capacities on coal supply may not be as strong in 2019- 2020 as it was in 2016-2018 as most of the capacity reduction targets for China's 13th Five-Year Plan (2016-2020) have been met. Capex Likely to Have Plateaued: Fitch believes capex of both Yanzhou and its parent peaked in 2018 as most of the major green- field mines under construction in previous years have been completed. Fitch also expects the two second-phase methanol projects in Yulin and Ordos to be completed in the first half of this year. The annual capex of Yanzhou may fall to CNY6.0 billion- 7.0 billion in the coming years, provided there are no large new coal mines in the pipeline. Fitch thinks the company is also taking a more cautious stance in its financial-segment investments, evident from the lower cash outflow on acquisitions in 9M18. DERIVATION SUMMARY Yanzhou's rating is equalised with the consolidated credit profile of Yankuang Group based on the strong linkage between the two entities as per Fitch's Parent and Subsidiary Rating Linkage criteria. Yankuang Group's consolidated credit profile incorporates an uplift based on Fitch's Government-Related Entities Rating Criteria. Shandong SASAC owns 70% and effectively controls Yankuang Group, which is one of the province's key SOEs as well as one of its largest employers and domestic bond issuers. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - QHD 5500Kcal coal price to average CNY570 per tonne in 2019, CNY550/tonne in 2020 and CNY540/tonne in 2021 - Unit coal production cost increased by 3.6% in 2018 and remaining flat thereafter - Capex averaging CNY7.5 billion in 2018-2021 and following a downward trend RATING SENSITIVITIES Developments that May, Individually or Collectively, Lead to Positive Rating Action - Stronger likelihood of support from Shandong province to Yankuang Group - FFO adjusted net leverage of Yankuang Group to stay below 6x on a sustained basis Developments that May, Individually or Collectively, Lead to Negative Rating Action - Cash flow from operations of Yankuang Group turning negative Sensitivities for Yanzhou's standalone credit profile of 'BB-': Developments that May, Individually or Collectively, Lead to Positive Rating Action - FFO adjusted net leverage below 3.5x on a sustained basis (end-2017: 4.4x) Developments that May, Individually or Collectively, Lead to Negative Rating Action - FFO adjusted net leverage above 4.5x for a sustained period LIQUIDITY Sufficient Liquidity: Yanzhou's readily available cash rose to CNY23.7 billion by end-1H18 (end-2017: CNY21.1 billion), almost enough to cover its debt maturing within one year of CNY26.7 billion (end-2017: CNY27.8 billion). Yanzhou also had total undrawn bank credit facilities of CNY46.2 billion as of 1H18. Fitch expects the company to continue to benefit from strong access to domestic funding sources due to its large SOE status. FFO fixed-charge coverage improved to 4.2x in 2017 (2016: 2.3x) as a result of stronger cash flow from a recovery in coal prices. ========= I N D I A ========= A-1 COLD: CARE Migrates B+ Rating to Not Cooperating Category ------------------------------------------------------------- CARE Ratings has migrated the rating on bank facilities of A-1 Cold Storage Private Limited to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 5.55 CARE B+; Stable Issuer not Facilities cooperating; based on best available information CARE has been seeking information from A-1 Cold to monitor the rating vide e-mail communications/letters dated December 24, 2018 December 26, 2018, December 27, 2018 and numerous phone calls. However, despite CARE's repeated requests, the firm has not provided the requisite information for monitoring the rating. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of best available information which however, in CARE's opinion is not sufficient to arrive at fair rating. The rating on A-1 Cold Storage Private limited's bank facilities will now be denoted as CARE B+; Stable; 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. Detailed Description of Key Rating Drivers At the time of last rating on December 15, 2017, the following were the rating strengths and weaknesses: Key Rating Weakness Short track record of the company: The company was incorporated in the year 2015 and started its project activities in 2017. The company is in the initial stages of operations and is expecting to complete its ongoing project in November 2018 and start commercial operations from December 2018. The level of project execution and operations by the management of the company is yet to be seen. Project implementation risk and stabilization of operations: The directors of the company are setting up the cold storage with a total estimated cost of the project is INR8.92 crore which is to be funded through a bank term loan of INR5.55 crore and rest of the INR3.37 crore from promoter's fund. Till date, the company has incurred INR0.77 crore for land registration and development purpose. The commercial operations of the company are expected to start from December 2018. Key Rating Strengths Experience of the promoters for more than two decade in agricultural industry: ACSPL is promoted by Mrs. Duvvuru Varija (Managing Director) and Mrs. Bollu Hymavathi (Director). The directors are well qualified wherein Mrs. Duvvuru Varija, aged 67, is a post graduate, having experience of 24 years in agricultural business. The company is likely to get benefited by its qualified and experienced promoters. Location advantage of the plant: The plant location of the company is located in horticultural crops growing area and having good network with farmers and growers. There is abundant availability of raw materials such as chillies, mango, tamarind etc. in the proposed area of the district. Stable outlook of cold chain industry: Growing annually at 28%, the total value of cold chain industry in India is expected to grow going forward driven by increased investments, modernization of existing facilities, and establishment of new ventures via private and government partnerships. India's cold chain industry is still evolving, not well organized and operating below capacity. The Indian cold chain market is highly fragmented with more than 3,500 companies in the whole value system. Organized players contribute only ~8%-10% of the cold chain industry market. Cold stores are the major revenue contributors of the Indian Cold Chain industry and are majorly used for storing potatoes. However, the market is gradually getting organized and focus towards multipurpose cold storages is rising. A1 Cold Storage Private Limited (ACSPL) was incorporated in the year 2015 with its registered office at Somajiguda, Hyderabad. The promoters of the company are Mrs. Duvvuru Varija (Managing Director) and Mrs. Bollu Hymavathi (Director). Both the directors have experience for more than two decades in agricultural business. Presently, the company is establishing a cold storage plant at Jadcherla village, Mahabubnagar District, Telangana with the total project cost of INR8.92 crore which is to be funded through a bank term loan of INR5.55 crore and balance of INR3.37 crore from promoter's fund. Till date, the company has incurred INR0.77 crore for land registration and development purpose. ACSPL is planning to start its commercial operations from December 2018. The company is expected to preserve fruits, vegetables and other agricultural products like seeds post completion of cold storage plant. ADHUNIK INDUSTRIES: Ind-Ra Raises Long Term Issuer Rating to BB --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has upgraded Adhunik Industries Limited's (AIL) Long-Term Issuer Rating to 'IND BB' from 'IND B-'. The Outlook is Stable. The instrument-wise rating actions are: -- INR873 mil. (reduced from INR893 mil.) Fund-based limits upgraded with IND BB/Stable rating; and -- INR516.5 mil. (reduced from INR546.5 mil.) Non-fund-based limits upgraded with IND A4+ rating. KEY RATING DRIVERS The upgrade reflects an improvement in AIL's revenue along with a slight improvement in its credit metrics. However, the scale of operations remains medium, while metrics continue to be at moderate levels because of modest and volatile operating margins. This is due to competition and price fluctuations in input and realization of finished goods. AIL's revenue grew 28.4% yoy to INR4,807 million in FY18, on account of an increase in sales volume to 184,579mt (FY17: 132,204mt). The company's production volume increased to 178,881mt in FY18 (FY17: 142,098mt), with capacity utilization improving to 105.2% (83.6%). Net leverage (adjusted net debt/operating EBITDAR) was 2.78x in FY18 (FY17: 3.8x) and interest coverage was 1.66x (1.4x). The slight improvement was due to an increase in absolute EBITDA to INR250.98 million in FY18 (FY17: INR233 million) and a reduction in debt level to INR724.90 million (INR901 million), led by scheduled debt repayments and lower working capital requirements. EBITDA margin fell to 5.22% in FY18 (FY17: 6.23%; FY16: 6.63% ; FY15: 9.37%), because of an increase in raw material and manufacturing expenses. The ratings factor in AIL's moderate working capital cycle and liquidity position. The net working capital cycle shortened to 87 days in FY18 (FY17: 110 days), on account of better management of working capital needs. AIL procures raw material (MS billet) from its group company Adhunik Corporation Ltd d as well as other local suppliers and offers a credit period in the range of 50-65 days to its customers. The cash flow from operation turned positive in FY18 to INR189.76 million (FY17: negative INR172 million) on account of the increase in absolute EBITDA and efficient working capital management. The working capital limits were utilized at an average maximum of 70.2% over the 12 months ended December 2018. RATING SENSITIVITIES Positive: Sustained growth in the revenue as well as margins leading to improved credit metrics will be positive for the ratings. Negative: Sustained deterioration in the credit profile will be negative for the ratings. COMPANY PROFILE Kolkata-based company, AIL manufactures rolled products mainly TMT bars, rounds and wire rods at its plant located in Durgapur, West Bengal. In 1HFY19, AIL's revenue were INR3219.24 million and EBITDA was INR116.60 million. AGRAWAL STRUCTURE: Ind-Ra Moves BB LT Rating to Non-Cooperating --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Agrawal Structure Mills Private Limited'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 BB (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR200 mil. Fund-based working capital limits migrated to non-cooperating category with IND BB (ISSUER NOT COOPERATING) rating; and -- INR100 mil. Non-fund-based working capital limits migrated to non-cooperating category with IND A4+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on February 2, 2018. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Agrawal Structure Mills was incorporated in November 1995 as a private limited company. It is engaged in the manufacturing and trading of mild steel billets and steel structural in Urla Industrial Area, Raipur. AISHWARYA IMPEX: Ind-Ra Migrates BB- LT Rating to Non-Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Aishwarya Impex'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 BB- (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR150 mil. Fund-based working capital limit migrated to non- cooperating category with IND BB- (ISSUER NOT COOPERATING) / IND A4+ (ISSUER NOT COOPERATING) rating; and -- INR58.5 mil. Term loan limit due on March 2024 migrated to non-cooperating category with IND BB- (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on January 25, 2018. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Formed in 2011, Aishwarya Impex initially provided cold storage rental services. It ventured into the trading of prawns in January 2015 and the processing of shrimps in FY18. BLUE AUTOWORLD: CARE Assigns B+ Issuer Rating; Outlook Stable ------------------------------------------------------------- CARE Ratings has assigned CARE B+ (Is) issuer rating to Blue Autoworld Private Limited (BAPL). Outlook is stable. The issuer rating is subject to the BAPL maintaining overall gearing of 1x as on March 31, 2018. Detailed description of the key rating drivers The ratings assigned to the bank facilities of Blue Autoworld Private Limited (BAPL) is constrained by small scale of operation, moderate financial risk profile, thin profitability margin due to trading nature of business, dependence on fortunes of TVS Motor Company Limited with low bargaining power, working capital intensive nature of operation and presence in intensely competitive industry. The ratings however, draws comfort from experienced promoter, exclusive authorized dealer of TVS Motor Company Limited and improvement in financial performance during FY16 (refers to period from April 1 to March 31) to FY18. Going forward the ability of the company to increase scale of operation, improve profitability margin and efficient management of working capital will remain the key rating sensitivities. Key Rating Weakness Small scale of operation: The overall scale of operation of BAPL continued to remain at low marked by total operating income of INR33.31 crore. BAPL is a relatively small player in sale, service and spares supply of two wheelers with total capital employed of INR9.94 crore as on March 31, 2018 (as against INR7.19 crore in FY16). The small size of the company restricts the financial flexibility in times of stress. Moderate financial risk profile: The capital structure of the company remained moderate marked by Overall gearing and total debt/ GCA of 0.55x and 11.63x respectively as on March 31, 2018 as against 0.28x and 12.03x respectively as on March 31, 2016. Working capital intensive nature of operations and tight liquidity position: BAPL receives inventory against immediate payments to the principal. The dealers are required to hold an inventory of around a month and the sales proceeds are collected within a week as part of the customers are retail clients who opt for vehicle financing. The working capital requirement of the company is mainly funded through bank borrowings. Dependency on fortunes of principal with low bargaining power: Dealers lack bargaining power due to its dependence on such large principal that set policies, targets and link incentive based income to satisfactory compliance of such policies and the financial risk profile of the company has a high degree of correlation with the performance of OEM's vehicles in the market and their ability to launch new products. Presence in an intensely competitive industry: The automobiles industry is very competitive on the back of the presence of a large numbers of players dealing with similar products. Moreover, in order to capture the market share, the auto dealers offer better buying terms like providing credit period or allowing discounts on the purchase. Such discounts offered to the customers create a margin pressure and negatively impact the earning capacity of the company. Key Rating Strengths Experienced promoters: BAPL was promoted by Malda based Mr. Panchanan Misra in 2010. Mr. Panchanan Misra has around a decade of experience in retailing of two wheeler and its spares spares. The day to day affairs of the company is looked after by Mr. Panchanan Misra along with the support from a team of experienced professional. Exclusive authorised dealer of TVS Motor Company: BAPL is associated with TVS Motor Company Limited (TVS) since 2011 as a 3S authorized dealer for entire Malda region in West Bengal. TVS is one of the leading players in two wheelers automobile segment. Currently, BAPL operates 8 showrooms spread across Malda region in West Bengal. BAPL has also appointed 8 sub-dealers under it. The segment wise revenue break up is provided below. Renewable based dealership agreements: The dealership agreement between BAPL and TVS is valid for one year, thereafter subject to automatic renewal for one year. The latest agreement is renewed on July 25, 2018 which is valid for a period of one year from October 1, 2018 to September 30, 2019. However, the agreements have been renewed regularly in the past since 2011. Improvement in financial performance during FY16 to FY18: The total operating income of BAPL grew at a CAGR of 23.67% to INR33.31 crore in FY18 as against INR21.78 crore in FY16. PBILDT margin improved from 1.35% in FY16 to 2.49% in FY18. On absolute basis the company reported PBILDT of INR0.83 crore in FY18 as against INR0.29 crore in FY16. Interest coverage deteriorated from 2.50x in FY16 to 1.83x in FY18. The company earned GCA of INR0.30 crore in FY18 as against nil term debt repayment. Liquidity The liquidity position of the company continued to remain tight as evident from the average utilization of its fund based working capital limit at approx.. 97% during the past twelve months ending December 2018. BAPL had free cash and bank balance of INR0.31 crore as on March 31, 2018. Current ratio of BAPL was comfortable at 1.74x as on March 31, 2018. CARE TECH: Ind-Ra Gives B+/A4 Ratings to INR20MM Loan ----------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned CARE TECH (CT) a Long-term Issuer Rating of 'IND B+'. The Outlook is Stable. The instrument-wise rating actions are: -- INR20 mil. Fund-based working capital limits assigned with IND B+/ Stable/IND A4 rating; -- INR5 mil. Non-fund-based working capital limits assigned with IND A4 rating; -- INR26.8 mil. Term loan due on March 2028 assigned with IND B+/Stable rating; -- INR35 mil. Proposed term loan* assigned with Provisional IND B+/Stable rating; and -- INR30 mil. Proposed fund-based working capital limits* assigned with Provisional IND B+/Stable/Provisional IND A4 rating. *The ratings are provisional and shall be confirmed upon the sanction and execution of loan documents for the above facilities by CT to the satisfaction of Ind-Ra. KEY RATING DRIVERS The ratings reflect CT's modest scale of operations. The revenue increased to INR88.4 million in FY18 (FY17: INR34.9 million), mainly due to higher sales of manufactured precision machinery components to its biggest client - Wipro Enterprises Limited. The firm has indicated revenue of INR150 million in 8MFY19. The return on capital employed was 18% in FY18 (FY17: 14%) and the EBITDA margin fell to an average 16.3% (26.6%), on account of a decline in job work from Wipro Enterprises. The ratings also factor in CT's moderate credit profile. The net leverage improved to 3.9x in FY18 (FY17: 4.7x) and interest coverage (operating EBITDA/gross interest expense) improved to 2.3x (1.9x). Despite the decline in the EBITDA margin, the credit metrics improved because of the rise in absolute EBITDA owing to the increase in scale of operations. In addition, the ratings reflect the firm's tight liquidity position. Its peak utilization of the working capital limits was around 96% during the 12 months ended December 2018. Furthermore, the net working capital cycle of the firm lengthened to 81 days in FY18 (FY17: 49 days) as debtor days increased to 111 days (87 days). The firm had modest unrestricted cash balance of INR0.2 million as on 31 March 2018 (INR0.1 million as on March 31, 2017). Its cash flow from operations stood at a negative INR6.3 million in FY18 (FY17: INR10.0 million). Moreover, the firm is exposed to customer concentration risk, as a majority of the revenue is derived from Wipro Enterprises. The ratings also reflect the partnership nature of the firm. The ratings, however, are supported by the partners' experience of around two decades in the manufacturing of precision machinery components, which has enabled the company to establish strong relationships with customers and suppliers. RATING SENSITIVITIES Negative: A decline in the scale of operations and/or absolute EBITDA, leading to deterioration in the credit metrics, all on a sustained basis, will be negative for the ratings. Positive: A substantial increase in the scale of operations with improvement in the absolute EBITDA, leading to an improvement in credit metrics, all on a sustained basis, will lead to a positive rating action. COMPANY PROFILE Established in 2010, CT manufactures precision machinery components for hydraulic machineries. CHABBRA'S ASSOCIATES: Ind-Ra Affirms BB on INR200MM Loan -------------------------------------------------------- India Ratings and Research (Ind-Ra) has revised Chabbra's Associates' (CA) Outlook to Positive from Stable while affirming its Long-Term Issuer Rating at 'IND BB'. The instrument-wise rating actions are: -- INR200 mil. (increased from INR135 mil.) Fund-based limits affirmed; Outlook revised to Positive from Stable with IND BB/Positive rating; and -- INR385.0 mil. (increased from INR200 mil.) Non-fund-based limits affirmed with IND A4+ rating. KEY RATING DRIVERS The Outlook revision reflects Ind-Ra's expectations of a substantial improvement in CA's revenue in FY19 and beyond. The agency's forecast is based on an unexecuted order book of INR6,820.6 million (8.9x of FY18 revenue) as on October 31, 2018, which provides strong revenue visibility for the medium term, along with revenue from toll plaza collection, which commenced from June 2018. In FY18, revenue grew 70.5% yoy to INR770.3 million due to the timely and high execution of work orders. CA has indicated revenue of INR867.31 million in 8MFY19. However, the scale of operations remains medium. Also, CA faces customer concentration risk, as outstanding orders from Greater Hyderabad Municipal Corporation account for 40% (INR2,701 million) of the total unexecuted order book. The ratings also reflect the moderate geographical concentration risk, given that CA's projects are based in Andhra Pradesh, Telangana and Jharkhand, and the partnership nature of the firm. The ratings continue to be supported by CA's strong credit metrics because of healthy EBITDA margins. In FY18, gross interest coverage (operating EBITDAR/gross interest expense) improved to 4.2x in FY18 (FY17: 2.4x), owing to a fall in gross interest expense and growth in absolute EBITDA due to the substantial increase in the scale of operations. The net financial leverage (total adjusted net debt/operating EBITDAR) deteriorated marginally to 1.1x in FY18 (FY17: 0.6x), due to an increase in the utilization of short-term fund-based limits at the year end. The company's RoCE was 17.3% in FY18 (FY17: 16.2%) and the EBITDA margin stood at 8.3% (12%). The margin declined in FY18 on account of an increase in sub-contract expenses. The ratings also factor in CA's comfortable liquidity. The average maximum fund-based limit utilization has been around 66% over the 12 months ended December 2018. The cash flow from operations turned positive to INR9.0 million (FY17: negative INR32.9 million) as on March 31, 2018 because of an improvement in the net working capital cycle. The net cash conversion cycle improved to 90 days in FY18 (FY17: 109 days) due to an improvement in the inventory holding period. The unrestricted cash balance stood at INR0.9 million in FY18 (FY17: INR0.7 million). The company does not have any major term debt obligations and capex would largely be funded through internal accruals over the medium term. Additionally, the promoters have experience of over two decades in civil construction (buildings and roads). RATING SENSITIVITIES Negative: A decline in the scale of operations and/or operating profitability, leading to deterioration in the credit metrics and liquidity, could cause the Outlook to be revised to Stable. Positive: A substantial increase in the revenue, along with an improvement in the credit metrics, all on sustained basis, could be positive for the ratings. COMPANY PROFILE Established in February 1997, CA is a partnership firm based in Secunderabad, Hyderabad. The firm is primarily involved in civil construction. It also operates a toll plaza. It is promoted by Mr. Suresh Kumar Chabbra, Mr. Ramesh Kumar Chabbra and Mrs. Vidya Devi Chabbra. CHANDRA HASNI: Ind-Ra Gives B+ Ratings to INR150MM Loans -------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Chandra Hasni Ispat Private Limited (CIPL) a Long-Term Issuer Rating of 'IND B+'. The Outlook is Stable. The instrument-wise rating actions are: -- INR80 mil. Fund-based working capital limit assigned with IND B+/Stable rating; and -- INR70 mil. Term loan due on April 2025 assigned with IND B+/Stable rating. KEY RATING DRIVERS The ratings reflect CIPL's small scale of operations as reflected by revenue of INR87 million in FY18 (FY17: INR68.80 million). The increase in revenue was on account of an increase in sale of mild steel pipes and strips. The company's return on capital employed was 1% in FY18 and operating margin was modest at around 2.17% (FY17: 2.03%). However, the ratings are supported by CIPL's strong credit metrics as indicated by high interest coverage (operating EBITDA/gross interest expense) of 8.95x in FY18 (FY17: 9.33x). The company was net debt negative in FY17-FY18 due to the absence of external borrowings. However, Ind-Ra expects the credit metrics to deteriorate marginally owing to the company's upcoming debt-funded capex plan. The ratings further derive support from the directors' more than one decade of experience in the iron and steel industry. RATING SENSITIVITIES Negative: Decline in the revenue leading to deterioration in the credit metrics, all on a sustained basis, will be negative for the ratings. Positive: A sustained improvement in the revenue will be positive for the ratings. COMPANY PROFILE Incorporated in 2005, CIPL manufactures thermo-mechanically treated bars. The company is setting up a rolling mill with installed capacity of 1,00,000mtpa and an induction furnace plant with a capacity of 60,000MTPA. CLUB 29: CARE Migrates 'D' Rating to Not Cooperating Category ------------------------------------------------------------- CARE Ratings has migrated the rating on bank facilities of Club 29 Private Limited (CPL) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 12.13 CARE D, Issuer Not Cooperating; Facilities Based on best available Information Short term Bank 0.75 CARE D, Issuer Not Cooperating; Facilities Based on best available Information CARE has been seeking information from CPL to monitor the ratings vide e-mail communications/letters dated October 4, 2018, December 18, 2018, January 2, 2019 and January 4, 2019 and numerous phone calls. However, despite CARE's repeated requests, the firm 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 best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The rating on CPL's bank facility 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 ratings. The ratings take into account the continuous delays in debt servicing obligations. Detailed description of the key rating drivers At the time of last rating on April 5, 2018, the following were the rating strengths and weaknesses. Key Rating Weaknesses Delay in debt servicing obligations: There have been continuous delays in debt servicing obligations. The delays were on account of weak liquidity position. CPL incorporated in January 2012, is a Mont Vert Group venture based out of Wakad, Pune and is focused on providing a recreational indoor centre. Club29 is a recreational facility that provides facilities such as restaurant banquets halls, gymnasium facility, sports lounge consisting of badminton court, squash court, Table-Tennis tables, swimming pool, bowling alley, billiards tables and fuzz ball tables etc. D.P. GARG: Ind-Ra Withdraws B+ LT Issuer Rating on INR115MM Loan ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has maintained D.P. Garg Exports (Pvt.) Ltd.'s Long-Term Issuer Rating in the non- cooperating category and has simultaneously withdrawn the rating. The instrument-wise rating actions are: -- The IND B+ on the INR115.00 mil. Fund-based working capital limits* maintained in Non-Cooperating Category and withdrawn; and -- The IND A4 rating on the INR5.00 mil. Non-fund-based limits# maintained in Non-Cooperating Category and withdrawn. * Maintained in 'IND B+ (ISSUER NOT COOPERATING)' / 'IND A4 (ISSUER NOT COOPERATING)' before being withdrawn # Maintained in 'IND A4 (ISSUER NOT COOPERATING)' before being withdrawn KEY RATING DRIVERS D.P. Garg Exports did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Ind-Ra is no longer required to maintain the rating as the agency has received a no-objection certificate from the rated facility's lender. COMPANY PROFILE Established in 1998 and promoted by BM Garg, D.P. Garg Exports manufactures and exports hinges and ironmongery at its facility in Noida. DHARTI DREDGING: CARE Migrates D Rating to Not Cooperating ---------------------------------------------------------- CARE Ratings has migrated the rating on bank facilities of Dharti Dredging and Infrastructure Ltd (DDIL) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 79.96 CARE D; Issuer not cooperating; Facilities Based on best available Information Long-term/Short- 208.00 CARE D; Issuer not cooperating; Term Bank Based on best available Facilities Information CARE has been seeking information from DDIL to monitor the rating vide e-mail communications/letters from August 22, 2018 to January 9, 2019 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 best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The rating on Dharti Dredging and Infrastructure Ltd.'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 ratings assigned to the bank facilities of Dharti Dredging and Infrastructure Ltd (DDIL), takes into account delays in servicing of debt obligation owing to stretched liquidity position of the company led by delay in realization of receivables. Detailed description of the key rating drivers At the time of last rating on November 24, 2017, the following were the rating strengths and weaknesses: Key Rating Weaknesses Stretched liquidity position with delay in debt servicing: DDIL had been experiencing stretched collection period in the last three years led by significant delay in receipt of payments from its clients. The average collection period has elongated to 311 days during FY17. Consequently, due to the inability of the company to realize its receivables in a timely manner, there have been delays in servicing the debt obligations. Deterioration of capital structure and weak debt coverage indicators: Overall gearing of the company has weakened from 0.92x as on March 31, 2016 to 1.06x as on March 31, 2017, due to the additional loan availed by the company. Furthermore, in view of high debt outstanding and lower gross cash accruals, total debt to gross cash accruals (TDGCA) have also deteriorated from 4.82x during FY16 to 6.96x during FY17. Key Rating Strengths Experienced promoter with long track record: The promoter; Mr. A. Rajendra (Chairman and Managing Director) has long standing experience of 20 years in the industry and looks after day to day activities of the company. Under his leadership, the company has, over the years, diversified into trenching and back-filling works for the oil and gas industry for domestic as well as international clients. Improved margins at operating level albeit stable operating income: Total operating income of the company remained stable at INR249.25 crore, (marginal growth of 1.40%) during FY17 against INR245.80 crore during FY16. Even though, the PBILDT margin improved by 255 bps, PAT margin came down by 329 to 1.72% during FY17 (against 5.01% during FY16) on account of higher interest expenses. Incorporated in 1993, Dharti Dredging and Infrastructure Ltd (DDIL) is a Hyderabad-based company engaged in the work of dredging, mainly capital dredging. In addition to dredging activities, the company also undertakes trenching and back filling works related to offshore pipeline installation, road embankment projects, de-weeding of lakes, land reclamation etc. DDIL has executed dredging projects in India, the Middle East, Myanmar and Indonesia. DDIL commenced its operations with one dredging unit at Paradeep Fishing Harbor in 1993. Over the years, it has executed various dredging projects and post amalgamation with MDPL (Marine Dredging Pvt. Ltd) DDIL owns a fleet of 16 dredgers (mostly cutter suction dredgers). DOLPHIN OFFSHORE: CARE Assigns C Rating to INR25.50cr LT Loan ------------------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of Dolphin Offshore Enterprises India Limited (DOEIL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term fund based bank facilities 25.50 CARE C; Stable Assigned Short term non- fund based bank facilities 61.75 CARE A4 Assigned Short term fund based bank facilities- overdraft 14.00 CARE A4 Assigned Fixed Deposit Programme 5.00 CARE C (FD); Stable Assigned Detailed rating rationale & key rating drivers The ratings assigned to the bank facilities of DOEIL are constrained by stretched liquidity position due to long operating cycle, weak operating performance, predominance of a single customer, exposure to weak subsidiaries along with intense competition from larger players in the offshore segment. The ratings however derive strength from the vast experience of the promoters in the industry and track record in execution of offshore projects. The ability of DOEIL to efficiently manage the liquidity more efficiently and carry out timely servicing of debt shall be the key sensitivities. Detailed description of key rating drivers Key Rating Weaknesses Weak operating performance: DOEIL has been incurring losses (both on standalone & consolidated basis) continuously since the last 5 financial years ending March 31, 2018. The revenues and profits of the company continued to decline due to its limitations to procure orders amidst stiff competition from the international players. Exposure to weak subsidiaries which are also facing challenges: DOEIL has two wholly-owned subsidiaries; DOEIL has two wholly owned subsidiaries Dolphin Offshore Shipping Ltd (DOSL) and Dolphin Offshore Enterprises (Mauritius) Private Limited (DOEML). Both the companies are into ship owning and chartering activity. The subsidiaries have required regular financial support in the form of loans/ guarantees from parent in order to carry out its operations. DOEML is also involved in legal dispute with one of the overseas charter customers who have filed for bankruptcy. Predominance of a single customer: Fortunes of the company are largely dependent on its major customer ONGC from where it derives more than 95% of its total income. Key Rating Strengths Experienced management and diverse range of services offered: The management of DOEIL has more than 30 years of experience in the offshore industry. Over the years, the management has diversified the profile of the company from providing diving services to the underwater engineering services, vessel management, vessel repairs and EPC contracting. Mr. Satpal Singh (MD & CEO) is a Civil Engineer, specializing in the design of offshore structures and has an experience of over 30 years. Mr. Navpreet Singh, (Joint Managing Director & CFO) is a Chartered Accountant by qualification and has over 30 years of experience. Liquidity Analysis Weak liquidity position: The operating cycle of DOEIL increased from around 338 days in FY17 to 437 days in FY18. This was mainly because a large amount of the funds were blocked in the debtors some of which are outstanding for a long period. This has resulted in intense pressure on existing bank limits. Dolphin Offshore Enterprises (India) Ltd. (DOEIL) is the flagship company of the Dolphin Group and is listed on BSE and NSE. It is in the business of providing a complete range of offshore support services to the oil and gas industry. ENCORP POWERTRANS: Ind-Ra Affirms BB+ on INR240MM Capital Limits ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed Encorp Powertrans Private Limited's (EPPL) Long-Term Issuer Rating at 'IND BB+'. The Outlook is Stable. The instrument-wise rating actions are: -- INR240 mil. Fund-based working capital limits affirmed with IND BB+/Stable/IND A4+ rating; and -- INR310 mil. Non-fund-based working capital limits affirmed with IND A4+ rating. KEY RATING DRIVERS The affirmation reflects EPPL's continued medium scale of operations, despite a 7.8% yoy growth in revenue to INR1,168.4 million on account of increasing order book and higher order execution. Ind-Ra expects revenue to increase further in the near term due to a strong order book of INR1,450 million (1.2x of FY18 revenue) as of December 2018, which is to be executed by December 2019. During 9MFY19, revenue was INR1,025 million. The company's return on capital employed was 13% in FY18 and EBITDA margin was average at 7.7% (FY17: 9.1%). The decline in margin was due to the company's strategy to drive sales by competitive bidding as well as a steep increase in price of its key raw material (steel). Ind-Ra expects the EBITDA margin to remain at 8%-9% in FY19. The ratings continue to factor in EPPL's modest credit metrics. Interest coverage (operating EBITDA/gross interest expense) deteriorated to 1.6x in FY18 (FY17: 2.3x), on account of an increase in gross interest expenses coupled with a decline in operating EBITDA. However, net financial leverage (adjusted net debt/operating EBITDA) improved to 4.0x in FY18 (FY17: 4.5x), on account of lower utilization of the working capital limits at the end of the year, along with scheduled debt repayments. For FY19, Ind-Ra expects the credit metrics to remain at similar level. EPPL had a modest liquidity position as indicated by 84% and 47% average peak utilization of the cash credit and non-fund based limits, respectively, for the 12 months ended December 2018. However, during 2QFY19-3QFY19, the cash credit limits were fully utilized. Cash flow from operations turned positive to INR64.8 million in FY18 from negative INR226 million in FY17 because of an improvement in the net working capital cycle. Net cash conversion cycle improved to 117 days in FY18 (FY17: 152 days), on account of improvement in receivable and inventory days. At end-March 2018, the company had a cash balance of INR2.8 million (FYE17: INR3.4 million). The ratings are, however, supported by the company's promoters' around a decade-long experience in the fabrication of power transmission towers, resulting in secured orders, amid intense competition. RATING SENSITIVITIES Negative: Decline in the revenue and/or EBITDA margin leading to deterioration in the credit metrics, all on a sustained basis, and/or any deterioration in the net cash conversion cycle leading to a stressed liquidity will be negative for the ratings. Positive: A substantial growth in revenue and/or a rise in the EBITDA margin, leading to an improvement in the credit metrics on a sustained basis could lead to a positive rating action. COMPANY PROFILE Formed in 2008, EPPL is primarily engaged in the fabrication of power transmission towers. It also undertakes galvanization work for fabricated steel structures. Its manufacturing facility is located at Tarapur, Maharashtra. GARG GRANITES: CARE Maintains B+ Rating in Not Cooperating ---------------------------------------------------------- CARE had, vide its press release dated January 18, 2019, placed the rating of Garg Granites Private Limited (GGPL) under the 'issuer non-cooperating' category as GGPL had failed to provide information for monitoring of the rating and had not paid the surveillance fees for the rating exercise as agreed to in its Rating Agreement . GGPL continues to be non-cooperative despite repeated requests for submission of information through e- mails, phone calls and a letter/email dated August 28, 2018, November 1, 2018 and November 12, 2018. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 7.50 CARE B+; Stable; Issuer not Facilities cooperating; Based on best available information Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. Detailed description of the key rating drivers At the time of last rating on September 21, 2017, the following were the rating strengths and weaknesses. Key Rating Weakness Financial risk profile marked by modest scale of operations with moderate profitability: The scale of operations of the company stood at a modest level with Total Operating Income (TOI) of INR14.25 crore and PAT of INR0.01 crore in FY17 (provisional) along with low net worth base of INR4.52 crore as on March 31, 2017. The profitability of the company stood moderate with PBILDT and PAT margin of 11.39% and 0.06% respectively in FY17. PBILDT margin of the company has marginally declined by 8 bps in FY17 over FY16 mainly on account of increase in administration and selling cost. Further, PAT margin has also declined in FY17 over FY16 mainly due to increase in depreciation cost. Till July 31, 2017, the company has achieved a turnover of INR4.00 crore. Leveraged solvency position and stressed liquidation position: The capital structure of the company stood leveraged with an overall gearing of 1.72 times as on March 31, 2017, improved from 6.32 times as on March 31, 2016 on account of decrease in total debt and considering of unsecured loans from promoters and relatives as a quasi-equity. Further, the debt service coverage indicators stood weak with interest coverage ratio of 1.32 times in FY17 and total debt to GCA stood at 23 times as on March 31, 2017. The liquidity position of the company stood working capital intensive with 95% utilization of its working capital bank borrowings during last 12 months ended July 2017. Further, the operating cycle stood elongated at 297 days in FY17 mainly due to high inventory holding period and collection period, which offset to an extent by increase in creditor period. GGPL maintains higher inventory level partly due to nature of the product necessitating storage of minimum level of stocks of different types/shades and partly due to dependence on bulky imported goods requirement to cater demand on prompt and regular basis. Liquidity ratio stood moderate marked by current ratio of 1.48 times and quick ratio of 0.64 times as on March 31, 2017. Risk associated with availability of raw material and foreign exchange fluctuation: The quality of raw material (i.e. granite block, sandstone, lime stone, marble etc.) has a high degree of heterogeneity since it is a natural resource extracted from mines. The inherent risk associated with this industry is that it is very difficult to procure the same quality of stones from the mines on a consistent basis. The company procures raw material based on the requirement of the order from various places, viz. local suppliers in Rajasthan and through imports mainly from Italy, Turkey and Egypt. The availability of the appropriate quality and quantity of the raw material depends upon the mining operations as marbles and stones are natural products with limited reserves. Further, the GGPL's profitability margins are susceptible to fluctuation in foreign exchange fluctuations, since the company import more than 50% of raw material requirement and it does not have any active hedging policy. Presence in a highly competitive marble industry and linkage to cyclical real estate sector: Currently size of the Indian Marble Industry is INR20,000 crore and it is considered to be highly fragmented with presence of large number of organized and unorganized player. The industry is concentrated in Rajasthan and Gujarat and majority of the processing units are clustered around the mining area. The entry barriers to the industry are very low and the operating margin is susceptible to new capacity additions in the industry. The industry is primarily dependent upon demand from real estate and construction sector across the globe. The real estate industry is cyclical in nature and is exposed to various external factors like the disposable income, interest rate scenario, etc. Any adverse movement in the macro-economic factors may affect the real estate industry and in turn business operations of GGPL. Key Rating Strengths Experienced promoters with established track record of operations in the marble industry: Overall operations of GGPL are managed by Mr. Sanjay Garg and Ms. Rachna Garg. Mr Sanjay Garg, director, who have around three decades of experience in the marble industry. He looks after finance and sales & marketing function of the company. He gets assistance from Mr Aditya Garg who is post graduate by qualification and executive director in the company. He has around four years of experience with the company. Ms Rachna Garg, director, looks after administrative function of the company and has more than two decades of experience in the marble industry. She is also proprietor of EAC. Further, the company has qualified tier-II management to support the promoters. Location advantage with ease of availability of raw material and labour: GGPL's processing facility of marbles is situated in Rajasthan which has the largest reserve of marbles in India with estimated reserves of 1,100 million tons accounting of more than 91% of the total marble reserves of the country. There are many units located in the cities of Rajasthan mainly in Udaipur, Chittorgarh and Kishangarh which are engaged in the business of mining and processing of marbles. Further, skilled labour is also easily available by virtue of it being situated in the marble belt of India. Further, the company has import license. The company procures marble blocks from domestic market as well as imports the same from Italy, Egypt and Turkey for processing. Kishangarh (Rajasthan) based Garg Granites Private Limited (GGPL) was incorporated in 1993 by Mr Sanjay Garg along with his family members. GGPL is engaged in the business of processing of marble blocks as well as trading of finished marble slabs and tiles. The processing plant of the company is located at Kishangarh and has an installed capacity to process 3.00 Lakh Cubic Feet Per Annum (LCFPA) of marble slabs and tiles. The company procures majority of raw material from Italy, Egypt and Turkey. GARG INDUSTRIES: Ind-Ra Retains BB- LT Rating in Non-Cooperating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has maintained Garg Industries' (GI) Long-Term Issuer Rating of 'IND BB- (ISSUER NOT COOPERATING)' in the non-cooperating category and has simultaneously withdrawn it. The instrument-wise rating actions are: -- INR135.00 mil. Fund-based working capital limits maintained in 'IND BB- (ISSUER NOT COOPERATING)' and withdrawn; and -- INR5.00 mil. Non-Fund-based maintained in IND A4+ (ISSUER NOT COOPERATING) before being withdrawn. KEY RATING DRIVERS GI did not participate in the rating exercise despite continuous requests and follow-ups by the agency. Ind-Ra is no longer required to maintain the rating as the agency has received a no- objection certificate from the rated facility's lender. COMPANY PROFILE Established in 1948 and managed by BM Garg, Garg Industries manufactures and exports steel hinges (square butt hinges, back flap hinges and piano hinges), staples, nuts, bolts, brackets and others. GOODWEAR FASHION: Ind-Ra Affirms 'BB' on INR4.53MM Loan ------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed Goodwear Fashions Pvt. Ltd.'s (GFPL) Long-Term Issuer Rating at 'IND BB'. The Outlook is Stable. The instrument-wise rating actions are: -- INR88 mil. Fund-based limits affirmed with IND BB/Stable/ IND A4+ rating; -- INR4.53 mil. (reduced from INR29.4 mil.) Term loan due on October 2022 affirmed with IND BB/Stable rating; and -- INR11 mil. (increased from INR1 mil.) Non-fund based affirmed with IND A4+ rating. KEY RATING DRIVERS The affirmation reflects an improvement in GFPL's revenue and credit metrics. Revenue grew to INR338.67 million in FY18 (FY17: INR336.70 million), on account of an increase in sales volume. Interest coverage (operating EBITDA/ gross interest expense) improved to 3.27x in FY18 (FY17: 2.27x) on the back of a decline in interest cost, while net leverage (gross debt/ operating EBITDA) improved to 2.50x (2.78x) because of decline in total debt. However, the scale of operations remains small and metrics moderate. Also, the company continues to report modest EBITDA margin because of high competition. The margins fell to 9.40% in FY18 (FY17: 9.75%) due to an increase in other expense and personnel expenses. Its return on capital employed was 7.72% in FY18 (FY17: 7.63%). The ratings continue to factor in GFPL's moderate liquidity position, as reflected by 89.03% average utilization of working capital limits over the 12 months ended December 2018. Also, its net working capital cycle elongated to 118 days in FY18 (FY17: 113 days) due to a rise in inventory days and debtor days. However, the ratings are supported by the company's directors' more than two decades of experience in the garment industry. RATING SENSITIVITIES Negative: A decline in EBITDA margin leading to deterioration in credit metrics, all on a sustained basis, could lead to a negative rating action. Positive: Sustained revenue growth, along with improved credit metrics, could lead to a positive rating action. COMPANY PROFILE Incorporated in 1988, GFPL manufactures high-end woven and knitted interlinings. Its 800,000 meters per month capacity is located at Uttarakhand. It is owned and managed by Ved Paul Kapoor and Vishal Kapoor. JALARAM INDUSTRIES: CARE Moves 'B+' Rating to Not Cooperating ------------------------------------------------------------- CARE Ratings has migrated the rating on bank facilities of Jalaram Industries (JI) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 6.90 CARE B+; Stable, Issuer Not Facilities Cooperating; Based on best Available Information CARE has been seeking information from JI to monitor the ratings vide e-mail communications/letters dated October 4, 2018, December 18, 2018 and January 8, 2019 and numerous phone calls. However, despite CARE's repeated requests, the firm 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 best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The rating on JI's bank facility and will now be denoted as CARE B+; Stable, 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 ratings take into account the small scale of operations with low profitability margins, moderate capital structure and weak debt coverage indicators. The rating is further constrained by working capital intensive nature of operation, vulnerability to fluctuation in prices of raw material, its presence in highly fragmented and regulated industry, and partnership nature of constitution. The rating, however, derives strength from the long track record of the operations, experienced partners and location advantage emanating from proximity to raw material. Detailed description of the key rating drivers At the time of last rating on June 27, 2018 the following were the rating strengths and weaknesses. Key Rating Weaknesses Small scale of operations with low profitability margins: The income from operations of the firm though improved remained small at INR41.03 crore in FY17 and total capital employed of INR7.79 crore as on March 31, 2017, thus limiting financial flexibility of the company in times of stress. Moreover, the company has achieved a turnover of INR67.71 crore in FY18 (Provisional) showing a y-o-y growth of 66%. With business operations of processing of pulses, entailing low value additions, the entity's profit margins stood low. Moderate capital structure and weak debt coverage indicators: The capital structure of the firm remained moderate with overall gearing ratio of 1.09x as on March 31, 2017 owing to dependence on external borrowings. Moreover, with moderate gearing level and low profit margins, the debt coverage indicators of the entity stood weak. Working capital intensive nature of operation: The operations of the firm are working capital intensive in nature with gross current asset days of 89 days during FY17 with funds majorly blocked in inventory. The working capital requirements are met by the cash credit facility availed by the entity utilization of which remained high. Vulnerability to fluctuation in raw material prices: Agro-based industry is characterized by its seasonality, as it is dependent on the availability of raw materials, which further varies with different harvesting periods. Availability and prices of agro commodities are highly dependent on the climatic conditions. Adverse climatic conditions can affect their availability and lead to volatility in raw material prices. Presence in a highly fragmented and regulated industry: The competitive nature of agro-product processing industry due to low entry barriers, high fragmentation and the presence of a large number of players in the organized and unorganized sector translate in inherent thin profitability margins. Further, the raw material prices are regulated by government to safeguard the interest of farmers, which in turn limits the bargaining power of the millers. Partnership nature of constitution: Being a partnership firm, JI is exposed to the risk of withdrawal of capital by partners and limited excess to financial market. This limits the financial flexibility of the firm. Key Rating Strengths Experienced partners with long track record of operations: Ji is currently managed by Mr Jayesh H Chandrana, Mr Haribhai N Chandrana and Mr Arunbhai N Chandrana, having an average experience of more than three and a half decades in agro industries. The partners look after the overall function of the firm with adequate support from a team of experienced professionals. Long experience of the partners has supported the business risk profile of the entity to a large extent. Further, the firm is in the business since more than one and a half decades, which resulted in establishing good relationship with its customers and suppliers. Locational advantage emanating from proximity to raw material: JI's unit has close proximity to local grain markets of Wardha, major raw material procurement destinations for the entity. This ensures easy raw material access and smooth supply of raw materials at competitive prices and lower logistic expenditure for JI. JI based out of Wardha, Maharashtra is a partnership concern was established in January 2001. The entity is engaged in the business of processing of pulses at its processing facility located at Wardha, Maharashtra with an installed capacity of processing 50 tonnes of pulses per day. JAYA POULTRY: Ind-Ra Migrates 'B' LT Rating to Non-Cooperating -------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Jaya Poultry Farm'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 actions are: -- INR85.1 mil. Term loan due on September 2027 migrated to non- cooperating category with IND B (ISSUER NOT COOPERATING) rating; and -- INR40 mil. Fund-based working capital limit 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 February 2, 2018. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Incorporated in November 2017, Jaya Poultry Farm is a partnership firm engaged in the business of poultry layer farming. JET AIRWAYS: SBI Set to Acquire 15% Stake in Carrier ---------------------------------------------------- Bloomberg News reports that Jet Airways India Ltd., the carrier that is struggling under a pile of debt, may get some respite. India's largest lender State Bank of India is set to swap part of its loans into a stake of at least 15 percent in Jet Airways, people with knowledge of the matter said. Other creditors to the carrier also plan similar conversions of some debt into equity to help keep the carrier alive, they said, Bloomberg relays. Under a new rescue proposal for India's biggest full-service airline, founder Chairman Naresh Goyal's stake would fall below 20 percent from 51 percent currently, the people said, asking not to be identified as the information isn't public, Bloomberg relays. Etihad Airways PJSC, the foreign partner with a 24 percent stake, is expected to infuse additional funds to take its holding to more than 40 percent, they said. Bloomberg says an agreement that keeps the beleaguered airline flying would safeguard about 23,000 jobs and save Prime Minister Narendra Modi the embarrassment of a collapse months before general elections. The Mumbai-based carrier, which has struggled with profitability in an increasingly competitive market, has piled on $1.1 billion in debt and fallen behind on paying loans and salaries, Bloomberg discloses. "Lenders led by SBI have managed the process quickly and with a strategic intent of delivering a rescue package which works for the stakeholders," Bloomberg quotes Kapil Kaul, South Asia head of CAPA Centre for Aviation, as saying. "The key will be the composition of the board and quality of the new directors and the overall governance architecture. This to me is most critical." A final decision hasn't been taken as a deal is still being negotiated, the people said, Bloomberg relays. Bloomberg notes that Jet Airways has called an extraordinary general meeting on Feb. 21 in Mumbai, to seek shareholders approval to increase its authorized share capital by issuing equity and preferred shares. The company's shares have fallen 68 percent in the past year making it the worst performing share in the BI Asia Pacific Airlines index. They dropped 0.7 percent on Jan. 29, Bloomberg notes. According to Bloomberg, the Mumbai-based carrier, which started operations more than two decades ago after India ended state monopoly in aviation, has been under pressure to offer discounted fares on its premium flights with the entry of budget carriers. Market leader IndiGo and others, with their on-time, no-frills services, lured customers away from Jet, resulting in its slide into losses, the report says. Bloomberg says Jet Airways hasn't seen profit in all but two of the past 11 years, and has seen its market share more than halve to about 14 percent from its heyday. It wasn't just the competition that weighed on its earnings. The highest fuel prices in Asia, thanks to local taxes of as much as 30 percent, and fluctuations in oil prices dealt a blow as well, Bloomberg states. The tough conditions led to the collapse of Kingfisher Airlines earlier this decade, while state-owned Air India has survived on government bailouts. Budget carrier SpiceJet Ltd. ran out of cash in 2014 before it was rescued by one of its founders. The carrier is working on "various options on the debt-equity mix, proportion of equity infusion," the airline said in a statement on Jan. 16, adding the restructuring may lead to a change in the board of the company, adds Bloomberg. About Jet Airways Based in Mumbai, India, Jet Airways (India) Limited -- https://www.jetairways.com/EN/PH/Home.aspx -- provides passenger and cargo air transportation services. It operates through two segments, Air Transportation and Leasing of Aircraft. The company also leases aircrafts. It operates flights to 64 destinations in India and international countries, including Abu Dhabi, Amsterdam, Bahrain, Bangkok, Colombo, Dammam, Dhaka, Doha, Dubai, Hong Kong, Jeddah, Kathmandu, Kuwait, London Heathrow, Muscat, Paris, Riyadh, Sharjah, Singapore, and Toronto. As of August 31, 2017, the company had a fleet of 113 aircraft, which includes a mix of Boeing 777-300 ERs, Airbus A330-200/300 aircraft, Next Generation Boeing 737s, and ATR 72-500/600s. As reported in the Troubled Company Reporter-Asia Pacific on Dec. 28, 2018, ICRA revised the ratings on certain bank facilities of Jet Airways (India) Limited to [ICRA]C from [ICRA]B. The rating downgrade considers delays in the implementation of the proposed liquidity initiatives by the management, further aggravating its liquidity, as reflected in the delays in employee salary payments and lease rental payments to the aircraft lessors. Moreover, the company has large debt repayments due over the next four months (December-March) of FY2019 (INR1,700 crore), FY2020 (INR2,444.5 crore) and FY2021 (INR2,167.9 crore). The company is undertaking various liquidity initiatives, which includes, among others, equity infusion and a stake sale in Jet Privilege Private Limited (JPPL), and the timely implementation of these initiatives is a key rating sensitivity. Moreover, the company continues to witness a stress in its operating and financial performance. JET AIRWAYS: May Turn to Adani Group for Investment --------------------------------------------------- Manisha Singhal at Financial Express reports that Jet Airways promoter-chairman Naresh Goyal is understood to have approached the Adani Group with a proposal to invest in his ailing airline, which is in dire need of funds. As is known, Jet was earlier in talks with Tata Group but it seems the talks did not lead to any concrete result with the latter keen on investing only if Goyal relinquished his control over the carrier. FE could not confirm with the Adani Group if it has been approached by the Jet promoters with a bailout plan. According to FE, the latest development comes after earlier this month the Abu Dhabi-based Etihad Airways put strict conditions for infusing funds into the cash-strapped airline. Etihad, which currently holds 24% stake in Jet, has offered an investment proposition in the carrier at INR150 per share, a huge discount to Jet's current trading price, to raise its stake to 49% but wants exemption from an open offer, FE relays. FE relates that Etihad also wanted that Goyal's stake should come down to around 22% from the current 51% and he and his family should have no role in the running of the airline. The conditions were outlined in a letter by Etihad CEO Tony Douglas to the State Bank of India chairman Rajneesh Kumar. The SBI is the lead lender to Jet. In response to Etihad's offer, Goyal also wrote to the SBI chairman offering to invest up to INR700 crore in the airline as well as pledge all his shares on the condition that his stake does not fall below 25%. He also said that should it fall below 25%, he should be given a chance to raise it without having to go through the mandatory open offer, according to the report. On December 31, 2018, Jet had defaulted on a loan repayment to the consortium of banks. Sources in the know of development told FE that with lessors grounding Jet's plane due to non-payment, Goyal has begun scouting for alternate sources of funds. On Tuesday, the lessors grounded at least four of Jet's aircraft forcing the airline to cancel flights. FE says Adanis have earlier explored investing in the aviation space and were looking at budget carrier SpiceJet when former promoters Marans were looking for a buyer almost five years ago. Jet Airways declined comment over the development. In response to FE's query, Etihad said that it does not comment on rumours and speculation. Jet, in a corporate announcement on Jan. 28, informed the stock exchanges of an EGM to be held on February 21 to approve increase in its authorised share capital from INR200 crore to INR2,200 crore, FE adds. About Jet Airways Based in Mumbai, India, Jet Airways (India) Limited -- https://www.jetairways.com/EN/PH/Home.aspx -- provides passenger and cargo air transportation services. It operates through two segments, Air Transportation and Leasing of Aircraft. The company also leases aircrafts. It operates flights to 64 destinations in India and international countries, including Abu Dhabi, Amsterdam, Bahrain, Bangkok, Colombo, Dammam, Dhaka, Doha, Dubai, Hong Kong, Jeddah, Kathmandu, Kuwait, London Heathrow, Muscat, Paris, Riyadh, Sharjah, Singapore, and Toronto. As of August 31, 2017, the company had a fleet of 113 aircraft, which includes a mix of Boeing 777-300 ERs, Airbus A330-200/300 aircraft, Next Generation Boeing 737s, and ATR 72-500/600s. As reported in the Troubled Company Reporter-Asia Pacific on Dec. 28, 2018, ICRA revised the ratings on certain bank facilities of Jet Airways (India) Limited to [ICRA]C from [ICRA]B. The rating downgrade considers delays in the implementation of the proposed liquidity initiatives by the management, further aggravating its liquidity, as reflected in the delays in employee salary payments and lease rental payments to the aircraft lessors. Moreover, the company has large debt repayments due over the next four months (December-March) of FY2019 (INR1,700 crore), FY2020 (INR2,444.5 crore) and FY2021 (INR2,167.9 crore). The company is undertaking various liquidity initiatives, which includes, among others, equity infusion and a stake sale in Jet Privilege Private Limited (JPPL), and the timely implementation of these initiatives is a key rating sensitivity. Moreover, the company continues to witness a stress in its operating and financial performance. JUNEJA SONS: CARE Assigns 'B' Rating to INR9.12cr LT Loan --------------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of Juneja Sons Steel Processors (JSS), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 9.12 CARE B; Stable Assigned Detailed Rationale & Key Rating Drivers The rating assigned to the bank facilities of JSS is constrained by small scale of operations along with low PAT margin, leveraged capital structure, weak debt coverage indicators and working capital intensive nature of operations. The rating is further constrained by firm's presence in highly fragmented and competitive nature of industry and proprietorship nature of constitution. The rating, however, take comfort from the experience of proprietor. Going forward, the ability of JSS to profitably increase its scale of operations while improving its overall solvency position and efficiently managing its working capital requirements would remain the key rating sensitivities. Detailed description of the key rating drivers Key Rating Weaknesses Small scale of operations with low net-worth base and profitability margins: The firm's scale of operations remained small marked by Total Operating Income (TOI) of INR25.93 crore in FY18 (refers to the period of April 1 March 31)and net-worth base of INR1.48 crore as on March 31, 2018. Additionally, JSS's gross cash accruals were relatively small at INR0.52 crore for FY18. The small scale limits the firm's financial flexibility in times of stress and deprives it from scale benefits. Furthermore, the firm has reported total operating income of INR10.00 crore in 8MFY19 (Provisional). The PBILDT margin stood moderate at 5.62% in FY18. The PBILDT margin improved from 4.03% in FY17 owing to improved sales realization. However, PAT margin stood below unity level during last three financial years owing to high interest and depreciation costs. Leveraged capital structure and weak debt coverage indicators: JSS has a leveraged capital structure marked by overall gearing ratio of 6.22x as on March 31, 2018 on account of high dependence upon borrowings to meet various business requirements and low net-worth base. The overall gearing ratio deteriorated from 1.53x as on March 31, 2017 due to additional loans availed in FY18 along with higher utilization of working capital limits as on last balance sheet date and also due to withdrawal of funds amounting to INR1.86 crore in FY18. Furthermore, the debt coverage indicators stood weak marked by interest coverage ratio of 1.55x in FY18 and total debt to GCA ratio of 17.73x for FY18. (PY: 1.57x and 12.19x respectively). Working capital intensive nature of operations: The average operating cycle of the firm stood at 87 days for FY18 (PY: 66 days). The firm is required to maintain adequate inventory of finished goods to meet the bulk demand of customers resulting into average inventory period of 51 days for FY18 (PY: 40 days). The firm offers a collection period of around two and a half months to its customers due to its presence in competitive nature of industry which resulted into average collection period of 71 days for FY18 (PY: 69 days). On the supplier side, the firm usually deals on cash basis, however, receives a credit period of around 3-4 months from few of its suppliers resulting into average creditor period of 34 days for FY18 (PY: 42 days). The working capital limit remained fully utilized for the last 12 months period ended November, 2018. Constitution of the entity being a proprietorship firm: JSS's constitution as a proprietorship firm has the inherent risk of possibility of withdrawal of the proprietor's capital at the time of personal contingency and firm being dissolved upon the death/retirement/insolvency of proprietor. Highly fragmented and competitive nature of industry: The spectrum of the iron and steel industry in which the firm operates is highly fragmented and competitive marked by the presence of numerous large and small players in India. Hence, the players in the industry do not have any pricing power and are exposed to competition induced pressures on profitability. This apart, its products are subjected to the risks associated with the industry like cyclicality and price volatility. Key rating strengths Experienced proprietor: JSS was established in 2010 and its day to day operations are looked after by the proprietor himself. Mr. Jagmeet Singh Juneja has an industry experience of almost two decades gained through his association with JSS and Juneja Sheets Private Limited (JSP; from 2000-2012; engaged in similar business operations). The proprietor has adequate acumen about various aspects of business, which is likely to benefit the firm in the long run. Juneja Sons Steel Processors (JSS) was established in April 2010 as a proprietorship concern and is currently being managed by Mr. Jagmeet Singh Juneja. JSS is engaged in the processing (mainly cutting) of iron and steel products like H.R. and C.R. coils, sheets, strips, bars, plates, channels, angles etc. at its facility located at Ludhiana, Punjab, having a total processing capacity of 70,000 tonnes of products per annum, as on September 30, 2018. Besides JSS, the proprietor is engaged in another group concern namely, Radiant Auto Comp (RAC) was established as partnership firm in 2017 and is engaged in manufacturing of auto components. K.K LEISURES: CARE Migrates B Rating to Not Cooperating Category ---------------------------------------------------------------- CARE Ratings has migrated the rating on bank facilities of K.K Leisures and Tourism International Private Limited (KKLTIPL) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 11.00 CARE B; Stable; Issuer Not Facilities Cooperating; Based on best available information CARE has been seeking information from KKLTIPL to monitor the rating vide e-mail communications dated October 11, 2018, November 7, 2018, December 20, 2018 and numerous phone calls. However, despite CARE's repeated requests, the company has not provided the requisite information for monitoring the rating. 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 KKLTIPL's bank facilities will now be denoted as CARE B; Stable; 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. Detailed description of the key rating drivers At the time of last rating on September 25, 2017, the following were the rating strengths and weaknesses. Key Rating Weakness Small Scale of operations: KKLTIPL owns and operates hotels across Kerala. The major chunk of the revenues is collected through the sales of liquor, which contribute around 50% of the total sales in these hotels followed by the room rent which contribute around 30% of the total revenues. High regulatory risk in hospitality business: The hospitality business of the company is exposed to high regulatory risk, evident from the ban on serving of liquor in 3 and 4 star hotels in Kerala during FY15 and the ban on liquor on National highways during FY17. Weak capital structure: The networth of the company eroded and stood negative at INR0.09 crore as on March 31, 2017 (Prov) as a result of declining income due to the ban on liquor on 3 and 4 star hotels in Kerala. The interest coverage also stood low at 0.58x (PY: 0.11x) during FY17. Limited Geographical Diversification: The firm primarily has all its operations concentrated in the state of Kerala. In FY 15 Kerala faced the ban on serving liquor in 3 stars and 4 star hotels along with the closure of 732 bars in Kerala and then again in FY16 the sales of the firm went down on account of the ban of liquor on National highways which affected the sales of liquor in the hotels of the concerned firm which heavily depend on the sales of liquor for generating revenues. Key Rating Strengths Vast experience of promoters and strong group support: K.K. Leisures and Tourism International Private Limited (KKLTIPL) is a part of KK Group of companies with KK Builders (rated CARE BB; Stable/CARE A4) as their flagship entity. KKLTIPL is managed by company's Managing Director Mr.K.K. Mohandas and director Mr.K.K. Radhakrishnan. The promoters have an experience of more than 2 decades of managing construction and hospitality business in the region of Kerala. The promoters constantly provide support for the working capital requirements of the company with timely infusion of funds in the form of unsecured loans. KKLTIPL, incorporated on September 17, 2017 is engaged in the hoteling business and has star hotels with brand name BROAD BEAN. The company owns and operates hotels across Kerala which includes Resort & Ayurvedic Spa with 5 star facilities, Munnar, Idukki district, Four Star hotel at Vytilla Kochi in Ernakulam District (erstwhile Nyle Plaza), Three star hotel at Chakkrakkal in Kannur district and Three Star hotel at Kakkayangad in Kannur district. The day to day operation of the company is managed by Mr. K.K. Mohandas and Mr. K.K. Radhakrishnan. K&R RAIL: Ind-Ra Lowers Long Term Issuer Rating to 'BB+' -------------------------------------------------------- India Ratings and Research (Ind-Ra) has downgraded K&R Rail Engineering Limited's (KREL, erstwhile Axis Rail India Limited) Long-Term Issuer Rating to 'IND BB+' from 'IND BBB-' while migrating the ratings to the non-cooperating category. The Outlook is Stable. The issuer did not participate in the surveillance exercise despite continuous requests and follow ups by the agency. Thus, the rating is on the basis of best available information. Investors and other users are advised to take appropriate caution while using these ratings. The rating will now appear as 'IND BB+ (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR30 mil. Fund-based facilities downgraded and migrated to non-cooperating category with IND BB+ (ISSUER NOT COOPERATING)/Stable/IND A4+ (ISSUER NOT COOPERATING) rating; and -- INR415 mil. Non-fund-based facilities downgraded and migrated to non-cooperating category with IND A4+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: Issuer did not cooperate; based on the best available information. KEY RATING DRIVERS The downgrade reflects Ind-Ra's expectation that KREL's credit profile would deteriorate in FY19 because of a fall in revenues since end-FY18 owing to slower execution of orders in 1HFY19. The company had an order book of INR1,244 million to be executed by 1QFY19; of this, it was able to execute only INR626.9 million till end-1HFY19. As a result, the revenue fell to INR308 million in 1HFY19 (1HFY18: INR591.5 million; FY18: INR807 million; FY17: INR1,083 million). The company's interest coverage deteriorated to 1.7x in FY18 (FY17: 3.9x) because of a decline in the absolute EBITDA to INR11 million (INR18 million) due to the slow execution of orders. The net leverage improved to a negative 7.3x in FY18 (FY17: 0.2x) due to an increase in the cash balance to INR85 million (INR0.01 million). The ratings are constrained by the company's weak margins. The return on capital employed decreased to a negative 1% in FY18 (5%), and the EBITDA margin declined to 1.4% (1.6%) due to an increase in overheads. The ratings also reflect a decline in the company's cash flow from operations to a negative INR144 million in FY18 (FY17: INR101 million) due to a stretched net cash conversion cycle of 169 days in FY18 (FY17: 45 days). However, the cycle improved to 152 days in 1HFY19. The ratings have been migrated to the non-cooperating category as the company has not provided Ind-Ra with revised projection data, management certificate regarding timely debt servicing, rationale for the above changes in financials and information related to working capital utilization for the last 12 months. RATING SENSITIVITIES Positive: An improvement in the revenue and profitability, leading to an improvement in the credit metrics, on a sustained basis, will be positive for the ratings. Negative: Any further decline in the revenue or profitability, leading to deterioration in the credit metrics or tightness in liquidity, will be negative for the ratings. COMPANY PROFILE Incorporated in July 2010, KREL constructs railway sidings for private companies. KISHORE INFRASTRUCTURES: Ind-Ra Lowers LT Issuer Rating to BB+ -------------------------------------------------------------- India Ratings and Research (Ind-Ra) has downgraded Kishore Infrastructures Private Limited's (KIPL) Long-Term Issuer Rating to 'IND BB+' from 'IND BBB-'. The Outlook is Stable. The instrument-wise rating actions are: -- INR160 mil. Fund-based facilities downgraded with IND BB+/Stable/IND A4+ rating; -- INR800 mil. Non-fund-based facilities downgraded with IND A4+ rating; and -- INR40 mil. Proposed fund-based facilities* downgraded with Provisional IND BB+/Stable/Provisional IND A4+ rating. * The ratings are provisional and shall be confirmed upon the sanction and execution of loan documents for the above facilities by KIPL to the satisfaction of Ind-Ra. KEY RATING DRIVERS The downgrade reflects deterioration in KIPL's credit metrics to a modest level in FY18 from the comfortable level in FY17 and lower revenue in FY18 and 1HFY19 than Ind-Ra's expectations, as uncertainty over the goods and services tax slab affected order book execution. The agency expected revenue growth in view of a strong order book position of the company as of October 2017 KIPL's interest coverage (operating EBITDA/gross interest expense) was 1.6x in FY18 (FY17: 3.6x) and net leverage (total adjusted net debt/operating EBITDA) was 1.5x (negative 0.2x). The deterioration in the credit metrics was due to a decline in absolute EBITDA to INR47 million in FY18 (FY17: INR90 million), an increase in adjusted net debt to INR74 million (INR58 million) and a rise in gross interest expenses to INR29 million (INR25 million). KIPL's revenue declined 18% yoy to INR678 million in FY18 and stood at INR533 million in 1HFY19. The scale of operations declined to small from modest. The ratings are constrained by the modest liquidity of KIPL, indicated by an average fund-based limit utilization of 93% and non-fund based limit utilization of 86% for the 12 months ended December 2018. The company's cash flow from operations remained negative at INR90.16 million in FY18 (FY17: INR2.47 million), mainly due to changes in working capital. The ratings continue to be constrained by KIPL's exposure to the concentration risk, given the company largely executes rural electrification work-related projects in Maharashtra, Madhya Pradesh, Uttar Pradesh, Jharkhand and Rajasthan. The ratings, however, are supported by KIPL's healthy EBITDA margin, which was 6.89% in FY18 (FY17: 10.87%). The fall in the margin was due to an increase in variable cost. In addition, the company's return on capital employed was 20% in FY18 (FY17: 64%). The ratings are also supported by the promoters' experience of over eight years in undertaking rural electrification works. RATING SENSITIVITIES Negative: A further stretch in the liquidity position and a decline in the revenue and/or the EBITDA margin, leading to deterioration in the credit metrics, on a sustained basis, will be negative for the ratings. Positive: A substantial improvement in the revenue, the EBITDA margin and the credit metrics, on a sustained basis, along with the procurement of new orders, providing medium-term revenue visibility, could lead to a positive rating action. COMPANY PROFILE Incorporated in May 2010, KIPL is mainly engaged in the execution of electrical distribution, transmission and civil construction projects. L.C. INDUSTRIES: CARE Assigns B+ Rating to INR5cr LT Loan --------------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of L.C. Industries Private Limited (LCIP), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term Bank 5.00 CARE B+; Stable Assigned Facilities Long term/Short 3.00 CARE B+; Stable/CARE A4 Term Bank Assigned Facilities Detailed rationale and key rating drivers The rating assigned to the bank facilities of LCIP is constrained by its small though growing scale of operations, leveraged capital structure and coverage indicators, working capital intensive nature of operations and weak liquidity indicators. The rating is further constrained on account of fragmented and competitive nature of industry. The rating, however, draws comfort from experienced management and moderate profitability margins. Going forward; ability of the company to increase the scale of operations while improving its profitability margins and capital structure shall be its key rating sensitivity. Detailed description of the key rating drivers Key Rating Weakness Small though growing scale of operations: The operations of the company remained small as evident from total operating income and gross cash accruals of INR11.76 crore and INR0.12 crore, respectively in FY18 (refers to the period April 1 to March 31). Furthermore, the company's net worth base also remains relatively small at INR0.12 crore as on March 31, 2018. The small scale limits the company's financial flexibility in times of stress and deprives it of scale benefits. Though, the risk is partially mitigated by the fact that the scale of operations is growing continuously. For the period FY16-FY18, LCI's total operating income grew from INR1.15 crore in FY17 to INR11.76 in FY18 crore reflecting a compounded annual growth rate (CAGR) of 219.78% owing to higher quantity sold. Leveraged capital structure and coverage indicators: The capital structure of the company stood leveraged owing to higher dependence on external borrowings and small net worth base as marked by overall gearing which stood at 40.09x for the balance sheet date of FY18. Further, higher dependence on external borrowings resulted in weak coverage indicators as marked by interest coverage ratio and total debt to GCA of 1.50x and 40.85x during FY18. Working capital intensive nature of operations and weak liquidity indicators: Operations of the company are working capital intensive in nature marked by operating cycle of 63 days. The company has to maintain minimum inventory of its products to meet the demand of its customers resulting in inventory period of 65 days for FY18. Though the company usually sells for cash but to some customers it gives credit upto 16 days while procuring the raw material on cash basis and getting a low credit period of a month from the suppliers. The working capital limits of the company were almost fully utilized during the past 12 months ended November 30, 2018. Further, the liquidity indicators stood weak as marked by current and quick ratio of 0.96x and 0.87x respectively as on March 31, 2018. The cash and bank balances stood at INR2.35 crore as on March 31, 2018. Fragmented and competitive nature of industry: The commodity nature of the product makes the industry highly fragmented, with numerous players operating in the unorganized sector with very less product differentiation. The raw material (wheat) prices are regulated by government to safeguard the interest of farmers, which in turn limits the bargaining power of the wheat millers. Key Rating Strengths Experienced Management: LCI's operations are currently being managed by Mr. Sanjay Kesarwani and Mr. Shobhit Kesarwani. Mr. Sanjay Kesarwani is graduate by qualification and has accumulated experience of around two decades through his association with the group concern L.C Foods Limited. Mr. Shobhit Kesarwani is graduate by qualification and has an experience of around one and half decade through his association with the group concern. In addition, the operations of the company are smoothly carried out by a team of managers and professionals who have requisite experience in their respective fields. Moderate profitability margins The profitability margins of the company stood moderate as marked by PBILDT margin, which stood at 3.04% in FY18. However, high financial charges and depreciation cost restricted the net profitability of the company at 1.01% in FY18. Uttar Pradesh based, L. C. Industries Private Limited (LCI) was established in 2013 as a private company and is currently managed by Mr. Sanjay Kesarwani and Mrs. Shobhit Kesarwani. LCI is engaged in the trading of wheat flour (atta), refined wheat flour (maida), bran, semolina (suji) and choker. The company procures these traded products from farmers and market in Uttar Pradesh and further sells these products to the traders who are situated in Uttar Pradesh nearby regions. LONDON STAR: CARE Migrates D Rating to Not Cooperating Category --------------------------------------------------------------- CARE Ratings has migrated the rating on bank facilities of London Star Diamond Company (India) Private Limited (LSDCPL) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term/Short 10.80 CARE D/CARE D; ISSUER NOT Term Bank COOPERATING; Based on best Facilities available information Short-term Bank 12.85 CARE D; ISSUER NOT Facilities COOPERATING; Based on best available information CARE has been seeking information from LSDCPL to monitor the ratings vide e-mail communications/ letters dated January 4, 2019, January 9, 2019 and January 10, 2019 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 rating. In line with the extant SEBI guidelines CARE's rating on LSDCPL's bank facilities will now be denoted as CARE D/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). Detailed description of the key rating drivers At the time of last rating on July 13, 2017, the following were the rating strengths and weaknesses (updated for the information available from Banker): Key Rating Weaknesses Delay in debt servicing: As per the interaction with the banker, the account has turned NPA. Incorporated in 1964, London Star Diamond Company (India) Private Limited (LSDCPL) is engaged in trading of cut and polished diamonds. It also does trading of rough diamonds. The company is not a DTC sight-holder and it procures the diamonds primarily from the domestic market and also imports from Belgium. The major customers of LSDCPL for its cut and polished diamonds comprise of wholesalers who in turn sell the polished diamonds to jewellery manufacturers. LSDCPL is predominantly an export oriented firm with around 90% of its overall revenues earned from exports (mainly in Japan, Hongkong and Belgium) and remaining from domestic market. METTU CHINNA: CARE Migrates B Rating to Not Cooperating Category ---------------------------------------------------------------- CARE Ratings has migrated the rating on bank facilities of Mettu Chinna Mallareddy Godowns (MCMG) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 7.27 CARE B; Stable; Issuer Not Facilities Cooperating; Based on best available information Short-term 0.23 CARE A4; Issuer Not Bank Facilities Cooperating; Based on best available information CARE has been seeking information from MCMG to monitor the rating vide e-mail communications/letters dated September 26, 2018, October 3, 2018, December 24, 2018 and numerous phone calls. However, despite CARE's repeated requests, the firm has not provided the requisite information for monitoring the rating. 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 has reviewed the rating on the basis of publicly available information which however, in CARE's opinion is not sufficient to arrive at fair rating. The rating on Mettu Chinna Mallareddy Godowns's bank facilities will now be denoted as CARE B; Stable; 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. Detailed description of the key rating drivers At the time of last rating October 18, 2017 the following were the rating strengths and weaknesses: Key Rating Weakness Small scale of operations with low net worth base and fluctuating total operating income: The firm has a track record of around six years, however, the total operating income (TOI) of the firm remained low at INR2.04 crore in FY17 (Provisional) with low net worth base of INR6.77 crore as on March 31, 2017 (Provisional) as compared to other peers in the industry. Furthermore, the total operating income of the MCMG decreased from INR1.88 crore in FY15 to INR0.38 crore in FY15 due to low occupancy level of warehouse on account of reduced crop in FY16. However, the total operating income of the firm increased to INR2.04 crore due to increase in occupancy level from Andhra Pradesh State Warehousing Corporation. During H1FY18, the firm has achieved total operating income of INR1.20 crore. Weak debt coverage indicators: The debt coverage indicators of the firm remained weak during review period marked by total debt/GCA stood at 46.92x due to low cash accruals and high debt levels (the firm availed term loan for construction of warehouse and lending the same for rental purpose where the profit levels are thin). Due to the above said factor the PBILDT interest coverage also remained weak and stood at 1.46x in FY17 (Provisional). Highly fragmented industry with intense competition from large number of players: The firm is engaged in providing ware house for lease rental purpose to Andhra Pradesh State Warehousing Corporation which is highly fragmented industry due to presence of large number of organized and unorganized players in the industry resulting in huge competition. Constitution of the entity as a partnership firm with inherent risk of withdrawal of capital: MCMG, being a partnership firm, is exposed to inherent risk of the partner's capital being withdrawn at time of personal contingency and firm being dissolved upon the death/retirement/insolvency of the partners. Moreover, partnership firm business has restricted avenues to raise capital which could prove a hindrance to its growth Geographic concentration risk: The client profile of MCMG is limited to the state of Andhra Pradesh, exposing the firm to geographical concentration risk. The nine godowns of the firm are all located in Andhra Pradesh and concentrated in area surrounding East Godavari District. Key Rating Strengths Reasonable track record of the entity and experience of the partners for more than two decades: MCMG was established in the year 2011 and promoted by Mr. Ch. Venkata Krishna Rao (Managing Partner) along with his wife Mrs. Ch. Lakshmi. Mr. Ch. Venkata Krishna Rao is a qualified post graduate and has more than two decades of experience in the trading of chillies. Satisfactory profit margins albeit fluctuations during review period: The PBILDT margin of the firm has been satisfactory, however, fluctuating during review period. The firm has incurred cash losses during FY16 due to decrease in crop productivity resulted in decline in rental income from warehouse. However, the firm turnaround from loss to profit and achieved PAT margin of 5.98% in FY17. Moderate capital structure along with Comfortable operating cycle days: The capital structure of the firm improved and remained moderate on account of debt comprise of only long term loan. The overall gearing ratio improved from 1.18x as on March 31, 2016 to 0.85x as on March 31, 2017 (Provisional) due to repayment of term loan and unsecured loans coupled with increase in tangible networth. The operating cycle of the firm remained comfortable during review period. The firm is engaged in providing warehouse for rental purpose hence there will not be any creditors further the firm receives the payment from its customers first week of every month. Due to the above said factor, the operating cycle remained comfortable. Andhra Pradesh based, Mettu Chinna Mallareddy Godowns(MCMG) was established as a partnership firm in the year 2011 and promoted by Mr. Ch. Venkata Krishna Rao and Mrs. Ch. Lakshmi. The firm is engaged in providing ware house for lease rental purpose to Andhra Pradesh State Warehousing Corporation. The property is built on total land area of 18 acres comprising of nine godowns having storage capacity for food crops like paddy around 45000 MT and each godown having storage capacity of 5000MT. OM SREE PAPERTEK: Ind-Ra Affirms BB on INR225MM Loan Due 2024 ------------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed Om Sree Papertek Private Limited's (OSPPL) Long-Term Issuer Rating at 'IND BB'. The Outlook is Stable. The instrument-wise rating actions are: -- INR225 mil. Term loan due on March 2024 affirmed with IND BB/Stable rating; -- INR180 mil. Fund-based limit assigned with IND BB/Stable/ IND A4+ rating; and -- INR20 mil. Non-fund-based limit assigned with IND A4+ rating. KEY RATING DRIVERS The affirmation reflects the timely commencement of OSPPL's kraft paper manufacturing unit in July 2018 with a slight cost overrun of INR52.7 million. The company has reported INR535.3 million of revenue during July to November 2018 and expects it to be around INR900 million by March 2019. The company has a small order book of INR45 million, to be executed by end-January 2019. EBITDA margin was 18.2% and ROCE was 17%, interest coverage (operating EBITDA/gross interest expense) was 4.4x and net leverage (adjusted net debt/operating EBITDAR) was 3.7x in 5MFY19. Ind-Ra expects the company's financial and credit profile to be modest in FY19, based on the 5MFY19 numbers. OSPPL's debt service coverage is likely to be 2.9x in FY20. Ind-Ra expects the credit metrics to improve in FY20, due to the scheduled repayment of a term loan. Also, FY20 will be the first full year of operations. The ratings are supported by OSPPL's comfortable liquidity with fund-based facilities being utilized at an average of 51% in the five months ended December 2018. The company has unutilized credit lines of INR55.4 million and cash balance of INR4.9 million. The ratings are also supported by the plant's locational advantage in terms of the availability of raw materials. Also, its promoters have around two decades of experience in the paper manufacturing business. RATING SENSITIVITIES Positive: A significant increase in the revenue and EBITDA margins, leading to an improvement in the credit metrics, on a sustained basis, could be positive for the ratings. Negative: A decline in the revenue and EBITDA margin leading to deterioration in credit metrics, on a sustained basis, will be negative for the ratings. COMPANY PROFILE Incorporated in August 2016, OSPPL runs a 200tpa kraft paper manufacturing unit in Dillai Kulcharam village (Telangana). The company is promoted by Mr. Chamanbhai Patel Chaturbhai, Mr. Gautam Devajibhai Kotadiya, Mr. Hardik Patel, Mr. Rajesh Marvaniya, Mr. Shankar Patel and Mr. Vipul Patel. P.M. AGRO: CARE Migrates D Rating to Not Cooperating Category ------------------------------------------------------------- CARE Ratings has migrated the rating on bank facilities of P. M. Agro Products Private Limited (PAPL) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 5.00 CARE D; Issuer not Facilities cooperating; based on best available information CARE has been seeking information from PAPL to monitor the rating(s) vide e-mail dated November 26, December 10, December 28 and numerous phone calls. However, despite CARE's repeated requests, the firm 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 best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Further, PAPL has not paid the surveillance fees for the rating exercise as agreed to in its Rating Agreement. The rating on PAPL'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 rating assigned to the bank facilities of PAPL is continue to be remained constrained on account of delay in debt servicing. Detailed description of the key rating drivers Key rating weaknesses Delay in debt servicing: As per banker interaction, the account has turned NPA. PAPL was incorporated as a private limited company in 2010 to take over the proprietorship business of M/s P.M Dal Udyog (PDU). PAPL is engaged in processing and trading of Arhar Dal (Toor dal) and trading of dal chuni (used as cattle feed) and sells its product under the brand name Baba Gold, Rasoi Gold, Son Pari and Ganga Yamuna. PRAKASH CORRUGATED: CARE Migrates D Rating to Not Cooperating ------------------------------------------------------------- CARE Ratings has migrated the rating on bank facilities of Prakash Corrugated Products (PCP) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term 22.31 CARE D; Issuer Not Cooperating; facilities Based on best available Information Short Term 0.02 CARE D; Issuer Not Cooperating; facilities Based on best available Information CARE has been seeking information from PCP to monitor the rating vide e-mail communications/letters dated October 16, 2018, November 16, 2018, January 8, 2019 and numerous phone calls. However, despite CARE's repeated requests, the firm has not provided the requisite information for monitoring the rating. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The rating on PCP's bank facilities and/or instruments 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. The ratings take into account the delay in servicing of debt obligations by the firm. Detailed description of the key rating drivers At the time of last rating on March 16, 2018, the following were the rating weaknesses Delays in debt servicing: As per banker interaction, there have been delays in servicing of interest and principal on long term debt and the account has been classified as NPA. Timely repayment of debt is the key rating sensitivity. PCP was established in September 2001, as a proprietorship concern and is involved in manufacturing of make to order corrugated boxes. PCP's unit is located at Verna, Goa with the total installed capacity of 10,000 metric tonnes of corrugated boxes per annum (MTPA) of different sizes as per order. Moreover, PCP has in-house 'Flexo Printing' facility for printing on the boxes. PRASAD LIFESPACES: CARE Migrates B+ Rating to Not Cooperating ------------------------------------------------------------- CARE Ratings has migrated the rating on bank facilities of Prasad Lifespaces LLP (PLLP) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 15.00 CARE B+; Stable, Issuer Not Facilities Cooperating; Based on best Available Information CARE has been seeking information from PLLP to monitor the ratings vide e-mail communications/letters dated October 4, 2018, December 18, 2018 and December 18, 2018 and numerous phone calls. However, despite CARE's repeated requests, the firm 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 best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The rating on PLPL's bank facility and will now be denoted as CARE B+; Stable, 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 rating takes into account the project execution risk, low booking status and high dependence on customer advances. The rating is further constrained on account of its presence in a highly competitive and cyclical real estate industry with a changing regulatory framework. The rating, however, derives strength from the extensive experience of the promoters in real estate development along with the track record of the group, receipt of approvals and clearances and strategic location of the project. Detailed description of the key rating drivers At the time of last rating on December 14, 2017, the following were the rating strengths and weaknesses. Key Rating Weaknesses Project execution risk emanating from low booking status: The total cost of the project is expected to be INR44.71 crore which is proposed to be funded by promoter's contribution of INR5.50 crore, term loan of INR15 crore and customer advance of INR24.21 crore. As on March 31, 2017, the firm has incurred 15.12% of the total project cost which was funded through promoter's contribution of INR5.50 crore, and remaining through customer advances. Furthermore, the firm has sold ~23% of the total saleable area and has registered 42.2% of the sold area. Funding risk with receivables covering only 25% of residual construction cost and debt: The receivables from the sold inventory of the project cover only 25.51% of residual construction cost, outstanding debt and interest payments. Hence, the firm faces a funding risk. Hence, the ability of the entity to complete the project as per schedule within the envisaged cost and achieve the project sales at the assumed price will be critical from credit perspective. Cyclical nature of the real estate industry: The firm is exposed to the cyclicality associated with the real estate sector which has direct linkage with the general macroeconomic scenario, interest rates and level of disposable income available with individuals. A high interest rate scenario could discourage the consumers from borrowing to finance the real estate purchases and may depress the real estate market. Presence in a competitive environment: The real estate industry in India is highly fragmented with most of the real estate developers having region-specific presence. PLLP also faces competition from other real-estate projects in the area. However, Kothrud being a well-developed area has limited upcoming projects. Key Rating Strengths Long track record and experience of the promoters: The firm is promoted by Mr. Prasad Tatawar and Mr. Swati Tatawar having an experience of about 7 years in the real estate business. The promoters have developed around 12 lakh square feet (lsf) in the past. Strategic location of the projects: The project is located near Chandni Chowk junction of Pune and is also well connected to the nearby IT hubs of Hinjewadi, Baner and Wakad with the Pune Mumbai Expressway. The area is also apt for the working class of Pirangut MIDC located a little ahead of Bhukum. Various educational institutes like Symbiosis, Sanskruti School, Indus International, etc are also located nearby. Receipt of approvals and clearances for the projects: The firm has received all the necessary clearances and approvals for the projects related to land acquisition and construction. The requisite sanction plan of the buildings of the said project has been approved by the Pune Collectorate. The firm has registered its projects under MAHA-RERA (Maharashtra Real Estate Regulatory Authority). PLLP is established in year 2015, and is engaged in the business of real estate development. The firm is a SPV formed specifically for execution of the proposed residential project, "Pyramid County" at Bhukum, Pune and is promoted by Mr. Prasad Tatawar and Mr. Swati Tatawar. RELIGARE ENTERPRISES: Ind-Ra Withdraws BB- Rating, Outlook Stable ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has withdrawn Religare Enterprises Limited's (REL) Long-Term Issuer Rating of 'IND BB-'. The rating was on Rating Watch Negative (RWN). The instrument-wise rating action is: -- The IND BB- rating on the INR500 mil. Short-term debt (commercial paper) are withdrawn; KEY RATING DRIVERS The ratings have been withdrawn because there is no rated debt instrument outstanding. Ind-Ra will no longer provide ratings or analytical coverage for the company. COMPANY PROFILE REL is a non-bank finance company, whose subsidiaries are engaged in various businesses such as lending to small and medium enterprises (Religare Finvest Limited; 'IND BB'/RWN), housing finance (Religare Housing Development Finance Corporation; 'IND BB-'/RWN), retail security broking (Religare Broking Limited; 'IND A4+'/RWN) and health insurance (Religare Health Insurance Company). The institutional equities and capital markets business (Religare Capital Markets Limited) has been deconsolidated from REL's balance sheet since October 1, 2011. RICOH INDIA: Ind-Ra Affirms 'D' LT Issuer Rating on INR2BB NCDs --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed Ricoh India Limited's Long-Term Issuer Rating at 'IND D'. The instrument-wise rating action is: -- INR2.0 bil. Non-convertible debentures (NCDs) due on September 10, 2020 ISIN INE291B08028 coupon rate 7.0% issued on September 11, 2014 affirmed with IND D rating. KEY RATING DRIVERS The affirmation reflects continued and ongoing defaults in debt servicing by Ricoh India. According to the auditor's report and announcements on the Bombay Stock Exchange, the company has been defaulting on its NCD interest payments since March 2018. Pursuant to the withdrawal of the financial support to Ricoh India by its parent (Japan-based Ricoh Company Limited, a global player in office imaging and solutions and industrial products) in October 2017, all the loans outstanding from the banks as cash credit and working capital demand loan that were covered by a standby letter of credit issued by the parent were demanded by the bankers. Ricoh Company paid the outstanding amounts totalling INR12.9 billion to the banks. The amounts were classified as unsecured loan from related party in Ricoh India's books. In addition, Ricoh Company announced in October 2017 that it would not supply additional hardware and accessories to Ricoh India, unless pending payments were made. As of March 2018, Ricoh India had an outstanding debt of INR14.9 billion: an unsecured loan of INR12.9 billion to Ricoh Company, 7.0% INR2 billion NCDs due to Ricoh Asia Pacific Pte Limited due to be repaid in a single repayment on September 10, 2020, and half-yearly interest payments due in March and September. In the absence of formal terms and conditions, no interest has been accrued on unsecured borrowings of INR12.9 billion. In November 2017, independent directors resigned to protest against the withdrawal of the financial support, leading to the dissolution of the board of directors and the audit committee. Given Ricoh India had no financial support and had a negative net worth (FY18: INR22.6 billion; FY17: INR13.7 billion), Ricoh India applied to National Company Law Tribunal. The company is currently undergoing the corporate insolvency resolution process and being managed by a resolution professional. Ricoh India reported FY18 financials with a delay on November 22, 2018. It did not submit financial results for 2QFY18, 3QFY18, 4QFY18, 1QFY19 and 2QFY19. According to the qualified audited financial statements published by Ricoh India for FY18, revenue was INR6.8 billion (FY17: INR12.2 billion), EBITDA loss was INR2.77 billion (INR1.7 billion) and net loss was INR8.9 billion (INR3.3billion). FY18 financials were qualified for weakness in internal controls, lack of audit evidences, appropriateness of provisions made, going concern status and others by the auditors. RATING SENSITIVITIES Positive: Clarity on business continuity and timely debt servicing for at least three consecutive months could lead to an upgrade. COMPANY PROFILE Ricoh India provides copier-based laser multi-function printers in India. Ricoh Company and NRG group have a shareholding of 46.04% and 27.56% in Ricoh India, respectively. RIDCOR INFRA: Ind-Ra Lowers Senior Project Bank Loans Rating to D ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has downgraded the rating of RIDCOR Infra Projects Limited's (RIPL) senior project bank loans to 'IND D' from 'IND B+' while resolving the Rating Watch Negative (RWN) as follows: -- INR2,977.2 bil. (outstanding INR2,769.4 bil. as on Dec. 31, 2018) Senior project bank loans (long-term) due on Dec. 31, 2029 downgraded; Off RWN with IND D rating. KEY RATING DRIVERS The rating action reflects the non-repayment of interest and principal by RIPL. RATING SENSITIVITIES Positive: Timely debt servicing for at least three consecutive months could result in a positive rating action. COMPANY PROFILE RIPL, a wholly owned subsidiary of Road Infrastructure Development Company of Rajasthan Limited (a 50:50 joint venture between Infrastructure Leasing & Financial Services Limited ('IND D') and the government of Rajasthan), was incorporated to develop, design, finance, construct, operate and maintain Phase-III project stretches under the mega highways project. The Phase-III projects comprise the 65.5km Mathura-Bharatpur-Gangapur-Bhadoti stretch starting from the Uttar Pradesh border and running up to the 117.32km Rawatsar-Nohar-Bhadra at the Haryana border. SAMARTH COMMODITIES: CARE Migrates B+ Rating to Not Cooperating --------------------------------------------------------------- CARE Ratings has migrated the rating on bank facilities of Samarth Commodities Merchants Private Limited (SCMPL) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 6.00 CARE B+; Stable; Issuer not Facilities cooperating; Based on best available information CARE has been seeking information from SCMPL to monitor the rating vide e-mail communications/letters dated October 3, 2018, December, 24, 2018, January 2, 2019 and numerous phone calls. However, despite CARE's repeated requests, the firm has not provided the requisite information for monitoring the rating. 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 SCMPL's bank facilities will now be denoted as 'CARE B+; Stable; 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. Detailed description of the key rating drivers At the time of last rating in March 29, 2018, the following were the rating strengths and weaknesses: Key Rating Weaknesses Small scale of operations with moderate profit margins: The scale of operations of the company remained small marked by total operating income of INR44.34 crore (Rs.68.71 crore in FY16) with a PAT of INR1.37 crore (Rs.0.09 crore in FY16) in FY17. Further, the total operating income of the company declined in FY17 due to low trading income from iron and steel products. Furthermore, the total capital employed has also remained low at INR13.98 crore as on March 31, 2017. The company has booked revenue of INR36.70 crore during 8MFY18. Volatility in prices of traded goods: SCMPL purchases trading goods (i.e. billets, pig iron and sponge iron) from domestic market for trading on stock & sale basis. Moreover, few purchases happen depending on receipt of confirmed orders from its clients also. Since the prices of the trades goods are volatile in nature and it is basically determined by demand supply situation at a particular time. Thus the company is exposed to price volatility in the traded goods. However, the management has stated that some of the sales are made based on back-to-back orders, insulating the company from price volatility to a certain extent. Furthermore, the company is also exposed to volatility in prices of shares. Working capital intensive nature of business: The operation of SCMPL is working capital intensive marked by its high collection period. The company allows credit of around two months to its customers due to its low bargaining power as compared to its customers. Further the company maintains stock of traded goods for timely supply of its clients demand. However, the company stretches its creditors due to its long relationship with them which mitigates its working capital intensity to a certain extent. The average utilization of fund based limit remained moderately on the higher side at about 70% during last twelve months ending on November 30, 2017. Intensely competitive industry: Trading industry is a very fragmented and competitive space with presence of huge small players operating in the same region due to low capital requirement. In such a competitive scenario smaller companies like SCMPL in general are more vulnerable on account of its limited pricing flexibility. Key Rating Strengths Experienced promoters with long track record of operations: SCMPL is into trading business since 2003 and thus has more than a decade of track record of operations. Being in the same line of business since long period, the promoters have built up established relationship with its clients and the company is deriving benefits out of this. Mr. Prabhat Kumar Sinha (aged, 67 years) has more than two decade of experience in the same line of business looks after the day to day operations of the company. He is supported by other director Mr. Shriniwas Agarwal who also has more than a decade of experience in the same industry. Satisfactory profitability margins: Considering the trading nature of operations, the profit margins of the company remained satisfactory marked by PBILDT margin of 16.63% and PAT margin of 3.10% in FY17. Furthermore, the PBILDT margin improved significantly in FY17 mainly due to increase in revenue from shares trading where margin remains high. Furthermore, the PAT margin also improved in FY17 on account of higher increase in PBILDT level and low capital charges. Moderate capital structure with satisfactory debt coverage indicators: The capital structure of the company improved but the same remained moderate marked by debt equity and overall gearing ratios of 0.25x and 1.11x respectively as on March 31, 2017. The leverage ratios were improved as on March 31, 2017 due to lower utilization of fund based limits and accumulation of surplus into reserves. The debt coverage indicators of the company remained satisfactory marked by interest coverage of 8.13x and total debt to CGA of 5.35x in FY17. Further, the interest coverage ratio has improved in FY17 on account of low interest charges. Furthermore, the total debt to CGA also improved in FY17 due to low debt levels and high cash accrual. Incorporated in December 2003, Samarth Commodities Merchants Private Limited (SCMPL) was promoted by Mr. Prabhat Kumar Sinha and Mr. Shriniwas Agarwal of Rourkela, Odisha. Since its inception, SCMPL has been engaged in trading of iron and steel like billets, pig iron and sponge iron. Furthermore, the company is also engaged in shares trading business which contributed revenue of around 12% (2.56% in FY16) of total operating income in FY17. Liquidity position The liquidity position of the entity remained stretched marked by high utilization of its working capital limits as confirmed by its banker. SANEE INFRASTRUCTURE: CARE Moves B- Rating to Not Cooperating ------------------------------------------------------------- CARE Ratings has migrated the rating on bank facilities of Sanee Infrastructure Private Limited (SIPL) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 2.90 CARE B-; Stable; Issuer not Facilities cooperating; based on best available information Short-term Bank 8.00 CARE A4; Issuer not Facilities cooperating; based on best available information CARE has been seeking information from SIPL to monitor the rating(s) vide e-mail dated November 11, November 29, January 1 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 best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. Further, SIPL has not paid the surveillance fees for the rating exercise as agreed to in its Rating Agreement. The rating on SIPL's bank facilities will now be denoted as CARE B-;Stable/CARE A4 ; 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 assigned to the bank facilities of Sanee Infrastructure Private Limited (SIPL) are primarily constrained on account of its modest scale of operations with net and cash loss in FY17, leveraged capital structure and stressed liquidity position. The ratings, further, constrained on account of moderate order book position and presence in the highly competitive government civil construction industry. The ratings, however, favorably take into account the vide experience of the qualified promoters in the civil construction industry. Detailed description of the key rating drivers At the time of last rating on January 18, 2018, the following were the rating strengths and weaknesses. Key Rating Weakness Modest Scale of operations along with net and cash loss in FY17 and moderate order book position: During FY17, the scale of operations of the company stood modest marked by Total Operating Income (TOI) of INR3.82 crore mainly on account of lower execution of contracts due to suspension of the registration certification for two years. With significantly decline in TOI, SIPL has registered operating loss as well as net loss and cash loss in FY17. After revocation of order, SIPL got three work orders of INR52.57 crore. The on-going projects of the company are likely to be executed within a period of 18 months, providing medium term revenue visibility. Weak solvency position and stressed liquidity position: The solvency position of SIPL stood leveraged marked by overall gearing of 2.05 times as on March 31, 2017. Further, the operating cycles of the company has elongated mainly on account of higher debtors as on balance sheet date. Presence in highly competitive civil construction industry: The construction industry is highly fragmented in nature with presence of large number of unorganized players and a few large organized players coupled with the tender driven nature of construction contracts poses huge competition and puts pressure on the profitability margins of the players. Key Rating Strengths Experienced and qualified management with long track record of operations: Mr. Nilay Jain, Director, BE by qualification have more than two decade of experience in the civil construction industry and looks after overall affairs of the company. Mrs Nisha Jain, Director, has also 15 years of experience in the industry and looks after finance and accounts of the company. They are assisted by their son, Mr Neel Jain, who B.tech by qualification and looks after administration of the company. With long track record of operation of the company since 2002, the company has established relations with private players as well as government departments. Bhopal-based (Madhya Pradesh) Sanee Infrastructure Private Limited (SIPL) was formed in 2002 by Mr Nilay Jain and Mrs Nisha Jain as a private limited company to carry out the construction of building and roads. The company mainly executes contracts of construction & maintenance of roads majorly in the state of Madhya Pradesh. SARA SPINTEX: CARE Migrates D Rating to Not Cooperating Category ---------------------------------------------------------------- CARE Ratings has migrated the rating on bank facilities of Sara Spintex India Private Limited (SPPL) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 36.36 CARE D, Issuer Not Cooperating; Facilities Based on best available information Short term Bank 2.00 CARE D, Issuer Not Cooperating; Facilities Based on best available information CARE has been seeking information from SPPL to monitor the ratings vide e-mail communications/letters dated October 4, 2018, November 14, 2018 and December 18, 2018 and numerous phone calls. However, despite CARE's repeated requests, the firm 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 best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The rating on SPPL's bank facility 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 ratings. The ratings take into account the continuous delays in debt servicing obligations. Detailed description of the key rating drivers At the time of last rating on November 10, 2017 the following were the rating strengths and weaknesses. Key Rating Weaknesses Delay in debt servicing obligations: There have been continuous delays in debt servicing obligations. The delays were on account of weak liquidity position. SSPL was incorporated in the year March 2011; however, commenced with the commercial production from April 2013. The company is engaged in business of manufacturing of cotton yarn of various types like ring spurn yarns, slub yarn and core spun yarn. SHREE JAGDAMBA: CARE Reaffirms B+ Rating on INR16.32cr Loan ----------------------------------------------------------- CARE Ratings reaffirmed ratings on certain bank facilities of Shree Jagdamba Rice Mills (SJRM), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 16.32 CARE B+; Stable Reaffirmed Facilities Detailed Rationale and key rating drivers The rating assigned to the bank facilities of SJRM continues to be constrained by its modest scale of operations, low profitability margins, weak debt coverage indicators and weak liquidity position. The rating is further constrained by susceptibility to fluctuation in raw material prices and monsoon dependent operations, partnership nature of constitution and fragmented nature of industry coupled with high level of government regulation. The rating, however, derives strength from experienced proprietor, moderate capital structure and favorable location of plant. Going forward, the ability of the firm to increase its scale of operations while improving its profitability margins and overall solvency position shall be the key rating sensitivities. Detailed description of the key rating drivers Key Rating Strengths Experienced partners SJRM's operations are currently being managed by Mr. Om Prakash Garg, Mrs Sunita Garg, Mr Pankaj Kumar and Mr. Pardeep Garg, a family run business. Mr. Om Prakash Garg has an experience of more than four decades through his association with this entity and its group concern. He is ably supported by his two sons, namely Mr. Pankaj Kumar and Mr. Pardeep Garg having an experience of one decade through their association with this entity. Moderate capital structure: The capital structure of the firm is moderate as reflected by overall gearing ratio of 1.38x as on March 31, 2018. It improved from 1.85x as on March 31, 2017 mainly on account of repayment of term loans in FY18 and lower utilization of working capital limits as on last balance sheet date as compared to previous year. Favorable manufacturing location: SJRM is mainly engaged in milling and processing of rice. The main raw material (Paddy) is procured from grain markets, located mainly in Haryana. The firm's processing facility is situated in Haryana which is one of the highest producers of paddy in India. Its presence in the region gives additional advantage over the competitors in terms of easy availability of the raw material as well as favorable pricing terms. Key Rating Weaknesses Modest scale of operations with low profitability margins: The total operating income of the firm increased from INR64.66 crore in FY17 to INR83.68 crore in FY18 at an annual growth rate of 29.42% owing to higher quantities sold due to increase in orders received from existing customers. However, the same continues to remain modest. The modest scale of operations limits the firm's financial flexibility in times of stress and deprives it from scale benefits. The profitability margins stood weak marked by PBILDT margin of 3.21% and PAT margin of 0.06% in FY18. The PBILDT margin declined from 4.17% in FY17 to 3.21% in FY18 owing to increase in raw material costs. However, due to decline in interest and depreciation costs in percentage terms, PAT margin stood stable at 0.06% in FY18 (0.05% in FY17). Weak debt coverage indicators: The debt coverage indicators remained weak marked by interest coverage ratio of 1.42x in FY18 and total debt to GCA ratio of 19.04x for FY18. The interest coverage ratio deteriorated marginally from 1.48x in FY17 to 1.42x in FY18 due to increase in interest cost in FY18 owing to higher utilization of working capital limits during the year. The total debt to GCA ratio improved from 22.88x for FY17 to 19.04x for FY18 due to decline in debt levels of the firm in FY18. Weak liquidity position: The average operating cycle of the firm stood elongated at 96 days for FY18 [PY: 132 days]. SJRM is required to maintain adequate inventory mainly in the form of raw material to ensure smooth production process as well as maintain stock of finished products in order to meet the demand of customers which resulted in average inventory period of 98 days for FY18 [PY: 133 days]. The same improved as compared to previous year due to decrease in unsold finished goods. The firm generally extends credit period of around one week to its customers, resulting into average collection period of 6 days for FY18 (PY: 6 days). The firm receives similar credit period of around 10 days from suppliers. The working capital limits remained fully utilized for the last 12 months period ended December 2018. Further, quick ratio stood weak at 0.15x as on March 31, 2018 and free cash and bank balance stood at INR0.54 crore as on March 31, 2018. Susceptibility to fluctuation in raw material prices and monsoon dependent operations: Agro-based industry is characterized by its seasonality, due to its dependence on raw materials whose availability is affected directly by the vagaries of nature. Adverse climatic conditions can affect their availability and leads to volatility in raw material prices. Any sudden spurt in raw material prices may not be passed on to customers completely owing to firm's presence in highly competitive industry. Partnership nature of constitution: SJRM's constitution as a partnership firm has the inherent risk of possibility of withdrawal of the partner(s) capital at the time of personal contingency and firm being dissolved upon the death/retirement/insolvency of partner(s). Moreover, partnership firms have restricted access to external borrowing as credit worthiness of partner(s) would be the key factors affecting credit decision of the lenders. Fragmented nature of industry coupled with high level of government regulation: The commodity nature of the product makes the industry highly fragmented with numerous players operating in the unorganized sector with very less product differentiation. Furthermore, the raw material (paddy) prices are regulated by government to safeguard the interest of farmers, which in turn limits the bargaining power of the rice millers. Shree Jagdamba Rice Mills (SJRM) was established in June 2008 as a partnership firm and is managed by Mr. Om Prakash Garg and his family members Mrs. Sunita Garg, Mr. Pankaj Kumar and Mr. Pradeep Garg sharing profit and losses in the ratio of 20%, 20%, 30% and 30% respectively. They collectively look after the overall operations of the firm. SJRM is engaged in processing of paddy with an installed capacity of 60,000 tonnes per annum (TPH) of paddy as on December 31, 2018 at its unit located at Kaithal, Haryana. The firm is also engaged in milling and trading of rice (income from trading constituted 25% in FY18). The firm procures the raw material (paddy) from grain markets in Haryana, Delhi and Uttar Pradesh through commission agents and sells its product to wholesalers and traders located in Rajasthan, Maharashtra, Karnataka, West Bengal, Delhi, Uttar Pradesh, Punjab & Gujarat. SHREE VENKATESH: Ind-Ra Withdraws 'BB' on INR160MM Term Loan ------------------------------------------------------------ India Ratings and Research (Ind-Ra) has affirmed and withdrawn Shree Venkatesh Realties' (SVR) Long-Term Issuer Rating of 'IND BB'. The Outlook was Stable. The instrument-wise rating action is:. -- The IND BB rating on the INR160 mil. Term loan* due on September 2018 affirmed & withdrawn. *Affirmed at 'IND BB'/Stable before being withdrawn KEY RATING DRIVERS The affirmation reflects the continued salability risk faced by SVR's ongoing project, Lake Life, in Pune. Lake Life is an 11- storey project with 161 residential, 28 commercial and six bungalow units. The project is being jointly developed by SVR and landowners, with revenue sharing of 61.8% and 38.2%, respectively. SVR has so far sold 116 units (97 residential and 19 commercial); at end-September 2018, sales had stood at 108 units (89 residential and 19 commercial). The firm has collected 75.4% of the total sales value of INR373.9 million. The total project cost is INR674 million, funded by debt of INR160 million in debt, promoter contribution of INR170 million in and customer advances worth INR344 million. As of September 2018, the promoters had infused the entire funding. The company completed the project construction in June 2018. The ratings continue to be supported by the promoters' strong track record of 18 completed projects in Pune and their combined experience of over two decades in the real estate sector. Ind-Ra is no longer required to maintain the ratings, as the agency has received a no objection certificate from the company's lenders. This is consistent with the Securities and Exchange Board of India's circular dated March 31, 2017 for credit rating agencies. COMPANY PROFILE SVR is a Pune-based partnership firm engaged in real estate development. SHRI RAM: CARE Migrates B+ Rating to Not Cooperating Category ------------------------------------------------------------- CARE Ratings has migrated the rating on bank facilities of Shri Ram Comtrade Private Limited (SRCPL) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 6.00 CARE B+; Stable, Issuer Not Facilities Cooperating; Based on best Available Information Short-term Bank 7.50 CARE A4; Issuer Not Facilities Cooperating; Based on best available information CARE has been seeking information from SRCPL to monitor the rating vide e-mail communications/letters dated October 3, 2018, December, 24, 2018, January 2, 2019 and numerous phone calls. However, despite CARE's repeated requests, the firm has not provided the requisite information for monitoring the rating. 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 GRI's bank facilities will now be denoted as 'CARE B+; Stable; ISSUER NOT COOPERATING' and CARE A4; 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. Detailed description of the key rating drivers At the time of last rating in December 26, 2017, the following were the rating strengths and weaknesses: Key Rating Weaknesses Small scale of operations with low profit margins: The scale of operations of the company remained small marked by total operating income of INR56.83 crore (Rs.57.77 crore in FY16) with a PAT of INR0.13 crore in FY17. Further, the total operating income of the company witnessed an erratic trend during last three years (FY15- FY17) on account of sluggish demand of its products in the end user industry. Furthermore, the total capital employed has also remained low at INR12.06 crore as on March 31, 2017. Furthermore, the profit margins of the company remained low marked by PBILDT margin of 1.81% and PAT margin of 0.23% in FY17 mainly due to its trading nature of operations. The PBILDT margin improved in FY17 by 105 bps due to lower cost of operations. The PAT margin also improved in FY17 on account of higher increase in PBILDT level vis-a-vis increase in capital charges. Volatility in prices of traded goods: SRCPL purchases trading goods (i.e. sand, cement, iron, steel, household pipes and pipe fittings etc.) from domestic market for stock & sale basis. Since the prices of the trades goods are volatile in nature and it is basically determined by demand supply situation at a particular time. Thus the company is exposed to price volatility in the traded goods. Working capital intensive nature of business: The operations of SRCPL remained working capital intensive marked by its moderate collection and inventory period in FY17. The company allows credit of around two months to its customers to boost up its revenue in an intensely competitive industry. Further the company maintains stock of traded goods for timely supply of its clients demand. Accordingly the average utilization of fund based limit remained on the higher side at about 90% during last twelve months ending on November 30, 2017. Moreover, the company stretches its creditors due to its long relationship with them which mitigates its working capital intensity to a certain extent. Moderate capital structure with moderate debt coverage indicators: The capital structure of the company remained moderate as on last three account closing dates. Further, the overall gearing ratio has deteriorated to 0.99x as on March 31, 2017 due to higher utilization of working capital limits. Furthermore, the debt coverage indicators of the company also remained moderate in the last three years. The interest coverage ratio although deteriorated marginally in FY17 due to increase in interest expenses but the same stood satisfactory at 1.27x in FY17. Total debt to GCA remained weak at 37.74x in FY17 due to high debt levels. Intensely competitive industry: SRCPL is engaged in the trading of building construction materials which is primarily dominated by large players and characterized by high fragmentation and competition due to the presence of numerous players in India owing to relatively low entry barriers. High competitive pressure limits the pricing flexibility of the industry participants which induces pressure on profitability. Key Rating Strengths Satisfactory track record of operations and experienced promoters: SRCPL is into trading of building construction materials since 2012 and thus has satisfactory track record of operations. Mr. Abhishek Agarwal is associated with the company since its inception and has two decades of experience in civil construction industry along with trading of clothes, fabrics, textiles, dress materials. He is supported by other director Ms. Pinkey Agrawal who also has more than a decade of experience in the same industry along with business experience in trading of clothes, fabrics, textiles, dress materials etc. Incorporated in December 2012, Shri Ram Comtrade Private Limited (SRCPL) was promoted by Mr. Abhishek Agarwal and Mr. Pinkey Agrawal of Ranchi, Jharkhand. Since its inception, SRCPL has been engaged in trading of construction materials like cement, iron & steel, different types of pipes and pipe fittings. Liquidity position The liquidity position of the entity remained stretched marked by high utilization of its working capital limits as confirmed by its banker. SHRINATH COTTON: CARE Lowers Rating on INR6.03cr Loan to D ---------------------------------------------------------- CARE Ratings revised the ratings on certain bank facilities of Shrinath Cotton Industries (SCI), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 6.03 CARE D; Issuer not cooperating; Facilities Based on best available Information Revised from CARE B+; Stable Detailed Rationale & Key Rating Drivers CARE has been seeking information from SCI to monitor the rating(s) vide e-mail communications/ letters dated August 31, 2018, October 1, 2018, November 13, 2018, January 2, 2019, January 15, 2019, January 16, 2019 and numerous phone calls. However, despite CARE's repeated requests, the firm has not provided the requisite information for monitoring the ratings. In line with the extant SEBI guidelines, CARE has reviewed the ratings on the basis of the best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The ratings on SCI'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 on-going delays in debt repayments owing to weak liquidity position. Detailed description of the key rating drivers Key Rating Weaknesses Ongoing delay in debt servicing: SCI has been irregular in servicing its debt obligation due to weak liquidity position of the firm. There have been overdrawals in the cash credit account for more than 30 days. SCI is a partnership firm established in 2006 by three partners Mr. Keshavlal Popat, Mr. Bharat Popat and Mrs. Raksha Popat which was later reconstituted with the retirement of Mr. Keshavlal Popatas on January 18, 2011. It is now managed by Mr. Bharat Popat and Mrs. Raksha Popat and has its manufacturing facility at Amreli district, Gujarat. SCI is engaged in the cotton ginning and pressing business. The firm is ISO 9001:2008 certified and Technology Mission on Cotton (TMC) approved firm by the Ministry of Textile, GOI. As on March 31, 2017, SCI had a total installed capacity of 24,000 bales of cotton and 6,133 metric tonne per annum (MTPA) of cotton seed. SIR BIOTECH: Ind-Ra Migrates BB+ Issuer Rating to Non-Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Sir Biotech India Limited'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 the rating. The rating will now appear as 'IND BB+ (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR15 mil. Term loan-1 due on March 2018 migrated to Non- Cooperating Category with IND BB+ (ISSUER NOT COOPERATING) rating; -- INR506.25 mil. Term loan-2 due on March 2028 migrated to Non- Cooperating Category with IND BB+ (ISSUER NOT COOPERATING) rating; -- INR568.75 mil. Term loan-3 due on March 2028 migrated to Non- Cooperating Category with IND BB+ (ISSUER NOT COOPERATING) rating; -- INR325.0 mil. Term loan-4 due on March 2027 migrated to Non- Cooperating Category with IND BB+ (ISSUER NOT COOPERATING) rating; and -- INR150 mil. Non-fund-based facility migrated to Non- Cooperating Category with IND A4+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on February 8, 2018. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Incorporated in 1995, Sir Biotech India is engaged in the trading of iron ore, plastic polymer, raw cotton, copper rods, alkaline battery and metal products, and the processing of peanuts. Moreover, it is engaged in the hospitality and real estate businesses. SONALE FABRICS: Ind-Ra Assigns BB on INR6MM LongTerm Loans ---------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Sonale Fabrics Private Limited (SFPL) a Long-Term Issuer Rating of 'IND BB'. The Outlook is Stable. The instrument-wise rating actions are: -- INR6 mil. Long-term loans due on December 2020 assigned with IND BB/Stable rating; and -- INR165 mil. Fund-based limits assigned with IND BB/Stable/ IND A4+ rating. KEY RATING DRIVERS The ratings reflect SFPL's tight liquidity, indicated by an average maximum fund-based limit utilization of 98% for the 12 months ended December 2018, due to the working capital-intensive nature of business. SFPL's working capital cycle elongated to 101 days in FY18 (FY17: 101 days) owing to a long inventory holding period of 80-90 days and high debtor days of 70-100 days. SFPL makes payments to suppliers in 20-30 days. Moreover, SFPL had a cash balance of INR1 million at FYE18 (FYE17: INR0.5 million). In addition, its cash flow from operation was INR4 million in FY18 (FY17: INR1 million). As of FY18, SFPL does not have any term debt obligation. As informed by the management, the company does not have any debt-funded capex plans for the near term. The ratings further reflect the weak credit metrics of SFPL due to high working capital requirements. Its interest coverage (operating EBITDA/gross interest expense) was 1.4x in FY18 (FY17:1.4x; FY16:1.4x), with its net leverage (total adjusted net debt/operating EBITDAR) standing at 4.4x (4.9x; 4.9x). The ratings also reflect the volatile, albeit average, EBITDA margin of SFPL due to a fluctuation in raw material prices. Its EBITDA margin was 5.6%-6.5% in FY16-FY18. SFPL's return on capital employed was 15% in FY18 (FY17: 14%). However, the ratings are supported by a sustained increase in revenue, driven by a rise in orders from customers. Its revenue raised to INR879 million in FY18 from INR874 million in FY17 and INR785 million in FY16. The scale of operations is medium. The ratings benefit from the promoters' experience of over three decades in the yarn manufacturing business. RATING SENSITIVITIES Negative: A fall in the EBITDA margin, leading to deterioration in the credit metrics, all on a sustained basis, could be negative for the ratings. Positive: A rise in the revenue and the profitability, leading to an improvement in the credit metrics, all on a sustained basis, could be positive for the ratings. COMPANY PROFILE SFPL was formed in 1987 by Mr. Kantilal C Rajpurohit. The company is engaged in the trading and manufacturing of shirts and suits. It has a monthly manufacturing capacity of 0.5 million-0.7 million meters. SRI BALAJI: CARE Migrates B Rating to Not Cooperating Category -------------------------------------------------------------- CARE Ratings has migrated the rating on bank facilities of Sri Balaji Trading Corporation (SBTC) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank 6.00 CARE B; Stable, Issuer not Facilities cooperating CARE has been seeking information from SBTC to monitor the rating vide e-mail communications/letters dated January 3, 2019, January 7, 2019, January 8, 2019 and numerous phone calls. However, despite CARE's repeated requests, the firm has not provided the requisite information for monitoring the rating. 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 has reviewed the rating on the basis of best available information which however, in CARE's opinion is not sufficient to arrive at fair rating. The rating on Sri Balaji Trading Corporation's bank facilities will now be denoted as CARE B; Issuer not Cooperating; 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. Detailed description of the key rating drivers At the time of last rating on September 13, 2017 the following were the rating strengths and weaknesses: Key Rating Weakness Moderate revenue and low profit margins: The total operating income of the firm has been fluctuating over the last three years ending FY16 (Prov.). The operating income is linked to demand and supply functions in cotton market coupled with opportunities in buying and selling of cotton lint and cotton yarn. The total operating income of the firm increased from INR27.27 crore in FY14 to INR35.11 crore in FY15 led by stable demand in cotton market. However, the same reduced to Rs, 32.32 crore in FY16 (Prov.) due to lower demand of the cotton products during the year. The PBILDT margin also has been fluctuating over the last three financial years mainly on account of fluctuation in raw material prices of traded goods. PBILDT margin dipped by 52 bps to 1.15% in FY15 over FY14 and increased by 27 bps to 1.42% in FY16 (Prov.). In line with increased PBILDT, PAT level also increased during FY15, however, PAT margin remained stable at 0.21% due to reduction in capital charge. During FY16, increase in PBILDT level resulted in increase in PAT level and PAT margin of the firm. Constitution of the entity as a Sole proprietorship firm: SBTC, being a Sole proprietorship firm, is exposed to inherent risk of the proprietor's capital being withdrawn at time of personal contingency and firm being dissolved upon the death/ retirement/insolvency of the proprietor. Moreover, the business also has restricted avenues to raise capital which could prove a hindrance to its growth. Volatility in raw material prices: Prices of raw cotton are highly volatile in nature and depend upon the factors like area under cultivation, crop yield, international demand-supply scenario, export quota decided by the Government and inventory carry forward of the previous year. During FY15, raw cotton and cotton yarn prices fell below Minimum Support Price (MSP). This in-turn affected the profit margins of the company. Weak financial capital structure and debt protection metrics: The capital structure of the firm is weak and has been constantly deteriorating during past three financial years ended FY16 (Prov.). The overall gearing of SBTC deteriorated from 3.47x as on March 31, 2014 to 3.65x as on March 31, 2015 and further to 4.56x as on March 31, 2016 (Prov.) on account of increase in debt levels due to increase in working capital utilization coupled with increase in unsecured loans from the related parties. The Total Debt/GCA has been weak over the years, however, improved from 77.55x as on March 31, 2014 to 69.04x as on March 31, 2015 due to marginal increase in GCA levels. However, the same deteriorated to 82.29x as on March 31, 2016 (Prov.) due to increase in debt levels during the year. Interest coverage ratio declined during FY15 and FY16 due to increased debt level, particularly working capital utilization. Seasonal nature of availability of raw material resulting in working capital intensive nature of operations Cotton in India is grown mainly during two major agricultural season Kharif (June to September) and Rabi (November to April). The millers have to stock enough raw cotton by the end of the each season as the price and quality is better during the harvesting season. Moreover, the raw cotton is procured from the farmers and CCIL generally against cash payments or with a minimal credit period of 15-30 days while the millers have to extend credit to the associate company (Vantage Spinners Private Limited) and other clients around 30 days resulting in moderate dependence on working capital utilization. Furthermore, as the firm operates in cotton industry, it has to maintain average inventory of around 60-90 days considering the fluctuations in the price of raw cotton. The average utilization of fund based working capital limits of the firm was utilized (70%) during the last 12 months period ended April 30, 2016. Key Rating Strengths Experience of promoter for more than five years in cotton trading industry: SBTC was promoted by Mrs. Potluri Sitaratnam, who is a first generation entrepreneur and is having more than 5 years of experience in the field of cotton lint and cotton yarn traders. Through her experience in cotton industry, she has established healthy relationship with the key suppliers, customers and also with the dealers which facilitates the trading business among the various regions. Adequate raw material availability due to geographical advantage SBTC is located in the Krishna district in Andhra Pradesh which is close to Guntur, one of the major cotton growing areas in Andhra Pradesh and it is also well connected to Warangal and Khammam which are prominent cotton growing region in Andhra Pradesh, thus there is ample availability of raw material. Cotton is a seasonal crop and available only during the period of October to April. Stable industry outlook The cotton and textile industry is expected remain stable in FY17 which is led by stable spinning margins of cotton yarn segment, range-bound cotton prices and favourable domestic and export demand for downstream fabrics and garments sector. Stability of cotton prices depends upon global factors such as China's strategy on releasing its cotton inventories and domestic factors such as cotton production and inventory policy of government procurement agencies. Similarly, an improvement in realisations of manmade yarn, and consequently margins would lead to a revision in the outlook for the synthetic textile sector. On the supply side, the cotton cultivation is not expected to get affected by the decline in the domestic price as the cotton cultivation remains attractive to the farmers the profit per quintal for cotton remains high amongst the competing crops. However, even if the domestic cotton production declines by up-to around 15% to around 33 million bales, the domestic cotton position will remain adequate at around 1-2 month of consumption which will keep the cotton stocks comfortable and prices range-bound. Sri Balaji Trading Corporation (SBTC) was promoted by Mrs. Potluri Sitaratnam in year 2011 as a sole proprietorship firm. SBTC is engaged in trading of cotton lint and cotton yarn. The firm primarily supplies cotton lint to one of its group companies; Vantage Spinners Private Limited (VSPL) [rated CARE B+ as on February 22, 2016], which is engaged in manufacturing of cotton yarn and has an installed capacity of 31,500 spindles and also to other spinning units located in Krishna District, Andhra Pradesh. Further, SBTC has diversified the supplies of cotton lint to cotton manufacturing units in the major cotton growing region situated in Andhra Pradesh, Tamil Nadu, Telangana and Kerala. In FY16(prov), SBTC had a Profit after Tax (PAT) of INR0.08crore on a total operating income of INR32.32 crore, as against PAT and TOI of INR0.07 crore and INR35.11 crore, respectively, in FY15. SUN STEEL: Ind-Ra Migrates BB- Issuer Rating to Non-Cooperating --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Sun Steel Industries Private Limited'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 BB- (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR60 mil. Fund-based limits migrated to non-cooperating category with IND BB- (ISSUER NOT COOPERATING) rating; and -- INR115 mil. Non-fund-based limits migrated to non-cooperating category with IND A4+ (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on February 2, 2018. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Sun Steel Industries was incorporated by Mr. R.K. Sharma in 1973. The company is engaged in the fabrication and erection of transmission towers in West Bengal, Assam, and other north-eastern states. SSIPL is also engaged in the trading of iron products. SVERA AGRO: CARE Assigns B+ Rating to INR15cr LT Loan ----------------------------------------------------- CARE Ratings has assigned rating to the bank facilities of Svera Agro Limited (SAL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Bank Facilities 15.00 CARE B+; Stable Assigned Detailed Rationale and key rating drivers The rating assigned to the bank facilities of SAL is constrained by its small scale of operations with low net worth base & low profitability margins and weak solvency position. The rating is further constrained by exposure to raw material price volatility, funding risk and execution risk associated with the project and company's presence in highly competitive and fragmented industry. The ratings, however, derive strength from experienced promoters and moderate liquidity position. Going forward, the ability of the company to improve its scale of operations while improving its profitability margins and overall solvency position and ability of the company to complete its project on time and within cost estimates would remain the key rating sensitivity. Detailed description of the key rating drivers Key Rating Strengths Experienced promoters in the food and food products industry SAL was incorporated in 1996 as a public limited company however, the operations started in April 2017. It is currently being looked after by Mr. Sukhwant Singh, Ms. Harpreet Kaur and Mr.Mahiner Singh Malhotra as directors. The directors have a total work experience ranging from two decades to three decades in the food products industry which they have gained through SAL and group concern - Bawa Masala Company Private Limited and other regional entities. This has led to management's better understanding of the market and establishment of strong relationships with suppliers as well as customers. Moderate liquidity position: The average operating cycle of the company stood short at 5 days for FY18. The company maintains inventory in the form of raw material to ensure smooth production process and finished goods to meet the demands of the customers timely resulting into average inventory period of 45 days for FY18. The company generally sells its goods on cash basis, however, to some of the customers, credit period of around one month is provided which resulted in average collection period of 2 days for FY18. On the supplier side, the company receives a payment period of one to two months resulting into average creditor period of 41 days for FY18. Further, the free cash and bank balance stood at INR1.91 crore as on March 31, 2018. Key Rating Weaknesses Small scale of operations with low net worth base and low profitability margins: Owing to first year of operations, the scale of operations of the company stood low marked by total operating income (TOI) of INR30.96 crore in FY18 and net worth base of INR1.63 crore as on March 31, 2018. Furthermore, gross cash accruals stood relatively low at INR0.45 crore in FY18. The small scale limits the financial flexibility of the company in times of stress and deprives it of scale benefits. The company achieved sales of INR27.00 crore in 9MFY19 (Prov.). Further, the PBILDT margin and PAT margin of the company stood low at 1.90% and 0.67% respectively in FY18 owing to company's presence in highly competitive and fragmented nature of industry. Weak solvency position: The capital structure of the company stood leveraged marked by overall gearing ratio of 3.31x as on March 31, 2018 on account of dependence upon external borrowings to finance the various requirements of the company Further, the total debt to GCA ratio stood weak at 11.95x for FY18. However, interest coverage ratio stood comfortable at 20.34x in FY18. Funding risk & Execution risk: The total cost of setting up the unit is approx. INR15.00 crore. As on date, INR7.00 crore has been incurred on the project through working capital borrowings and current liabilities. The project will be fully operational by April'19. Term loan of INR10.00 crore is yet to be sanctioned. Therefore, the company is exposed to funding risk as well as execution risk. Presence in highly competitive industry with susceptibility of its margins to volatile raw material prices: The highly localized nature of Indian food processing industry has increased its fragmentation. Further, due to the ever increasing size of the Indian middle class, MNCs have been trying to penetrate and expand their market share, by way of innovative strategies like competitive pricing, aggressive advertisement campaign, celebrity endorsements and others, thereby increasing the competition. The raw materials are agro-commodities. The prices of such raw materials are highly fluctuating in nature, as seasonality affects the availability and prices to a large extent. Further due to competitive intensity, the ability of SAL to pass-on the entire increase in cost to its customers remains limited and creates pressure on its profitability. The entity based in New Delhi, was incorporated in 1997 as a public limited company. However, the operations stated in April 2017. The company is currently being managed by Mr. Sukhwant Singh, Ms. Harpreet Kaur and Mr. Mahinder Singh Malhotra. SAL is engaged in manufacturing, processing, grinding and blending of spices at its manufacturing facility located in Sonipat, Haryana with a total installed capacity of manufacturing 6260 tonne per annum as on December 31, 2018. The product line includes all types of spices like Chaat Masala, Garam Masala, Chana Masala, etc. It sells the blended spices under the brand name - NARPA. Besides SAL, the directors are also associated with the group concern - Bawa Masala Company Private Limited, which is into similar business since 1993. THERMO PRODUCTS: CARE Moves D Rating to Not Cooperating Category ---------------------------------------------------------------- CARE Ratings has migrated the rating on bank facilities of Thermo Products Private Limited (TPPL) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term 5.33 CARE D; Issuer Not Cooperating; Facilities Based on best available information Short Term 0.50 CARE D; Issuer Not Cooperating; Facilities Based on best available information CARE has been seeking information from TPPL to monitor the ratings vide e-mail communications/letters dated October 4, 2018, October 16, 2018, December 6, 2018 and numerous phone calls. However, despite CARE's repeated requests, the firm 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 best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The rating on TPPL's bank facilities and/or instruments 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 ratings take into account the ongoing delays in servicing of interest and principal on the term loan availed by the Company. Detailed description of the key rating drivers At the time of last rating on December 7, 2018, the following were the rating strengths and weaknesses Key Rating Weakness Delay in debt servicing obligations: As per the interaction with the banker, there are ongoing delays in repayment of principal and interest portion of term loan. Timely repayment of debt is the key rating sensitivity. Pune (Maharashtra) based TPPL, incorporated in 2004 is promoted by Mr. Mukesh Agarwal and Mr. Omprakash Agarwal. The company is engaged in the manufacturing of packaging material viz. EPS (Expanded Polystyrene or Styrofoam popularly known as thermocol) buffers at its manufacturing facility located at Sanaswadi, Pune with an installed capacity of 3000 metric tonne per annum. EPS buffers, manufactured by TPPL find application in the packaging of consumer durable goods. TPPL is a part of the Prakash group of companies which is engaged in the manufacturing of packaging material for more than three decades through other group companies "Prakash Corrugated Pune Private Limited" and "Shree Bhagwan Tubes & Containers Private Limited". TIRUMALA DALL: CARE Moves B+ Rating to Not Cooperating Category --------------------------------------------------------------- CARE Ratings has migrated the rating on bank facilities of Tirumala Dall Udyog (TDU) to Issuer Not Cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Bank 7.00 CARE B+; Stable, Issuer Not Facilities Cooperating; Based on best Available Information CARE has been seeking information from TDU to monitor the ratings vide e-mail communications/letters dated October 4, 2018, November 14, 2018 and December 18, 2018 and numerous phone calls. However, despite CARE's repeated requests, the firm 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 best available information which however, in CARE's opinion is not sufficient to arrive at a fair rating. The rating on TDU's bank facility and will now be denoted as CARE B+; Stable, 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 ratings take into account the small scale of operations with thin profit margins, leveraged capital structure and weak debt service coverage indicators. The rating is further constrained by working capital intensive nature of operations, vulnerability to fluctuation in raw material prices along with its presence in highly fragmented and regulated industry and constitution of entity as a proprietorship firm limiting financial flexibility in times of stress. The rating, however, derives strength from long experience of the promoter with long track record of operations, locational advantage emanating from proximity to raw material and support from group with presence in related businesses. Detailed description of the key rating drivers At the time of last rating on December 5, 2017 the following were the rating strengths and weaknesses. Key Rating Weaknesses Small scale of operations with thin profit margins: The operations of the entity remained small with total operating income of INR38.98 crore in FY17 and low networth base of INR1.38 crore as on March 31, 2017 thus limiting financial flexibility of the entity in times of stress. Moreover, by being in the business of processing of pulses, entailing low value additions, the entity's profitability margins stood low. Leveraged capital structure with weak debt service coverage indicators: The relatively low net worth base of the entity led to increased reliance on working capital borrowings and unsecured loans to support its business operations, hence resulting in leveraged capital structure. Moreover, with low profitability and high debt profile, the debt coverage indicators of the entity remained weak. Working capital intensive nature of business: Operations of the entity remained working capital intensive with high gross current assets of 97 days in FY17 owing to high inventory period. The working capital requirements are met by the cash credit facility availed by the entity utilization of which remained high. Vulnerability to fluctuation in raw material prices: Agro-based industry is characterized by its seasonality, as it is dependent on the availability of raw materials, which further varies with different harvesting periods. Availability and prices of agro commodities are highly dependent on the climatic conditions. Adverse climatic conditions can affect their availability and lead to volatility in raw material prices. Presence in highly fragmented and regulated industry: The competitive nature of agro-product processing industry due to low entry barriers, high fragmentation and the presence of a large number of players in the organized and unorganized sector translate in inherent thin profitability margins. Further, the raw material prices are regulated by government to safeguard the interest of farmers, which in turn limits the bargaining power of the millers. Constitution as a proprietorship firm limiting financial flexibility: TDU, being a proprietorship concern, is exposed to inherent risk of proprietor's capital being withdrawn at times of personal contingency and limited ability to raise capital. Moreover, poor succession planning may result in dissolution of firm. Key Rating Strengths Experienced proprietor with long track record of operations: TDU is currently managed by Mrs. Vijayalaxmi Bholla. She is well- versed with the intricacies of the business on the back of about one and a half decades of experience in agro based industries through the associate concerns. She looks after the overall function of the firm and is ably supported by a team of qualified professionals. Long experience of the proprietor has supported the business risk profile of the entity to a large extent. Further, the firm is in the business since past one and a half decade, which resulted in establishing good relationship with its customers and suppliers. Locational advantage emanating from proximity to raw material: TDU's unit has close proximity to local grain markets of Nagpur, major raw material procurement destinations for the entity. Furthermore, the plant is having good transportation facilities and other requirements like good supply of power, water etc. Accordingly, TDU has locational advantage in terms of proximity to raw material and connectivity. Support from group with presence in related businesses: The firm belongs to a group of seven entities managed by Mr. Ramanrao Bholla and Mrs. Vijayalaxmi Bholla. Furthermore, TDU benefits from the marketing and distribution network of its various group entities and extensive experience and established relations of its proprietors. Nagpur based, TDU was established in March 27, 2003 and is promoted by Vijayalaxmi Bholla. TDU is engaged in processing of pulses (chana dal and daliya) with its processing facility located at Nagpur, Maharashtra. Apart from this, the entity is also into trading of food grains (around 10-15% of total operating income). The entity procures the raw material from farmers during the peak season while during the off season it procures raw material from domestic suppliers based in Nagpur, Chikli, etc. and further sells the finished products in the domestic market. VADALIA FOODS: Ind-Ra Migrates B Issuer Rating to Non-Cooperating ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has migrated Vadalia Foods' 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 actions are: -- INR70 mil. Fund-based working capital limit migrated to non- cooperating category with IND B (ISSUER NOT COOPERATING)/ IND A4 (ISSUER NOT COOPERATING) rating; and -- INR171 mil. Term loan due on September 2021 to May 2023 migrated to non-cooperating category with IND B (ISSUER NOT COOPERATING) rating. Note: ISSUER NOT COOPERATING: The ratings were last reviewed on February 2, 2018. Ind-Ra is unable to provide an update, as the agency does not have adequate information to review the ratings. COMPANY PROFILE Established in July 2013, Gujarat-based Vadalia Foods is engaged in food processing and manufacturing of packaged snacks. The firm's partners have around two decades of experience in cotton trading and ginning, cement manufacturing, laminates manufacturing, etc. ==================== N E W Z E A L A N D ==================== MAHANA ESTATE: Assets Sold to Booster for Undisclosed Price ----------------------------------------------------------- Jamie Gray at NZ Herald reports that Wellington-based financial services firm Booster and Nelson's Seifried Estate have bought most of the assets of winery and tourism business Mahana Estate, which went into receivership last year. The sale price was not disclosed, the report says. Mahana was placed in receivership last September when a previous sale fell through and a stoush between shareholders spiraled into litigation. The Herald reported at the time angry scenes between Mahana director Glenn Schaeffer and two Las Vegas businessmen and casino owners, James Murren and Daniel Lee. This turned into a lengthy court battle, which resulted in Mr. Schaeffer being ordered to pay US$2.3 million. The Herald relates that Booster has also bought Mahana Estate's Upper Moutere 2,589 square metre four-level winery, which is capable of crushing 600 tonnes of grapes annually and is sustained by its own on-site cellaring facility and bottling plant, estate agent Bayleys said in a statement. The acquisition includes Mahana's cellar door tasting room and retail outlet, which also operates as restaurant, the report says. A lodge featuring three residences capable of accommodating 14 guests at a time within the Mahana winery estate is still being marketed for sale, according to the Herald. The two winery asset sales were brokered by viticulture and winery specialist Mike Poff of Bayleys Marlborough. The Herald says the property went on sale after it was tipped into receivership in September after struggling for three years with a lawsuit brought by Las Vegas casino moguls against its sole director and majority shareholder, Glenn Schaeffer. "It has been particularly encouraging to see the Mahana Estates' assets bought back into New Zealand domiciled ownership from their previous North American proprietor structure," the report quotes Mr. Poff as saying. Bayleys was in talks with a number of commercial accommodation providers who had previously expressed interest in solely acquiring Mahana's lodge assets, the report relates. "It has been a delicate process managing the sell-down of the various Mahana real estate and business assets in a strategic programme delivering the best possible returns for the receiver Korda Mentha and the various creditors. But there is one more piece of the jigsaw to go," Mr. Poff, as cited by the Herald, said. About Mahana Estates Nelson-based vineyard and hospitality provider, Mahana Estates (previously Woollaston Estates), set in the hills above Nelson, has been operating for 18 years as an established, vertically integrated winery and includes 30 hectares of mixed grape vineyards, state of the art gravity flow winery and bottling plant, cellar door, restaurant and event space. The company was placed into receivership on Sept. 28, 2018. KordaMentha partners, Brendon Gibson and Natalie Burrett have been appointed Receivers. Receivers last year said the business owed about $20 million to a related company that developed the vineyard and winery, the Herald discloses. Rabobank was also owed $3.2 million, the receivers from KordaMentha said. Trade creditors are owed a further $223,000 and employees are claiming $41,696. ================ S R I L A N K A ================ SRI LANKA TELECOM: Fitch Withdraws B IDR for Commercial Reasons --------------------------------------------------------------- Fitch Ratings has affirmed Sri Lanka Telecom PLC's Long-Term Foreign- and Local-Currency Issuer Default Ratings at 'B'. The Outlook is Stable. The agency has simultaneously withdrawn the ratings for commercial reasons. The ratings were withdrawn with the following reason for Commercial Purposes KEY RATING DRIVERS Ratings Constrained by Sovereign: Prior to the withdrawal, SLT's IDRs were constrained by Sri Lanka's IDRs of 'B' as per Fitch's Government-Related Entities Rating Criteria, as the state holds a majority stake in SLT directly and indirectly, and exercises significant influence on its operating and financial profile. SLT's second-biggest shareholder, Malaysia's Usaha Tegas Sdn Bhd at 44.9%, has no special provisions in its shareholder agreement to dilute the government's significant influence over SLT. Strong State Linkages: Fitch sees SLT's status, ownership and control by the Sri Lankan sovereign as 'Strong'. The state's ownership gives it significant influence over operating and financial policies. Fitch views the support record and expectations for the likelihood of state support for SLT as 'Strong', given its strategic importance in expanding the country's fibre infrastructure. Historically, SLT has not required tangible financial support due to its healthy financial profile. State's Incentive to Support: Fitch sees the socio-political implications of a default by SLT as 'Moderate' due to the presence of three other privately owned telcos. However, it could affect the fixed-line market because SLT acts as a policy company to invest in fibre networks across the island to support the government's vision of fibre-based internet for all households. Fitch also sees the financial implications of a default as 'Strong', as a financial default by SLT may have an impact on the availability and cost of financing options for other government- related entities. High Capex, Negative FCF: Fitch expects SLT to have negative free cash flow (FCF) during 2019-2020 (estimated 2018 negative FCF of LK2 billion-3 billion) as cash flow from operations may be insufficient to fund large capex plans to expand the fibre infrastructure and 4G mobile networks. Fitch expects SLT's 2019 capex to remain high, at around 28%-30% of revenue (2018 estimated: 30%), as it aims to complete its 4G population coverage to around 95% by end-2019. However, managment expects its capex/revenue to decline to around 18%-20% in 2019. Fitch expects SLT to continue to invest in expanding fibre coverage as it aims to connect about 1 million homes by 2020-2021, from the 70,000 homes currently enabled. SLT would typically need to lay fibre for at least 2 million homes for half of the households to be connected. Fitch expects SLT's fibre investments to have low returns due to the country's low broadband tariffs. Dividends are likely to remain around LKR1.6 billion-1.8 billion in the next two to three years. Data-Driven Growth: Fitch expects revenue to grow by a mid-single- digit percentage during 2019-2020 (barring any tax shocks), driven by data and fixed-broadband growth. Fitch expects 4G smartphone penetration to improve from the current 25% with the proliferation of cheaper Chinese phones. Revenue rose strongly by 6.5% in the first nine months of 2018, driven by fixed-broadband and mobile usage after a temporary usage slump in 2017 due to higher taxes on voice and data. Fitch expects the government's recent announcement on the removal of floor rates for voice call charges to have only a limited impact on growth. Industry Consolidation: Fitch believes the recently announced merger between Hutchison Telecommunications Lanka (Private) Ltd and Etisalat Lanka (Private) Ltd is likely to relieve some competitive pressures that have undermined telecom companies' revenue and EBITDA growth in recent years. The merger is pending regulatory approval. Industry consolidation is likely to provide some relief from pricing pressure, especially in the data segment where telcos have not been able to fully capture the strong growth in data traffic. Stable Sector Outlook: Fitch's outlook for the Sri Lankan telco sector is stable as Fitch expects the mean net leverage for SLT and mobile market leader, Dialog Axiata PLC (AAA(lka)/Stable), to remain stable at around 1.4x in 2019. Fitch expects the sector's cash generation to improve, driven by higher mobile and broadband data usage, which will be insufficient, however, to fund the large capex requirement, leading to negative FCF. Fitch also expects average operating EBITDAR margins to remain stable at around 34% (2018 estimate: 34%), driven by improving economies of scale in the data and home broadband segment, offsetting the negative impact of the changing revenue mix. DERIVATION SUMMARY SLT's 'BB' standalone credit profile, assessed by Fitch prior to the rating withdrawal, is stronger than that of its owner, reflecting the company's market-leading position in fixed-line services and second-largest position in mobile, along with its ownership of an extensive optical-fibre network. The standalone profile is also underpinned by its mid-single-digit percentage growth prospects, moderate estimated 2018 FFO adjusted net leverage of 1.7x and stable operating EBITDAR margin. SLT has lower exposure to the crowded mobile market and more diverse service platforms than Dialog. However, Dialog has a larger revenue base, better operating EBITDAR margins, lower forecast FFO adjusted net leverage and a better FCF profile than SLT. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - Revenue to grow by the mid-single-digit percentage, driven by fixed-broadband and mobile-data services in 2018-2019. - Capex/revenue to remain high at around 28%-30% as SLT expands its fibre and 4G network. - Operating EBITDAR margin to remain stable at around 29%-30%. - Effective tax rate of 28%. - Dividend payout of LKR1.6 billion-1.8 billion per year. RATING SENSITIVITIES No longer relevant as the ratings have been withdrawn. ********* 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 2019. All rights reserved. ISSN: 1520-9482. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is US$775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000. *** End of Transmission ***