/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/201009.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, October 9, 2020, Vol. 23, No. 203 Headlines A U S T R A L I A BLACKWOOD BISTRO: First Creditors' Meeting Set for Oct. 15 BLACKWOOD BISTRO: Orana Restaurant Placed Into Administration CREW ON DECK: First Creditors' Meeting Set for Oct. 16 SAMSON OIL: Moss Adams LLP Dismissed as Accountants C H I N A AGILE GROUP: Moody's Rates Proposed USD Notes 'Ba3' I N D I A A.K. DAS: Ind-Ra Cuts LongTerm Issuer Rating to B+, Outlook Stable ADINATH SILKS: ICRA Lowers Rating on INR35cr LT Loan to B+ ADYAR GATE: ICRA Reaffirms B Rating on INR235.60cr LT Loan ANANGOOR TEXTILE: ICRA Withdraws B+ Rating on INR38cr LT Loan ANANTHA PVC: ICRA Moves B Debt Rating to Not Cooperating CAMEX LIMITED: Ind-Ra Cuts LT Issuer Rating to BB, Outlook Stable CLASSIC COTTON: ICRA Keeps B+ Debt Rating in Not Cooperating CREDO LIFE: ICRA Lowers Rating on INR22cr Loans to B+ DELITE CABLES: ICRA Keeps D Debt Ratings in Not Cooperating GRIPWELL FORGING: ICRA Keeps B+ Debt Rating in Not Cooperating GSR TEXTILES: ICRA Keeps D Debt Ratings in Not Cooperating HEATH VIEW: ICRA Keeps B Debt Rating in Not Cooperating Category IL&FS: In Talks with GAIL, US Fund for Stake in ONGC Tripura Power JAIN IRRIGATION: Fitch Withdraws 'RD' LT IDR on Insufficient Info JANA CAPITAL: Ind-Ra Affirms B+ NCDs Rating, Outlook Stable JANA HOLDINGS: Ind-Ra Affirms B+ NCDs Rating, Outlook Stable JONNA IRON: ICRA Withdraws B+ Rating on INR17cr Cash Loan KASTURI COMMODITIES: ICRA Keeps D Debt Ratings in Not Cooperating KRISHNA CONSTRUCTIONS: ICRA Moves B+ Rating to Not Cooperating MAHESH ELECTRICAL: ICRA Moves B+ Debt Rating to Not Cooperating MALIK MOTORS: ICRA Moves B Debt Ratings to Not Cooperating MARIGOLD PAINTS: ICRA Keeps B+ Debt Rating in Not Cooperating MARTCO EXPORT: ICRA Moves B Debt Ratings to Not Cooperating N S VAISHNO: ICRA Lowers Rating on INR12.50cr LT Loan to B+ NANDI IRRIGATION: ICRA Moves B Debt Rating to Not Cooperating NEW ASIAN: ICRA Reaffirms B Rating on INR11cr Loans OMKAR FABRICS: ICRA Keeps B Debt Ratings in Not Cooperating POLYSOL INDUSTRIES: ICRA Withdraws B+ Rating on INR2cr Loan PRASAD AGRICO: ICRA Moves B+ Debt Ratings to Not Cooperating RANKAS TEXFAB: Ind-Ra Moves B+ LT Issuer Rating to Non-Cooperating RATNAAKAR SHELTERS: ICRA Reaffirms B+ Rating on INR50cr Loans REDDY PHARMACEUTICALS: ICRA Cuts Rating on INR10cr Loan to C SIEWERT AND DHOLAKIA: ICRA Cuts Rating on INR6.24cr Loan to B+ SITARAM INDIA: ICRA Lowers Rating on INR20cr Cash Loan to B+ STERLING AND WILSON: Ind-Ra Cuts Long Term Issuer Rating to 'BB+' STERLING GENERATORS: Ind-Ra Cuts Long Term Issuer Rating to 'BB+' SUPERIOR FILMS: Ind-Ra Cuts LT Issuer Rating to BB/Not Cooperating SURAT WOVENSACKS: ICRA Keeps B+ Debt Ratings in Not Cooperating VENKATESWARA RICE: ICRA Keeps D Debt Ratings in Not Cooperating VERTEX TECHNO: ICRA Lowers Rating on INR3.50cr LT Loan to B+ J A P A N ALL NIPPON: Plans Salary Cuts, No Winter Bonuses [*] JAPAN: Coronavirus-Linked Business Failures Reach 600 P H I L I P P I N E S FORSAGE AND FORSAGE: SEC Orders Shutdown of 'Gullibility' Scheme S I N G A P O R E ALPHA ENERGY: Auditor Issues Disclaimer of Opinion INTER-PACIFIC PETROLEUM: Cordlife Chair Steps Down as JM Sue S R I L A N K A ABANS FINANCE: Fitch Places 'BB+(lka)' Rating on Watch Evolving - - - - - ================= A U S T R A L I A ================= BLACKWOOD BISTRO: First Creditors' Meeting Set for Oct. 15 ---------------------------------------------------------- A first meeting of the creditors in the proceedings of Blackwood Bistro Pty Ltd, trading as Bistro Blackwood, and The Living Room Bar Pty Ltd, trading as Restaurant Orana, will be held on Oct. 15, 2020, at 11:00 a.m. at Level 7, 151 Pirie Street, in Adelaide, SA. David William Kidman and Martin David Lewis of KPMG were appointed as administrator of Blackwood Bistro on Oct. 5, 2020. BLACKWOOD BISTRO: Orana Restaurant Placed Into Administration ------------------------------------------------------------- Mary Mrad at Daily Mail Australia reports that MasterChef Australia judge Jock Zonfrillo had put his restaurant Orana into voluntary administration one day before permanently closing its doors on Oct. 6. Daily Mail relates that the 44-year-old appointed accountants KPMG to The Living Room Bar Pty Ltd and Blackwood Bistro Pty Ltd, which were the two companies involved in the operation of Orana, on Oct. 5. 'Even though we're up to date with paying staff their leave, redundancies and super, and all our lodgements with the ATO, we decided it was in the best interests of all parties involved to appoint KPMG as voluntary administrators,' Jock told The Advertiser. 'KPMG have started the process and we expect that the process will be finalised over the coming months.' KPMG partners David Kidman and Martin Lewis were appointed as voluntary administrators 'over the entities that previously operated the Orana and Bistro Blackwood restaurants'. Voluntary administration is the process where a restaurant or company is placed in the hands of a financial expert who accesses all possible options. On Oct. 6, Jock announced he'd made the difficult decision to permanently close Orana after temporarily closing its doors in March due to the coronavirus pandemic, Daily Mail relays. 'In our seven years, Restaurant Orana has moved through moments of despair, perseverance, and celebration. We got a lot wrong but we also got a lot right,' he wrote on Facebook. 'We achieved more than ever thought possible and feel privileged to have scored a few accolades along the way.' He added: 'Like all of my hospo mates around the world, COVID closed our doors. For us, with our lease ending in a couple of months and the current restrictions meaning we can't break even, our closure has become permanent.' 'As we packed up our little restaurant back in March, with ex-staff coming in to help out the team, we had no idea how long this thing would last for, none of us thought it would mean the end,' Jock, as cited by Daily Mail, wrote. 'With the uncertainty of tourism and hospitality it's not the right time for Orana 2.0 so the plans we had started discussing have been put on ice. My journey doesn't stop here - I'll continue trying to make a difference through food projects outside of the restaurant.' CREW ON DECK: First Creditors' Meeting Set for Oct. 16 ------------------------------------------------------ A first meeting of the creditors in the proceedings of Crew on Deck Pty Ltd, trading as Elect Cleaning & Facility Services, will be held on Oct. 16, 2020, at 10:30 a.m. at the offices of Jirsch Sutherland, Level 27, 259 George Street, in Sydney, NSW. Trent Andrew Devine and Peter John Moore of Jirsch Sutherland were appointed as administrators of Crew on Deck on Oct. 6, 2020. SAMSON OIL: Moss Adams LLP Dismissed as Accountants --------------------------------------------------- Adam Paul Nikitins and Samuel John Freeman ("the Administrators") of EY, Level 23 Exhibition Street, Melbourne VIC 3000, Australia, were appointed joint and several voluntary administrators of Samson Oil & Gas Limited by the Company's directors. The Company's directors resolved to appoint administrators based on their determination that the Company is likely to become "insolvent" at some future time pursuant to section 436A(1) of the Australian Corporations Act 2001 (Cth). Pursuant to section 435A of the Corporations Act, the object of voluntary administration is to provide for the business, property and affairs of an insolvent company to be administered in a way that (a) maximises the chances of the company, or as much as possible of its business, continuing in existence; or (b) if it is not possible for the company or its business to continue in existence--results in a better return for the company's creditors and members than would result from an immediate winding up of the company. In light of the above, given the possibility that the Company will not continue in existence following the voluntary administration process and in an effort to preserve value for creditors, the Administrators dismissed the Company's independent accountants, Moss Adams LLP, effective Sept. 14, 2020. The reports of Moss Adams on the financial statements of the Company for fiscal years ending June 30, 2019 and June 30, 2018, did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles, except that the audit report of Moss Adams on the Company's financial statements for the fiscal year ended June 30, 2019 and June 30, 2018, contained an explanatory paragraph indicating that there was substantial doubt about the ability of the Company to continue as a going concern. During the two most recent fiscal years ended June 30, 2019 and June 30, 2018, and through the subsequent interim period preceding Moss Adams' resignation, there were no reportable events within the meaning set forth in Item 304(a)(1)(v) of Regulation S-K, except that for the fiscal year ended June 30, 2019, a material weakness existed in the Company's internal control over financial reporting, as described in Item 9A to the Company's annual report on Form 10-K for the fiscal year ended June 30, 2019, and in Item 4 of the Company's quarterly report on Form 10-Q for the quarter ended March 31, 2020, and for the fiscal year ended June 30, 2018, a material weakness existed in the Company's internal control over financial reporting, as described in Item 9A to the Company's annual report on Form 10-K for the fiscal year ended June 30, 2018. During the Company's two most recent fiscal years and the subsequent interim period preceding Moss Adams' dismissal, the Company was not in any disagreement with Moss Adams on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreement, if not resolved to the satisfaction of Moss Adams, would have caused it to make reference to the subject matter of the disagreement in connection with its report. The Administrators have not appointed a successor accountant. About Samson Oil Headquartered in Perth, Western Australia, Samson Oil & Gas Limited -- http://www.samsonoilandgas.com/-- is an independent energy company primarily engaged in the acquisition, exploration, exploitation and development of oil and natural gas properties, primarily with a focus in Montana and North Dakota. Samson Oil reported a net loss of $7.15 million for the fiscal year ended June 30, 2019, compared to a net loss of $6.04 million for the fiscal year ended June 30, 2018. As of March 31, 2020, the Company had $44.06 million in total assets, $52.64 million in total liabilities, and a total stockholders' deficit of $8.58 million. Moss Adams LLP, in Denver, Colorado, the Company's auditor since 2017, issued a "going concern" qualification in its report dated Oct. 15, 2019, citing that the Company is in violation of its debt covenants, incurred a net loss from operations, has cash outflows from operations, and its current liabilities exceed its current assets as of and for the year ended June 30, 2019. These conditions raise substantial doubt about the Company's ability to continue as a going concern. ========= C H I N A ========= AGILE GROUP: Moody's Rates Proposed USD Notes 'Ba3' --------------------------------------------------- Moody's Investors Service has assigned a Ba3 senior unsecured rating to the USD notes to be issued by Agile Group Holdings Limited (Ba2 negative). Agile plans to use the proceeds from the proposed notes to refinance existing offshore debt due within one year. RATINGS RATIONALE "Agile's Ba2 corporate family rating (CFR) reflects the company's strong market position and solid track record of property development in its core Guangdong and Hainan markets; its disciplined financial management; good liquidity; and improving geographic diversification," says Kaven Tsang, a Moody's Senior Vice President. "At the same time, the company's Ba2 rating incorporates its modest financial metrics and its exposure to the financial and execution risks associated with its expansion into non-property businesses," adds Tsang. Agile's Ba3 senior unsecured bond rating is one notch below its CFR because of the risk of structural subordination. This subordination risk reflects the fact that most of Agile's claims are at the operating subsidiaries and have priority over claims at the holding company in a bankruptcy scenario. In addition, the holding company lacks significant mitigating factors for structural subordination. As a result, the expected recovery rate for claims at the holding company will be lower. The proposed issuance will provide Agile with additional liquidity and lengthen its debt maturity profile, while the impact on its credit metrics will be limited because it will use the proceeds mainly to refinance existing debt. Moody's expects Agile's key financial metrics to improve in the next 12-18 months as the company continues to grow its property development business, ramp up its nondevelopment businesses and control its debt growth. Specifically, Moody's expects Agile's revenue/adjusted debt will improve toward 65% and EBIT/interest to around 3.5x over the next 12-18 months from 55% and 2.6x, respectively, for the 12 months ended June 2020. Agile's property presales rose 2.5% year on year to RMB77.7 billion in the first eight months of 2020, despite the disruption caused by the coronavirus outbreak in Q1 2020. Moody's expects its annual presales to remain largely flat at RMB115 billion-RMB120 billion in 2020 compared with RMB118 billion in 2019. This presales performance will support Agile's liquidity and revenue recognition over the next 1-2 years. Agile's liquidity is good. Its cash on hand of RMB46.4 billion as of June 2020 can cover 1.2x its short-term debt of RMB40.5 billion, up from 1.0x as of December 2019. Moody's expects Agile's cash holdings and operating cash flow will be sufficient to cover its maturing debt, committed land premiums and dividend payments in the next 12 months. In terms of environmental, social and governance (ESG) considerations, Agile's CFR takes into consideration its concentrated ownership by its key shareholder, the Chen family, which held a total 67.1% stake in the company as of June 30, 2020. The family has a track record of injecting equity, including around HKD1.6 billion to support Agile's liquidity and refinancing needs during a difficult time in 2014. Moody's regards the impact of the deteriorating global economic outlook because of the rapid and widening spread of the coronavirus pandemic as a social risk under its ESG framework, given the substantial implications for public health and safety. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING Agile's negative outlook reflects the uncertainties around the company's ability to deleverage and improve its financial metrics to levels supportive of its current rating level. An upgrade is unlikely, given the negative outlook. However, the outlook could be revised to stable if (1) Agile successfully executes its business expansion plan by meeting its presales targets and ramps up its environmental protection business; (2) maintains strong liquidity; and (3) improves its credit metrics, with revenue/adjusted debt trending to 65%-70% and EBIT/interest coverage trending to 3.0x-3.5x on a sustained basis. Moody's could downgrade the rating if (1) Agile's presales decline; (2) the company fails to ramp up its environmental protection business; or (3) it turns to a more aggressive expansion strategy in its property or non-property businesses, such that its credit metrics remain weak. Metrics Moody's would consider for a downgrade include EBIT/interest coverage failing to trend to 3.0x-3.5x or revenue/adjusted debt failing to trend back to 65%-70% over the next 12-18 months. Any signs of weakening liquidity, with cash/short-term debt consistently below 1.0x, will also hurt the rating. The principal methodology used in this rating was Homebuilding and Property Development Industry published in January 2018. Agile Group Holdings Limited is a major property developer in China, operating in the mid- to high-end segment. As of June 30, 2020, the company had a land bank with a total planned gross floor area (GFA) of 53 million square meters (sqm) in 81 cities across China, Hong Kong and overseas. ========= I N D I A ========= A.K. DAS: Ind-Ra Cuts LongTerm Issuer Rating to B+, Outlook Stable ------------------------------------------------------------------ India Ratings and Research (Ind-Ra) has downgraded A.K. Das Associates Limited's (AKDAL) Long-Term Issuer Rating to 'IND B+' from 'IND BB (ISSUER NOT COOPERATING)'. The Outlook is Stable. The instrument-wise rating actions are: -- INR 174 mil. (reduced from INR 250 mil.) Fund-based working capital limits downgraded with IND B+/Stable rating; and -- INR470 mil. (reduced from INR520 mil.) Non-fund-based working capital limits downgraded with IND A4 rating. The downgrade reflects AKDAL's poor liquidity position, a decline in revenue and the consequent deterioration in the credit metrics in FY20. KEY RATING DRIVERS Liquidity Indicator – Poor: AKDAL's average utilization of the fund-based limits was 99.50%% for the 12 months ended August 2020 with several instances of overutilization totalling to 29 days during the period. As per FY20 provisional financials, the company's working capital cycle also elongated to 231 days (FY19: 45 days), due to an increase in the inventory holding period to 239 days (61 days) and a decrease in the payable period to 153 days (227 days). The increase in inventory was on account of unbilled transaction at end-March 2020, due to the nationwide lockdown. AKDAL had cash and cash equivalents of only INR2.95 million at FYE20 (FYE19: INR6.94 million), against the debt of INR281 million (INR173 million). Its cash flow from operations turned negative to INR74 million in FY20 (FY19: INR221 million), due to the increase in the inventory. Ind-Ra expects the liquidity position to deteriorate further in FY21 owing to a likely reduction in the working capital limits from its lenders due to unavailability of drawing power. The company did not avail the Reserve Bank of India-prescribed moratorium; however, it has applied for an additional COVID-19 loan in the form of guaranteed emergency credit line amounting to INR45 million-50 million. AKDAL's revenue declined to INR591 million in FY20 (FY19: INR600 million), due to a decrease in the number of orders executed and delayed payment of work orders executed in 4QFY20, resulting from the lockdown imposed in the last week of March 2020. The agency expects to record lower revenue of around INR500 million in FY21, owing to delays in execution of a government project. The company's scale of operations remains medium. The ratings continue to factor in AKDAL's modest credit metrics with the gross interest coverage (operating EBITDA/net interest expenses) of 2.16x in FY20 (FY19: 2.34x) and the net financial leverage (adjusted net debt/operating EBITDA) of 2.31x (1.47x). The deterioration in the credit metrics was due to a rise in the interest cost to INR55 million in FY20 (FY19: INR48 million) arising from an increase in the total borrowings to INR281 million (INR173 million), partially offset by an increase in the absolute EBITDA to INR120 million (INR112 million). Ind-Ra expects the credit metrics to deteriorate further in FY21 on account of the likely lower revenue and increased utilization of the working capital limits. The ratings also factor in AKDAL's average EBITDA margin, which improved to 20.37% in FY20 (FY19: 18.82%), due to the decrease in raw material prices. The company's return on capital employed was 13.50% in FY20 (FY19: 12.93%). Ind-Ra expects the EBITDA margin to decline in FY21, due to a likely decrease in the revenue. The ratings, however, continue to be supported by the promoters' over two decades of experience in the power transmission industry. RATING SENSITIVITIES Negative: A further decline in the scale of operations, leading to deterioration in credit metrics, and/or a further deterioration in liquidity position, all on a sustained basis, will be negative for the ratings. Positive: An improvement in the liquidity position, indicated by the presence of adequate unencumbered cash and unutilized bank limits, while maintaining the credit profile, all on a sustained basis, will be positive for the ratings. COMPANY PROFILE Incorporated in 1996, Odisha-based AKDAL constructs transmission lines and substations, and related electrical and civil works. The company is promoted by Amiya Kanta Das, Sovarani Das and Pranati Das. ADINATH SILKS: ICRA Lowers Rating on INR35cr LT Loan to B+ ---------------------------------------------------------- ICRA has revised the rating on the bank facilities of Adinath Silks Private Limited (Erst Adinath Silks Limited) (ASPL) to "[ICRA]B+ (Stable); ISSUER NOT COOPERATING" and moved to the non-cooperating category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term-Fund 35.00 [ICRA]B+ (Stable); ISSUER NOT Based/CC COOPERATING; Rating downgraded from [ICRA]BB+ (Stable) and moved to the 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Incorporated in 2016, ASPL is involved in the trading of raw silk, silk fabrics and silk saris. Initially, incorporated as a proprietorship concern by Mr. Rasiklal K Shah, the company has been in existence since 1959. The proprietorship entity was converted into Adinath Silks Limited (public limited company) in 2002 and further converted into Private Limited in June 2016. The product profile of ASPL comprises various silk fabrics such as chiffon, taffeta, georgette, dupion and plain silk. The company also trades in silk saris on order basis. ASPL procures yarn and silk fabrics from small-scale weavers located in and around Bangalore which are then sold to wholesalers and semi-wholesalers predominantly in Bangalore. ADYAR GATE: ICRA Reaffirms B Rating on INR235.60cr LT Loan ---------------------------------------------------------- ICRA has reaffirmed ratings on certain bank facilities of Adyar Gate Hotel Limited (AGHL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- LT Fund based Term Loans 235.60 [ICRA]B (Stable); reaffirmed LT Fund based facilities 45.00 [ICRA]B (Stable); reaffirmed LT Unallocated 105.40 [ICRA]B (Stable); reaffirmed ST Non-fund based 2.00 [ICRA]A4; reaffirmed Rationale The ratings reaffirmation takes into account the expected weakening in AGHL's FY2021 performance, impacted by the sharp demand drop because of the Covid-19 pandemic. The extended pan-India lockdown since March 24, 2020 has resulted in a sharp fall in occupancy levels for the company, with two properties - InterContinental Mahabalipuram Beach Resort, Chennai (ICMBR) and Fortune Hotel Sullivan Court in Ooty (Fortune Sullivan)—remaining closed since March 17, 2020 till August 31, 2020. The Crowne Plaza Chennai Adyar Park (Crowne Plaza) was not open for retail bookings from March 24, 2020 till August 31, 2020 and had marginal occupancy from the long-stay guests. With demand hitting all-time lows and start of the recovery being a few quarters away, contingent upon a cure or vaccine, ICRA expects AGHL to witness a sharp fall in the revenues, resulting in operating and net losses in FY2021. AGHL's liquidity is stretched with high working capital utilisation and meagre cash balance of ~INR1.0 crore as on September 19, 2020, providing limited liquidity cushion currently. However, the company has opted for moratorium on debt servicing extended by the RBI for the period of March–August 2020 and has currently applied for loan restructuring with one of its lenders to ease its repayment burden and liquidity position to an extent. Also, the promoters are expected to infuse funds of INR55 crore in the near term to aid the company in tiding over the pandemic. However, the successful completion of restructuring remains a key monitorable. While the successful completion of the loan restructuring and fund infusion by promoters would provide immediate-term liquidity relief, the company would need incremental funding over the medium term as the demand recovery is expected to be prolonged. AGHL reported an operating income (OI) of INR138.6 crore with an operating and net margin of 16.6% and 29.5%, respectively in FY2020 (according to provisional financials). While the company reported net losses in the last six years, resulting in net worth erosion, the net profit of INR40.9 crore in FY2020 was owing to a one-time gain of INR74.5 crore from the sale of WelcomHotel Grand Bay in Vizag (concluded in July 2019). AGHL has relatively high borrowings for its scale of operations due to debt-funded capex and net losses of the past. As on March 31, 2020, the company's total debt was INR324.2 crore, comprising INR235.6 crore of long-term debt, INR45.3 crore of working capital borrowings and INR43.3 crore of unsecured loans from promoters, post debt reduction to the tune of INR100.0 crore with proceeds from the Vizag property sale. The relatively weak operating performance and high debt levels have resulted in stretched capital structure and coverage indicators with gearing, total debt/OPBDITA and interest coverage of 5.3 times, 14.1 times and 0.6 times, respectively as on March 31, 2020 (according to provisional financials). Going forward, the company is likely to post a sharp decline in revenues and operating losses for FY2021 owing to weak demand. As a result, the coverage metrics are expected to remain stretched in FY2021 as well. However, the ratings positively factor in the presence of management tie-ups with reputed brands like InterContinental Hotels Group (IHG )/ITC, locational advantage of properties in Ooty and Mahabalipuram and the established position of Crowne Plaza in Chennai. AGHL derives annual rental income of INR13.5 crore from an IT Park, which has partly helped it tide over the last five months. However, AGHL has modest scale of operations with an aggregate of 460 rooms across three properties and heavy concentration in the Chennai market (over 90% revenues), exposing it to region-specific exogenous shocks and risks. A delay in debt servicing was reported in AGHL's FY2019 audit report, where it was stated that an amount of INR0.4 crore pertaining to March 2019 was repaid on April 30, 2019. However, as confirmed by the lenders and the company, the delay was on account of technical reasons. Based on the available information, ICRA believes that the delay was not a reflection of the lack of ability or willingness of AGHL to pay its debt obligations and hence, this has not been treated as default. AGHL had sufficient liquidity buffer in the form of around INR3.4-crore unencumbered cash and bank balances (including deposits) as on March 31, 2019, which was adequate to cover the required payment of INR0.4 crore on the same date. Key rating drivers and their description Credit strengths * Rental income from IT park and proposed fund infusion to support near-term liquidity: Although AGHL primarily derives its revenues from hotel properties (90% in FY2020), 10% of its revenues are derived from an IT Park in Velachery–leased to Tata Consultancy Services (TCS)–yielding an annual rental of INR13.5 crore. While the revenues in hotels are currently weak (following the pandemic), the rental income has been fairly stable over the last several months, partly helping the company tide over the all-time hotel demand low in H1 FY2021. Also, the promoters are expected to infuse INR55 crore in AGHL in the near term to provide liquidity buffer. * Locational advantage of ICMBR and Fortune Sullivan; established position of Crowne Plaza: Two of AGHL's properties are favourably located at Ooty (Fortune Sullivan) and Mahabalipuram (ICMBR). While the first one is at a driveable distance from several South Indian cities, the latter one is on the outskirts of Chennai. While the demand from foreign tourists will remain impacted for some quarters, the hotels are likely to benefit from the growing staycation1 demand and diversion of outbound foreign travel into the country. The Crowne Plaza Chennai Adyar Park hotel remains an established property in the central business district (CBD) in Chennai. Management tie-up with established brand: AGHL's hotels operate under management contract with ITC and IHG under three brands. Two of the company's properties—ICMBR and Crowne Plaza (erstwhile Park Sheraton under management contract with ITC)—have management and marketing arrangements with IHG, while the Ooty property (Fortune Sullivan) operates under management tie-up with ITC. The hotels benefit from the global marketing and advertising network of these brands. Credit challenges * Sharp revenue decline and operating losses in FY2021 following pandemic situation: The extended pan-India lockdown since March 24, 2020 has resulted in a sharp fall in occupancy for the company, with demand declining to the lowest levels that the industry has ever witnessed. With the start of recovery likely to be a few quarters away and contingent upon a cure or vaccine, ICRA expects the company to post a sharp decline in revenues and incur operating losses in FY2021, despite several cost-saving measures. * Sizeable debt; weak capitalisation and coverage metrics: AGHL has relatively high borrowings for its scale of operations due to debt-funded capex and net losses in the past. As on March 31, 2020, the company's total debt of INR324.2 crore comprised INR235.6 crore of long-term debt, INR45.3 crore of working capital borrowings and INR43.3 crore of unsecured loans from promoters, following debt reduction to the tune of INR100.0 crore with proceeds from the Vizag property sale. The relatively weak operating performance and high debt levels resulted in stretched capital structure and coverage indicators with gearing, total debt/OPBDITA and interest coverage of 5.3 times, 14.1 times and 0.6 times, respectively as on March 31, 2020 (according to provisional financials). The coverage metrics are expected to remain weak in FY2021 as well. * Moderate scale of operations; revenue concentration in the Chennai market: AGHL has relatively moderate scale of operations, with an aggregate inventory of 460 rooms as on date and operations in two cities in South India. While the company had 564 rooms earlier, the sale of the Vizag property (with 104 keys) in July 2019 reduced its room inventory to the current levels. Also, over 90% of the company's revenues are derived from the Chennai market, exposing it to cityspecific event risks. Liquidity position: Stretched AGHL's accruals have been weak in YTD FY2021 and are expected to remain so in the next few quarters owing to muted demand following the pandemic. The company's working capital utilisation is high and it has meagre cash balance of ~Rs. 1.0 crore as on September 19, 2020, providing limited liquidity cushion. However, it has opted for moratorium on debt servicing extended by the RBI for the period of March–August 2020 and has currently applied for loan restructuring with one of its lenders to ease its repayment burden and liquidity position to an extent. Also, the promoters are expected to infuse funds of INR55 crore in the near term to aid the company in tiding over the pandemic. However, the successful completion of restructuring remains a key monitorable. Excluding the loans where restructuring has been applied, the company has INR7.0-crore interest payment obligations for H2 FY2021. While the successful completion of the loan restructuring and fund infusion by promoters would provide immediate-term liquidity relief, the company would need incremental funding over the medium term as the demand recovery is expected to be prolonged. Rating sensitivities Positive triggers – An upgrade is unlikely in the near term, given the Negative outlook on the industry owing to the expectation of severe impact of the pandemic on the travel and tourism business. Nonetheless, sustained improvement in its credit profile through significant improvement in liquidity, debt position and coverage metrics could lead to an upgrade over the medium term. Negative triggers – Negative pressure on AGHL's rating could arise from further deterioration in liquidity profile, arising from the absence of timely fund infusion by promoters or prolonged weak operating performance. Adyar Gate Hotels Limited (AGHL) is owned by the Goyal family and has a track over three decades of presence. The company has three properties in South India and its flagship property is located in the Central Business District in Chennai. The flagship property, operated under the name Sheraton Park Hotels and Towers, has a 287-room five-star hotel that has tie-ups with ITC and Starwood for using the Sheraton brand name. In July 2015, the hotel changed the brand to Crowne Plaza under the IHG umbrella. AGHL also commenced operations of a 106-room resort in Mahabalipuram under the name InterContinental Chennai Mahabalipuram Resort operated by IHG from October 2015 and Fortune Hotel Sullivan Court in Ooty with 67 rooms (managed by ITC). This apart, the company had one more hotel - WelcomHotel Grand Bay - in Vizag with 104 rooms (managed by ITC). This property was sold in July 2019 for a consideration of INR101 crore on slump sale basis. Apart from the hotels, AGHL owns ~2,50,000 square feet space in Sai Real Tech Park, an IT park in Velachery, Chennai (currently leased to TCS). AGHL also has two wholly-owned non-operational subsidiaries with land holdings in Kodaikanal, Tamil Nadu. ANANGOOR TEXTILE: ICRA Withdraws B+ Rating on INR38cr LT Loan ------------------------------------------------------------- ICRA has withdrawn the ratings on certain bank facilities of Anangoor Textile Mills Private Limited (ATMPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term-Fund 38.00 [ICRA]B+(Stable); ISSUER Based-Cash NOT COOPERATING; Withdrawn Credit Long Term-Fund 7.80 [ICRA]B+(Stable); ISSUER Based-Term Loan NOT COOPERATING; Withdrawn Rating action The long-term ratings assigned to ATMPL have been withdrawn at the request of the company and based on the No Objection Certificate received from the banker, and in accordance with ICRA's policy on withdrawal and suspension. ICRA is withdrawing the rating and that it does not have information to suggest that the credit risk has changed since the time the rating was last reviewed. ICRA has withdrawn the Stable outlook on the longterm rating. Key rating drivers and their description Key rating drivers have not been captured as the rating is being withdrawn. Liquidity Position: Not captured as the rating is being withdrawn. Rating sensitivities: Not captured as the rating is being withdrawn. Incorporated in 1995, ATMPL is involved in cotton spinning at its unit located in China Dharapuram, Tirupur district, Tamil Nadu. The installed capacity of the unit is 21,600 spindles and 5000 rotors. ATMPL is primarily produces cotton hosiery yarn of medium counts ranging from 20's to 40's variety. The company is also operating a "Windmill "(3 MV) in Tamil Nadu for in-house power consumption. ANANTHA PVC: ICRA Moves B Debt Rating to Not Cooperating -------------------------------------------------------- ICRA has moved the long-term and short-term ratings for the bank facilities of Anantha Pvc Pipes Private Limited to the 'Issuer Not Cooperating' category. The rating is now denoted as "[ICRA]B(Stable)/[ICRA]A4 ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term-Fund 8.00 [ICRA]B(Stable) ISSUER NOT Based/CC COOPERATING; Rating moved to the 'Issuer Not Cooperating' category Short Term-Non Fund Based 7.00 [ICRA]A4 ISSUER NOT COOPERATING; Rating moved to the 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of non-cooperation by a rated entity available at www.icra.in. Anantha Pvc Pipes Private Limited was founded in 2002 as a proprietorship concern which was converted to private limited company in 2006. APPPL is a part of Nandi Group of companies, promoted by Mr. Sajjala Sreedhar Reddy. The company is engaged in the business of manufacturing of rigid PVC pipes and fittings with installed capacity of 12,800 MTPA at its facilities located at Hampapuram (Andhra Pradesh). The products are widely used in irrigation, potable water supplies, construction industry, sewerage and drainage etc. Nandi group, promoted by Shri S.P.Y Reddy, is a South India based industrial house having diversified business interest such as cement, dairy, PVC pipes, construction etc. CAMEX LIMITED: Ind-Ra Cuts LT Issuer Rating to BB, Outlook Stable ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has downgraded Camex Limited's Long-Term Issuer Rating to 'IND BB' from 'IND BB+' while resolving the Rating Watch Negative (RWN). The Outlook is Stable. The instrument-wise rating actions are: -- INR150 mil. Fund-based limits Long-term rating downgraded; Short-term rating affirmed; Off RWN with IND BB/Stable/IND A4+ rating; and -- INR100 mil. Non-fund-based limits affirmed; Off RWN with IND A4+ rating. Analytical Approach: Ind-Ra continues to take a consolidated view of Camex Limited and its subsidiary Camex HK Limited as both companies operate in the same line of business. KEY RATING DRIVERS The RWN resolution reflects the restoration of supply of raw materials such as vinyl sulphur, H-acid and cyanuric from China, which was disrupted by the COVID-19 outbreak. As informed by the management to Ind-Ra, the company has been able to source raw materials from China from June 2020 without any hindrances. The downgrade reflects a decline in the consolidated revenue to INR1,319 million in FY20 (FY19: INR1,472 million), due to the disruptions caused by the COVID-19-led lockdown. This, coupled with an increase in the raw material costs in 4QFY20, caused the consolidated EBITDA margins to contract to 2.9% in FY20 (FY19: 5.0%). The company's scale of operations remains medium. The margins were modest with a return of capital employed of 6% in FY20 (FY19: 13%). The ratings continue to factor in the company's modest credit metrics. On a consolidated basis, the net leverage (total adjusted debt/operating EBITDA) improved to 0.5x in FY20 (FY19: 1.6x) and the interest coverage (operating EBITDA/gross interest expense) to 4.6x (4.1x), owing to a decline in the debt to INR26 million (INR138 million) and the consequent reduction in the interest expense to INR8 million (INR18 million). On a standalone basis, revenue decreased to INR1,225 million in FY20 (FY19: INR1,403 million) due to the disruptions caused by the COVID-19 led lockdown. The margins were modest and contracted to 2.9% in FY20 (FY19: 4.8%) on the back of an increase in other operating expenses. The credit metrics were modest with net leverage of 0.5x in FY20 (FY19: 1.9x) and interest coverage of 4.5x (3.8x). The improvement in the credit metrics was owing to a decline in the debt to INR26 million in FY20 (FY19: INR135 million) and the consequent reduction in the interest expense to INR8 million (INR18 million). Liquidity Indicator - Adequate: The ratings are, however, supported by the company's adequate liquidity with average peak use of the fund-based and non-fund-based limits of 30% and 27%, respectively, during the 12 months ended August 2020. The cash flow from operations declined to INR102 million in FY20 (FY19: INR162 million), on account of an increase in working capital requirement. Consequently, free cash flow declined to INR100 million in FY20 (FY19: INR152 million). Camex did not avail the Reserve Bank of India-prescribed moratorium under the COVID-19 relief package for debt repayment. Camex does not have any major debt-led capex plans in the near term. The ratings also remain supported by the company's managing director's experience of more than three decades in the chemicals industry. RATING SENSITIVITIES Positive: An improvement in the scale of operations along with the EBITDA margins, while maintaining the liquidity position, all on a sustained basis, would be positive for the ratings. Negative: A decline in the EBITDA margins, leading to the interest coverage reducing below 2.0x on a sustained basis would be negative for the ratings. COMPANY PROFILE Incorporated in 1989, Camex is promoted by Chopra and family. The company is engaged in the manufacturing and trading of reactive dyes, intermediates, pigments and specialty chemicals used in the textile industry. CLASSIC COTTON: ICRA Keeps B+ Debt Rating in Not Cooperating ------------------------------------------------------------ ICRA said the ratings for the INR25.40 crore bank facilities of Classic Cotton Private Limited continue to remain under the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B+(Stable)/[ICRA]A4; ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit 22.00 [ICRA]B+ (Stable); ISSUER NOT COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category Unallocated 3.40 [ICRA]B+ (Stable)/[ICRA]A4; Limits ISSUER NOT COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' Category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Incorporated in 2008 as a private limited company, Classic Cotton Private Limited is involved in ginning and pressing of raw cotton and crushing of cottonseeds. The company mainly produces cotton bales, cottonseeds, cottonseed oil, cottonseed oil cake and agro waste powder. The company also bleaches grey fabric on a job work basis and manufactures white coal (bio coal) by pressing ground nut shells over fire since April 2016. The company's manufacturing facility is equipped with 36 ginning machines and one pressing machine with an installed capacity to produce 400 bales per day. CCPL also has nine expellers, having the capacity of crushing 10 metric ton (MT) of cottonseeds per day. Further, it has three bio coal machines since April 2016. The company also trades in cotton bales and cottonseeds. CREDO LIFE: ICRA Lowers Rating on INR22cr Loans to B+ ----------------------------------------------------- ICRA has revised the ratings on certain bank facilities of Credo Life Sciences Private Limited (CLSPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term-Fund 6.00 [ICRA]B+ (Stable) ISSUER NOT Based/CC COOPERATING; Rating downgraded from [ICRA]BB- (Stable) and moved to 'Issuer Not Cooperating' category Long Term-Fund 12.76 [ICRA]B+ (Stable) ISSUER NOT Based TL COOPERATING; Rating downgraded from [ICRA]BB- (Stable) and moved to 'Issuer Not Cooperating' category Long Term- 3.24 [ICRA]B+ (Stable) ISSUER NOT Unallocated COOPERATING; Rating downgraded from [ICRA]BB- (Stable) and moved to 'Issuer Not Cooperating' category Rationale The rating downgrade is because of lack of adequate information regarding CLSPL performance and hence the uncertainty around its credit risk. ICRA assesses whether the information available about the entity is commensurate with its rating and reviews the same as per its "Policy in respect of non-cooperation by a rated entity" available at www.icra.in. The lenders, investors and other market participants are thus advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity, despite the downgrade. As part of its process and in accordance with its rating agreement with Credo Life Sciences Private Limited, ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information and in line with the aforesaid policy of ICRA, a rating view has been taken on the entity based on the best available information. Credo Life Sciences Private Limited (CLSPL) was incorporated in the year 2014 by Mr. A. Siva Rama Prasad. The promoters have about 20 years of experience in the pharmaceutical industry. CLSPL is engaged in the manufacturing of pharmaceutical pellets and commercial production started in September 2017. CLSPL's manufacturing facility is set up in Nandigama Village, Mahabubnagar district of Telangana with a capacity of 360 MTPA. DELITE CABLES: ICRA Keeps D Debt Ratings in Not Cooperating ----------------------------------------------------------- ICRA said the ratings for the INR12.00-crore bank facilities of Delite Cables Pvt. Ltd. continue to remain under 'Issuer Not Cooperating' category'. The ratings are denoted as "[ICRA]D/[ICRA]D ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term-Fund 4.00 [ICRA]D ISSUER NOT COOPERATING; Based/CC Rating continues to remain in the 'Issuer Not Cooperating' category Short Term-Non 4.50 [ICRA]D ISSUER NOT COOPERATING; Fund Based Rating continues to remain in the 'Issuer Not Cooperating' category Long Term/Short 3.50 [ICRA]D/[ICRA]D ISSUER NOT Term-Unallocated COOPERATING; Rating continues to remain in the 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of non-cooperation by a rated entity available at www.icra.in. Delite Cables Private Limited (DCPL) was incorporated in 2004 and is engaged in manufacturing low tension power and control cables and aerial bundled cables at its facility located at Vadodara in Gujarat. Besides this, DCPL is also an EPC (Erection, procurement and commissioning) contractor and has completed projects in Sasan Gir, Junagadh and Rajkot regions of Gujarat. The company is managed by Mr. Pankaj Panchal and Mr. Mitul Panchal who have past experience of about a decade in the cable industry. GRIPWELL FORGING: ICRA Keeps B+ Debt Rating in Not Cooperating -------------------------------------------------------------- ICRA has retained the long-term ratings for the bank facilities of Gripwell Forging & Tools (GFT) to the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B+ (Stable) ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Fund 7.00 [ICRA]B+ (Stable), ISSUER NOT based Cash Credit COOPERATING; Rating continues to remain in the 'ISSUER NOT COOPERATING' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/ limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of non-cooperation by a rated entity available at www.icra.in. Established in 1948, Gripwell Forging and Tools, a proprietorship concern, was started by Sardar Kesar Singh and is primarily involved in the manufacturing and exporting of hand tools, having a diversified product range under it. Mr. Gunit Singh Rana took over the concern, acting as the executive director (also the proprietor) along with Mr. Ajit Singh Rana, acting as the president. In 1998, Gripwell Forgings & Tools obtained the ISO 9002 System & Procedures certification. Subsequently, it upgraded to the ISO 9001:2008 Quality System with certifications from Intertek Group PLC. Products such as Chrome Vanadium Steel Spanners and Steel Vices are approved for safety and quality by TUV Rheinland-Germany and carry the coveted GS mark. The concern has different products with different SKUs under it, constituting primarily of vices, pliers, pincers, wrenches, spanners, hammers, pipe tools, saw blades, garden tools etc. GSR TEXTILES: ICRA Keeps D Debt Ratings in Not Cooperating ---------------------------------------------------------- ICRA said the ratings for the INR23.84-crore bank facilities of GSR Textiles Private Limited continue to remain under 'Issuer Not Cooperating' category'. The ratings are denoted as "[ICRA]D/[ICRA]D ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term-Fund 12.50 [ICRA]D ISSUER NOT COOPERATING; Based/CC Rating continues to remain in the 'Issuer Not Cooperating' category Long Term-Fund 5.77 [ICRA]D ISSUER NOT COOPERATING; Based TL Rating continues to remain in the 'Issuer Not Cooperating' category Short Term-Non Fund Based 1.35 [ICRA]D ISSUER NOT COOPERATING; Rating continues to remain in the 'Issuer Not Cooperating' category Long Term/Short Term-Unallocated 4.22 [ICRA]D/[ICRA]D ISSUER NOT COOPERATING; Rating continues to remain in the 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of non-cooperation by a rated entity available at www.icra.in. Incorporated in December 2005, GSR Textiles Private Limited is primarily engaged in production of cotton yarn. The company has a spinning mill located in Nandimpalem village in Guntur district with an installed capacity of 15,072 spindles per annum. The company's production facility can produce cotton and bended yarn in counts ranging from 30s to 60s. The company commenced its production in December 2006. HEATH VIEW: ICRA Keeps B Debt Rating in Not Cooperating Category ---------------------------------------------------------------- ICRA said the ratings for the INR3.50 crore bank facilities of Heath View Holiday Resorts Limited continue to remain under 'Issuer Not Cooperating' category'. The ratings are denoted as "[ICRA]B(Stable)/[ICRA]A4 ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based 3.00 [ICRA]B(Stable); ISSUER NOT Overdraft COOPERATING; Rating Continues to remain under issuer not cooperating category Non-fund based 0.50 [ICRA]A4; ISSUER NOT limits–Bank COOPERATING; Rating Continues Guarantee to remain under issuer not cooperating category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Incorporated in 1993, Heath View Holiday Resorts Limited (HVHRL) was established with the purpose of construction and operation of a hotel at Mahabaleshwar. The company was established by the Patel Group and was taken over by Evershine Builders in 2004. Evershine Group then commenced construction of the hotel property, which was completed by May 2010. Meanwhile, a hotel operating agreement was signed between HVHRL and Berggruen Hotels Private Limited (BHPL) assigning the rights of management and operations of hotel to BHPL under the Keys brand name. The hotel commenced operations in October 2010. IL&FS: In Talks with GAIL, US Fund for Stake in ONGC Tripura Power ------------------------------------------------------------------ The Economic Times reports that GAIL (India) Ltd. has initiated preliminary talks with beleaguered infrastructure financier IL&FS and US-based infrastructure investment fund Global Infrastructure Partners (GIP) to pick up at least 49% stake in ONGC Tripura Power Company (OTPC) at a valuation of INR1,500 crore, two people aware of the development told ET. PwC India is advising GAIL, India's largest state-owned natural gas processing and distribution company, on the deal to acquire the stake in the gas-based power plant. If successful, the deal will give GAIL rights equal to Oil and Natural Gas Corporation (ONGC), which is the 50% owner. IL&FS holds 26% in the power plant, while GIP has a 23.5% stake. The remaining 0.5% is owned by the Tripura state government. The INR1,500 crore valuation includes INR500 crore as equity to be distributed among the two buyers. The deal could resolve debt worth INR4,000 crore on the books of ONGC Tripura. Since it is 26% owned by IL&FS, the sale would have a positive impact on debt owed by IL&FS as well. ET reported on September 7 that the National Investment and Infrastructure Fund (NIIF) had also shown interest in a stake buy, potentially its first investment in the conventional energy sector. The bids are expected to come in by November. About IL&FS Infrastructure Leasing & Financial Services Limited (IL&FS) -- https://www.ilfsindia.com/ -- is an infrastructure development and finance company based in India. It focuses on the development and commercialization of infrastructure projects, and creation of value added financial services. The company operates in Financial Services, Infrastructure Services, and Others segments. The Indian government, in October 2018, stepped in to take control of crisis-ridden IL&FS by moving the National Company Law Tribunal (NCLT) to supersede and reconstitute the board of the firm which has defaulted on a series of its debt payments, according to Indian Express. This was said to be an attempt to restore the confidence of financial markets in the credibility and solvency of the infrastructure financing and development group. JAIN IRRIGATION: Fitch Withdraws 'RD' LT IDR on Insufficient Info ----------------------------------------------------------------- Fitch Ratings has withdrawn India-based micro-irrigation company Jain Irrigation Systems Limited's (JISL) Long-Term Issuer Default Ratings (IDR) of 'RD' and the 'C'/'RR4' rating on its USD200 million 7.125% senior unsecured notes due 2022. The notes are issued by JISL's wholly owned subsidiary, Jain International Trading B.V., and guaranteed by JISL. The ratings were withdrawn for the following reason: insufficient information provided. KEY RATING DRIVERS Fitch has withdrawn the ratings as the issuer has chosen to stop participating in the rating process. Therefore, Fitch will no longer have sufficient information to maintain the ratings. Accordingly, Fitch will no longer provide ratings or analytical coverage for JISL. RATING SENSITIVITIES Not relevant as the ratings have been withdrawn. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. ESG CONSIDERATIONS Following the withdrawal of ratings for JISL, Fitch will no longer be providing the associated ESG Relevance Scores. JANA CAPITAL: Ind-Ra Affirms B+ NCDs Rating, Outlook Stable ----------------------------------------------------------- India Ratings and Research (Ind-Ra) has affirmed Jana Capital Limited's (JCL) non-convertible debentures' (NCDs) rating at 'IND B+' with a Stable Outlook, as follows: -- INR1.5 mil. NCDs INE028U08016 issued on October 30, 2019 coupon rate 5.00% due on May 31, 2023 affirmed with IND B+/Stable rating. Analytical Approach: To arrive at the ratings, Ind-Ra continues to take a consolidated view of the credit profiles of JCL, Jana Holdings Limited (JHL; debt rated 'IND B+'/Stable) and Jana Small Finance Bank (JSFB). JCL, a non-deposit taking non-bank finance company-core investment company, holds 100% stake in JHL. JHL is a non-operating financial holding company (NOFHC) of JSFB (42.06% stake held by JHL) and the value of its investments is derived solely from its shareholding in JSFB. Both JCL and JHL have limited financial strength. The investment value of the stake in JSFB is largely subject to the bank's incremental performance (banking operations commenced in March 2018) and its ability to manage the credit costs emanating from its legacy portfolio. The NCDs, issued to TPG Asia VI India Markets Pte. Ltd, are junior to all the issues raised by Jana Holdings Limited (JHL). Nevertheless, the NCDs raised by JHL and JCL have a cross-default clause with JHL's indebtedness. The NCDs are created in the favor of Catalyst Trusteeship Limited and are subservient to the first ranking pledge created for the benefit of the holders of the NCDs issued by JHL over the equity shares of JSFB held by JHL until the senior instruments are paid-off on their due dates. A common independent director serving on the boards of JCL and India Ratings and Research Pvt. Ltd. (Ind-Ra) did not participate in the rating process. KEY RATING DRIVERS Collections see Improvement, but COVID-19 Overhang Persists: JSFB reported a net profit of INR400 million in 1QFY21 (FY20: INR300 million, FY19: net loss of INR19,491 million). The bank's performance and liability structure had improved in FY20. However, due to the lingering effects of the COVID-19-led nation-wide lockdown, the bank could face some credit costs which could impact its profitability at least in the medium term. While the bank has the scale to be modestly profitable, the favorable impact of the same could easily be offset by the credit costs that the bank may need to incur over the next one-to-two years. However, the reduction in deposit costs (by almost 2%) that JSFB has effected in FY21 could eventually help the bank register modest profitability over FY21-FY22. Ind-Ra expects a material improvement in the bank's credit profile if it is able to successfully deal with the impact of the pandemic-led disruptions on the asset quality and credit costs and there is no capital erosion. Furthermore, the collections have been improving every month, indicating some reduction in the uncertainties caused by the COVID-19-led disruptions. Liquidity Indicator for JCL - Poor: JCL does not have cash flows to service its debt obligations and would have to depend on the monetization of its stake in JSFB or the secondary sale of shares, etc. before the maturity date of the respective instruments. JCL's subsidiary, JHL holds 42.06% stake in JSFB and would need to list the bank before end-March 2021. Liquidity Indicator for JSFB – Adequate; Deposits Continue to See Traction: JSFB maintained excess statutory liquidity reserves of around INR18 billion over FY20-1QFY21 in addition to the cash reserves that it needs to maintain as part of the regulatory requirement. The bank's liquidity coverage ratio stood at 743.98% at FYE20 (FYE19: 1,027.24%). The bank had mobilized funds amounting to an additional INR26 billion over March-August 2020. In addition, the bank lowered its interest on deposits over FY20, which will help in decreasing its cost of deposits. JSFB has also been able to mobilize substantial deposits, with the term deposits increasing to INR82.2 billion in 1QFY21 (FY20: 89.4 billion; FY19: INR38.5 billion), and the current and savings accounts to INR9.3 billion (INR7.1 billion; INR3.1 billion). The total deposits stood at INR91.52 billion at end-June 2020, of which 73% have a tenor of more than one year. Refinancing and Valuation Risk: The issued NCDs face refinancing risks. The NCDs need to be refinanced to the extent of principal and the rate of return promised to the investors. While the refinancing risk is not immediate, the NCDs of JCL have a cross-default clause with the existing indebtedness of JHL. Therefore, any increase in JHL's shareholding on account of the proposed infusion might be insufficient to repay the existing obligations; hence, the valuation risk is significant. Improvement in Bank's Capital: JSFB received capital infusions of around INR3.3 billion in FY20 through its holding entity, to strengthen its eroding capital while maintaining its regulatory capital levels. This capital was raised through various new and existing investors. At end-1QFY21, JSFB reported tier I capital ratio of 13.38% (FY20: 13.27%, FYE19: 12.3%) and total capital adequacy ratio of 19.72% (19.31%, 18.81%). The bank's net worth stood at INR10.5 billion at FYE20. Considering JSFB would need growth capital to report net profits while also reducing its leverage and maintaining regulatory capital, Ind-Ra estimates the bank to require equity capital or internal accruals of INR2 billion-3 billion over the next 18-24 months, depending on their growth and profitability, to achieve the scale that would deliver profitability with reasonable capital buffers. JCL's divestment ability is limited as its subsidiary JHL needs to hold at least 40% stake in the bank for a minimum period of five years ending FY23. Also, the bank may have substantial accruals only by FY22, and hence, the leverage may increase until then. Improving Asset Quality; Expectation of Additional Stress due to COVID-19: The bank reported write-downs of INR3 billion in FY20 against INR25.14 billion in FY19, resulting in a substantial improvement in its gross non-performing assets (NPAs) to 3.2% (FY19: 8.4%, FY18: 42.21%) and net NPAs to 1.4% (4.4%, 27.7%). The bank also increased its provision coverage ratio to 56.2% in FY20 (FY19: 47.7%; FY18: 47.5%). While the bank had outstanding loans of INR3.2 billion in its 90 days+ bucket at end-March 2020, it was able to recover INR1.69 billion over FY20 from written-off accounts. Ind-Ra expects the write-downs to decrease further to INR1 billion- 2 billion in FY21. In a normal business scenario, the bank would probably not have witnessed significantly higher credit costs on the newly originated portfolio (post-December 2017 disbursement; also reflected in the delinquency data) in FY21. In the prevailing situation, however, it might face additional credit costs of 2.5%-3% at the minimum during the year. RATING SENSITIVITIES Negative: Material capital erosion (Tier 1 at or below regulatory levels), low provisions coupled with high gross NPAs and inability to mobilize sufficient deposits as needed to maintain its liability and liquidity profile could lead to negative rating action. In addition, inadequate progress on tying up refinance for the bonds of JHL maturing next year could also lead to negative rating action. Any unrelated diversification by the holding company could also result in a rating downgrade. Positive: The absence of any capital erosion and the bank's demonstrated ability to manage the impact of the pandemic-led disruptions on the credit quality and cost over FY21-FY22 would result in a positive rating action. COMPANY PROFILE JCL was incorporated on March 26, 2015 to carry on the business of an investment company and to invest, buy, sell or deal in any share, stock, and debenture. The company received a certificate of registration dated 24 March 2017 from the Reserve Bank of India as a non-banking financial institution – non deposit taking – systematically important core investment company under section 45IA of the Reserve Bank of India Act, 1934. JSFB had total advances of INR113 billion and operated through 250 branches at end-March 2020. JANA HOLDINGS: Ind-Ra Affirms B+ NCDs Rating, Outlook Stable ------------------------------------------------------------ India Ratings and Research (Ind-Ra) has affirmed Jana Holdings Limited's (JHL) non-convertible debentures' (NCDs) rating at 'IND B+' with a Stable Outlook, as follows: -- INR3.00 mil. NCDs* affirmed with IND B+/Stable rating. *Details in annexure Analytical Approach: To arrive at the ratings, Ind-Ra continues to take a consolidated view of the credit profiles of JHL and Jana Small Finance Bank (JSFB). JHL, a subsidiary of Jana Capital Limited (JCL; debt rated 'IND B+'/Stable), has limited financial strength. It is a non-operating financial holding company (NOFHC) of JSFB (42.06% stake held by JHL) and the value of its investments is derived solely from its shareholding in JSFB. The investment value is largely subject to the incremental performance of JSFB (banking operations commenced in March 2018) and the ability of the bank to manage the credit costs emanating from its legacy portfolio. The NCDs are held by Centrum Group and Manipal Health Systems Pvt. Ltd. (MHSPL) and are junior to JHL's existing debt. The NCDs held by Centrum Group will mature first, followed by JHL's existing NCDs (not rated by Ind-Ra), which are held by Caladium Investment Pte. Ltd (INR1 billion), Edelweiss Capital Limited (INR1.55 billion) and TPG Capital Asia (INR4.03 billion), and lastly those held by MHSPL. As per the conditions of the initial public offering (IPO), which is scheduled to be completed by March 2021, any liquidity event or default on the NCDs from Caladium Investment and Edelweiss Capital will have senior claim on JHL's assets or IPO or refinance proceeds, followed by Centrum Group. The claims of remaining NCDs held by Manipal would be pari passu to the NCDs held by TPG Capital Asia. A common independent director serving on the boards of Jana Holdings Limited and India Ratings & Research Pvt. Ltd. (Ind-Ra) did not participate in the rating process. KEY RATING DRIVERS Collections see Improvement, but COVID-19 Overhang Persists: JSFB reported a net profit of INR400 million in 1QFY21 (FY20: INR300 million, FY19: net loss of INR19,491 million).The bank's performance and liability structure improved in FY20. However, due to the lingering effects of the COVID-19-led nation-wide lockdown, the bank could face some credit costs which could impact its profitability at least in the medium term. While the bank has the scale to be modestly profitable, the favorable impact of the same could easily be offset by the credit costs that the bank may need to incur over the next one-to-two years. However, the reduction in deposit costs (by almost 2%) that JSFB has effected in FY21 could eventually help the bank register modest profitability over FY21-FY22. Ind-Ra expects a material improvement in the bank's credit profile if it is able to successfully deal with the impact of the pandemic-led disruptions on the asset quality and credit costs and there is no capital erosion. Furthermore, the collections have been improving every month, indicating some reduction in the uncertainties caused by the COVID-19-led disruptions. Liquidity Indicator for JHL - Poor: JHL does not have cash flows to service its debt obligations and would have to depend on the monetization of its stake in JSFB or the secondary sale of shares, etc. before the maturity date of the respective instruments. JHL holds 42.06% stake in JSFB and would need to list the bank before end-March 2021. Liquidity Indicator for JSFB – Adequate; Deposits Continue to See Traction: JSFB maintained excess statutory liquidity reserves of around INR18 billion over FY20-1QFY21 in addition to the cash reserves that it needs to maintain as part of the regulatory requirement. The bank's liquidity coverage ratio stood at 743.98% at FYE20 (FYE19: 1,027.24%). The bank had mobilized funds amounting to an additional INR26 billion over March-August 2020. In addition, the bank lowered its interest on deposits over FY20, which will help in decreasing its cost of deposits. JSFB has also been able to mobilize substantial deposits, with the term deposits increasing to INR82.2 billion in 1QFY21 (FY20: 89.4 billion; FY19: INR38.5 billion), and the current and savings accounts to INR9.3 billion (INR7.1 billion; INR3.1 billion). The total deposits stood at INR91.52 billion at end-June 2020, of which 73% have a tenor of more than one year. High Refinancing and Valuation Risks: The issued NCDs face refinancing risks. JHL faces limitations related to the dilution of its shareholding in JSFB on account of regulatory requirements and share pledges (1.99% pledged to existing lenders). The NCDs need to be refinanced to the extent of principal and the rate of return promised to the investors. The NOFHC is required to hold at least 40% stake in the bank for a minimum of five years ending FY23. The NCDs have a cross-default clause with the existing indebtedness of JHL. Therefore, any increase in JHL's shareholding on account of the proposed infusion might be insufficient to repay the existing obligations; hence, the valuation risk is significant. The first set of NCDs issued to Centrum Group amounting to INR0.9 billion is due in December 2021. Improvement in Bank's Capital: JSFB received capital infusions of around INR3.3 billion in FY20 through its holding entity, to strengthen its eroding capital while maintaining its regulatory capital levels. This capital was raised through various new and existing investors. At end-1QFY21, JSFB reported tier I capital ratio of 13.38% (FY20: 13.27%, FYE19: 12.3%) and total capital adequacy ratio of 19.72% (19.31%, 18.81%). The bank's net worth stood at INR10.5 billion at FYE20. Considering JSFB would need growth capital to report net profits while also reducing its leverage and maintaining regulatory capital, Ind-Ra estimates the bank to require equity capital or internal accruals of INR2 billion-3 billion over the next 18-24 months, depending on their growth and profitability, to achieve the scale that would deliver profitability with reasonable capital buffers. JCL's divestment ability is limited as its subsidiary JHL needs to hold at least 40% stake in the bank for a minimum period of five years ending FY23. Also, the bank may have substantial accruals only by FY22, and hence, the leverage may increase until then. Improving Asset Quality; Expectation of Additional Stress due to COVID-19: The bank reported write-downs of INR3 billion in FY20 against INR25.14 billion in FY19, resulting in a substantial improvement in its gross non-performing assets (NPAs) to 3.2% (FY19: 8.4%, FY18: 42.21%) and net NPAs to 1.4% (4.4%, 27.7%). The bank also increased its provision coverage ratio to 56.2% in FY20 (FY19: 47.7%; FY18: 47.5%). While the bank had outstanding loans of INR3.2 billion in its 90 days+ bucket at end-March 2020, it was able to recover INR1.69 billion over FY20 from written-off accounts. Ind-Ra expects the write-downs to decrease further to INR1 billion- 2 billion in FY21. In a normal business scenario, the bank would probably not have witnessed significantly higher credit costs on the newly originated portfolio (post-December 2017 disbursement; also reflected in the delinquency data) in FY21. In the prevailing situation, however, it might face additional credit costs of 2.5%-3% at the minimum during the year. RATING SENSITIVITIES Negative: Material capital erosion (Tier 1 at or below regulatory levels), low provisions coupled with high gross NPAs and the inability to mobilize sufficient deposits as needed to maintain its liability and liquidity profile could lead to a negative rating action. Inadequate progress on tying up refinance for the bonds maturing next year and any unrelated diversification by the holding company could also result in a rating downgrade. Positive: The absence of any capital erosion and the bank's demonstrated ability to manage the impact of the pandemic-led disruptions on the credit quality and cost over FY21-FY22 would result in a positive rating action. COMPANY PROFILE JHL is registered as an NOFHC according to the regulatory guidelines, and is promoted by JCL, to hold the promoter stake in JSFB. JONNA IRON: ICRA Withdraws B+ Rating on INR17cr Cash Loan --------------------------------------------------------- ICRA has withdrawn the ratings on certain bank facilities of Jonna Iron Mart, as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based– 17.00 [ICRA]B+(Stable) ISSUER NOT Cash Credit COOPERATING; withdrawn Rationale The rating is withdrawn in accordance with ICRA's policy on withdrawal and suspension and as requested by the firm. ICRA does not have adequate information to suggest that the credit risk has changed since the time the ratings were last reviewed. Key rating drivers Key rating drivers have not been captured for the rating withdrawal due to inadequacy of incremental information since the ratings were last reviewed. Liquidity Position Liquidity position has not been captured for the rating withdrawal due to inadequacy of incremental information since the ratings were last reviewed. Rating sensitivities Sensitivities have not been captured for the rating withdrawal due to inadequacy of incremental information since the ratings were last reviewed Jonna Iron Mart was founded as a partnership firm in 1962 to trade in iron and steel products. The firm operates as a dealer for products of Tata Steel, RINL and SAIL in addition to selling re-rolled steel products of other rolling mills. The firm is managed by Mr. Jonna Suresh and operates out of Anantapur. KASTURI COMMODITIES: ICRA Keeps D Debt Ratings in Not Cooperating ----------------------------------------------------------------- ICRA said the ratings for the INR75.00 crore bank facilities of Kasturi Commodities Private Limited continue to remain under the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]D/[ICRA]D ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term– (16.00) [ICRA]D ISSUER NOT COOPERATING; Interchangeable Rating continues to remain under 'Issuer Not Cooperating' category Short Term– 75.00 [ICRA]D ISSUER NOT COOPERATING; Non Fund Based Rating continues to remain under 'Issuer Not Cooperating' category Short Term- (10.50) [ICRA]D ISSUER NOT COOPERATING; Interchangeable Rating continues to remain under 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/ limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. KCPL, incorporated in 1993, was acquired by its present promoters, Mr. Shreenath Das Agarwal and Mrs. Pooja Agarwal in 2003. The company is engaged in the business of ship breaking and trading of various types of steel and scarp items. The company operates its ship-breaking business from Alang (Gujarat) and Darukhana, Mumbai (Maharashtra). The company's associate concern, Kamarli Steels Private Limited is involved in trading of various types of steel and scrap items. It has an outstanding rating of [ICRA]D ISSUER NOT COOPERATING. KRISHNA CONSTRUCTIONS: ICRA Moves B+ Rating to Not Cooperating -------------------------------------------------------------- ICRA has moved the long term rating for the INR15.00 crore bank facilities of Krishna Constructions. The rating is now denoted as "[ICRA]B+(Stable); ISSUER NOT COOPERATING"; Rating moved to 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term, Fund- 15.00 [ICRA]B+(Stable) ISSUER NOT based–Cash Credit COOPERATING, Rating moved to 'Issuer Not Cooperating' Category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of non-cooperation by a rated entity available at www.icra.in. Established in year 2004, Krishna Constructions, a partnership firm is presently engaged in the execution of a project; Lotus Court at Kharadi, Pune. Lotus Court is a residential cum commercial project involving construction of 62 residential units and 24 commercial units. The project would comprise two 10 storey buildings having commercial units at the ground floor, two floors for vehicle parking and the remaining floors for residential units. The residential units would comprise 2BHK and 3BHK apartments. The construction of Lotus Court began in November 2015 and the project was launched in March 2016. MAHESH ELECTRICAL: ICRA Moves B+ Debt Rating to Not Cooperating --------------------------------------------------------------- ICRA has moved the long term and short-term ratings for the INR7.50 crore bank facilities of Mahesh Electrical & Telecom. The rating is now denoted as "[ICRA]B+(Stable)/[ICRA]A4; ISSUER NOT COOPERATING"; Rating moved to 'Issuer Not Cooperating' category. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term, Fund- 4.00 [ICRA]B+(Stable) ISSUER NOT based–Cash Credit COOPERATING, Rating moved to 'Issuer Not Cooperating' Category Short Term, Non- 3.50 [ICRA]A4 ISSUER NOT Fundbased COOPERATING, Rating moved to 'Issuer Not Cooperating' Category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of non-cooperation by a rated entity available at www.icra.in. Established in year 2006, Mahesh Electrical & Telecom (MET or the Firm) is a turnkey service provider for private players in setting up telecom tower assemblies as well as a contractor for construction of electrical infrastructure for government bodies in the states of Maharashtra and Karnataka. The firm is promoted by proprietor Mr. Shankar Kagne who initially worked in the telecom sector and then entered construction line for electrical infrastructure for state electricity bodies. The firm has its registered office in Pune, Maharashtra. Providing turnkey solutions for telecom players and construction of electrical infrastructure are the two major revenue contributors of MET. The firm sets up and commissions mobile tower assemblies for telecom players and undertakes electrical construction works for government bodies in Maharashtra and Karnataka. MALIK MOTORS: ICRA Moves B Debt Ratings to Not Cooperating ---------------------------------------------------------- ICRA has moved the long-term ratings for the bank facilities of Malik Motors Private Limited to the 'Issuer Not Cooperating' category. The rating is now denoted as "[ICRA]B (Stable) ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term-Fund 13.00 [ICRA]B(Stable) ISSUER NOT Based/CC COOPERATING; Rating moved to the 'Issuer Not Cooperating' category Long Term- 2.00 [ICRA]B(Stable) ISSUER NOT Unallocated COOPERATING; Rating moved to the 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of non-cooperation by a rated entity available at www.icra.in. MMPL was incorporated as a private limited company in 2010 and began operations in 2012. It is an authorized dealer of light commercial vehicles (LCV's) of Ashok Leyland Limited (ALL). The company is the sole authorized dealer for Medak, Nalgonda, Siddipet and Sangareddy districts of Telangana and authorized dealer for Hyderabad and Secunderabad regions in Telangana. MMPL operates twelve 3S (Sales, Spares and Service) facilities in these districts. The company is managed by Mr. Rajesh Malik and Mr. Neeraj Malik and is part of Malik group which is also into other dealership businesses. MARIGOLD PAINTS: ICRA Keeps B+ Debt Rating in Not Cooperating ------------------------------------------------------------- ICRA said the ratings for the INR8.50 crore bank facilities of Marigold Paints Pvt. Ltd. continue to remain in the 'Issuer Not Cooperating' category. The ratings are denoted as "[ICRA]B+ (Stable)/[ICRA]A4 ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based– 7.00 [ICRA]B+ (Stable) ISSUER NOT Cash Credit COOPERATING; Rating continues to remain under 'Issuer Not Cooperating' category Short Term 1.00 [ICRA]A4 ISSUER NOT Non Fund Based COOPERATING; Rating continues Letter of Credit to remain under 'Issuer Not Cooperating' category Short Term (0.50) [ICRA]A4 ISSUER NOT Interchangeable COOPERATING; Rating continues Bank Guarantee to remain under 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of non-cooperation by a rated entity available at www.icra.in. Incorporated in April 1987, Marigold Paints Pvt. Ltd. (MPPL) is engaged in manufacture of industrial paints as well as ancillary products such as primer, resin, putty, thinner etc. It has also integrated backwards to manufacture resins, such as alkyd, amino, poly vinyl butyral resins, which are consumed captively for manufacture of paints as well as sold to other players. The company was erstwhile managed by Mr. Bhanu Patel from whom Mr. Davinder Mittal took over in 2001. In April 2015, Snowcem Paints Private Limited acquired 51% stake in the company and became a majority stakeholder. MARTCO EXPORT: ICRA Moves B Debt Ratings to Not Cooperating ----------------------------------------------------------- ICRA has moved the long-term ratings for the bank facilities of Martco Export Private Limited (MEPL) to the 'Issuer Not Cooperating' category. The rating is now denoted as "[ICRA]B (Stable) ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term/ 2.00 [ICRA]B (Stable), ISSUER NOT Fund Based/ COOPERATING; Rating moved to Packing Credit the 'ISSUER NOT COOPERATING' category Long Term/ 6.00 [ICRA]B (Stable), ISSUER NOT Fund Based/ COOPERATING; Rating moved to Term Loan the 'ISSUER NOT COOPERATING' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/ limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of non-cooperation by a rated entity available at www.icra.in. Incorporated in 2011, Martco Export Private Limited (MEPL) was incorporated by three brothers, Mr. Rachit Jain, Mr. Rajan Jain and Mr. Samish Jain. The company manufactures and exports stainless steel utensils, brass artwares, E.P.N.S.3 wares, wood and glassware and other Indian handicrafts. Notably, stainless steel utensils are the mainstay of its business. The company started its operations in FY2015 and production in FY2017. MEPL focusses on exporting its products with most of its clients in USA. The company has negligible domestic sales. MEPL has an annual production capacity of approximately 10 lakh units at its Moradabad-based facility. N S VAISHNO: ICRA Lowers Rating on INR12.50cr LT Loan to B+ ----------------------------------------------------------- ICRA has revised the ratings on certain bank facilities of N S Vaishno Devi Developers India Private Limited (NSVD), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term-Fund 12.50 [ICRA]B+(Stable) ISSUER NOT Based/CC COOPERATING; Rating downgraded from [ICRA]BB(Stable) ISSUER NOT COOPERATING and continues to remain in the 'Issuer Not Cooperating' category Long Term-Fund 7.50 [ICRA]B+(Stable) ISSUER NOT Based TL COOPERATING; Rating downgraded from [ICRA]BB(Stable) ISSUER NOT COOPERATING and continues to remain in the 'Issuer Not Cooperating' category Long Term- 33.00 [ICRA]B+(Stable) ISSUER NOT Unallocated COOPERATING; Rating downgraded from [ICRA]BB(Stable) ISSUER NOT COOPERATING and continues to remain in the 'Issuer Not Cooperating' category Rationale The rating downgrade is because of lack of adequate information regarding NSVD performance and hence the uncertainty around its credit risk. ICRA assesses whether the information available about the entity is commensurate with its rating and reviews the same as per its "Policy in respect of non-cooperation by a rated entity" available at www.icra.in. The lenders, investors and other market participants are thus advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity, despite the downgrade. As part of its process and in accordance with its rating agreement with N S Vaishno Devi Developers India Private Limited, ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information and in line with the aforesaid policy of ICRA, a rating view has been taken on the entity based on the best available information. N S Vaishno Devi Developers India Private Limited (NSVD) is a private limited company founded in February, 2015 and is engaged in the business of construction both commercial and residential with its head office located in Guntur. The company is developing City Market & Homes project in Mangalagiri Road, Guntur on a land area of 3.25 acres in 2 phases; with total cost of the project to be at INR114.03 crore in which INR38.10 crore is for phase 1, INR44.67 crore for phase 2, INR20.29 crore for land and remaining INR10.97 crore for IDC and other expenses. Phase-1 of the project includes construction of 220 shops in ground and first floor and Phase-2 of the project includes construction of 220 shops in second floor and 210 residential apartments in third, fourth and fifth floor. NANDI IRRIGATION: ICRA Moves B Debt Rating to Not Cooperating ------------------------------------------------------------- ICRA has moved the long-term and short-term ratings for the bank facilities of Nandi Irrigation Systems Limited to the 'Issuer Not Cooperating' category. The rating is now denoted as "[ICRA]B(Stable)/[ICRA]A4 ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term-Fund 6.00 [ICRA]B(Stable) ISSUER NOT Based/CC COOPERATING; Rating moved to the 'Issuer Not Cooperating' category Short Term- 3.00 [ICRA]A4 ISSUER NOT Non-Fund Based COOPERATING; Rating moved to the 'Issuer Not Cooperating' category Long Term/ 3.00 [ICRA]B(Stable)/[ICRA]A4 Short Term- ISSUER NOT COOPERATING; Unallocated Rating moved to the 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of non-cooperation by a rated entity available at www.icra.in. Nandi Irrigation Systems Limited (NISL) was incorporated in 2007 and is promoted by Mr. Sajjala Sreedhar Reddy. The company is engaged in the manufacturing of Polyvinyl-Chloride (PVC) pipes, lateral pipes and sprinklers used in irrigation. NISL has its plant located in Nandyal, Kurnool district of Andhra Pradesh and is a part of the Nandi group of Industries based out of Andhra Pradesh. The group is having diversified business interest such as cement, dairy, PVC pipes, construction etc. NEW ASIAN: ICRA Reaffirms B Rating on INR11cr Loans --------------------------------------------------- ICRA has reaffirmed ratings on certain bank facilities of New Asian Construction Company (NACC), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Overdraft 3.00 [ICRA]B (Stable); Reaffirmed Bank Guarantee 8.00 [ICRA]B (Stable); Reaffirmed Unallocated Limits 11.00 [ICRA]B (Stable)/A4; Reaffirmed Rationale The reaffirmation in ratings takes into account NACC's stretched liquidity position due to delay in realisation of receivables and high inventory levels, following non-certification of completed work. ICRA also notes the execution-related delays on the outstanding order book, largely attributable to client-side factors; consequently, the company's ability to execute the order book within budgeted time and cost parameters is critical. NACC has also provided financial support to its group concern, New Asian Infrastructure Development Private Limited (NAIDPL), in the form of a corporate guarantee. NAIDPL has a track record of irregularities in servicing its debt obligations. Moreover, the rating also remains constrained by the small-scale operations, the partnership nature of the entity, the high sectoral, geographical and client concentration risks, as 100% of the outstanding order book is concentrated in the irrigation and dam segment in the Ahmednagar District of Maharashtra, bagged from various divisions of the Godavari Marathwada Irrigation Development Corporation (GMIDC). The ratings, however, derive comfort from the long track record of the firm and the partners in the construction industry. The Stable outlook on the [ICRA]B rating reflects ICRA's expectation that NACC will continue to benefit from the extensive experience of its partners of around five decades in the construction of dams and irrigation projects. Key rating drivers and their description Credit strengths * Long track record in construction sector, particularly in execution of irrigation projects; technically qualified Promoter: The firm and the partners have extensive experience of around five decades in the civil construction industry. NACC has an established presence in the irrigation segment and primarily executes projects such as dams and canal work, tunnel drilling or lift irrigation work, particularly in Maharashtra. At present, it is constructing a dam on the Pravara River, which is a tributary of the Godavari. Along with the dam, the firm is also onstructing lift canal irrigation and tunnel projects within a radius of 50-60 km of the dam. Credit challenges * Small-scale operations; partnership nature of entity: The firm's scale of operations is small - it achieved a revenue of INR11.15 crore in FY2020. The revenue is constrained because of delayed execution of work on orders due to paucity of funds in the respective government divisions. Being a partnership firm, NACC is also exposed to the risk of capital withdrawals by its partners, as witnessed in the past. * High execution risk because of slow-moving order book: The firm's order book is stretched at INR346.48 crore (as on March 31, 2020), translating to 31.07 times the revenue booked in FY2020. The order execution, especially in the last three-four fiscals, has been very slow because of lack of funds in the concerned departments of GMIDC, pending approvals for land acquisitions and other operational delays by the authorities. These factors expose the firm to high execution risk. Nevertheless, NACC is hedged against raw material price escalation risks because of the price variation clauses provided in the contracts. * High working capital intensity: The firm's working capital intensity remains high owing to the high retention money receivables and the inventory in the form of unbilled revenue. The unbilled revenue remains high due to delays in certification of the work by the government authorities. * Large corporate guarantee given to group concern, NAIDPL, which has weak financial profile: NACC has provided corporate guarantee to NAID. However, the guarantee was not invoked by the lender despite the delays in debt servicing by NAID in the past and the restructuring of term loan. Notwithstanding this, NAIDPL has been regular in servicing its debt obligations in the past six months. * High sectoral and client concentration risk: As on March 31, 2020, 100% of the outstanding order book consisted of irrigation and dam works, all concentrated in the Nilwande Village of Ahmednagar district in Maharashtra, exposing NACC to high segmental and geographic concentration risks. Moreover, the client concentration risk also remains high as the firm has bagged the dam and irrigation project from various divisions of GMIDC. Liquidity position NACC's liquidity position is stretched, characterised by high average working capital limit utilisation of ~93% against sanctioned limit of INR3.00 crore from July 2019 to August 2020. The firm's working capital intensity remains high because of high debtor and inventory levels. Rating sensitivities Positive Triggers * Sustained revenue growth led by higher execution, while maintaining profitability levels * Improvement in working capital cycle leading to improved liquidity Negative Triggers * Weakening of capital structure, debt coverage indicators or liquidity profile of the firm NACC is a partnership firm established in 1967 to undertake construction of dams, power houses, pump houses, canals and bridges. It is registered with the Public Works Department (PWD) of Maharashtra in the A-1 category. The firm has an established presence in the irrigation segment and primarily executes projects such as dams and canal work, tunnel drilling or lift irrigation work, particularly in Maharashtra. The firm is managed by Mr. Syed Abdur Rasheed and his two sons, Mr. Syed Abdur Zubair and Mr. Syed Abdur Umair. The Group company, New Asian Infrastructure Development Private Limited (NAID) has developed a 7MW hydro power project at the foot of the Nilwande Dam on the Pravara River in Maharashtra, on a Build, Operate and Transfer (BOT) basis. NAID is rated at [ICRA]B- (Stable). OMKAR FABRICS: ICRA Keeps B Debt Ratings in Not Cooperating ----------------------------------------------------------- ICRA said the ratings for the INR15.00 crore bank facilities of Omkar Fabrics Private Limited continue to remain under 'Issuer Not Cooperating' category'. The ratings are denoted as "[ICRA]B(Stable)/[ICRA]A4 ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based- 3.00 [ICRA]B(Stable); ISSUER NOT Cash Credit COOPERATING; Rating Continues to remain under issuer not cooperating category Fund based- 1.23 [ICRA]B(Stable); ISSUER NOT Term Loan COOPERATING; Rating Continues to remain under issuer not cooperating category Unallocated 10.77 [ICRA]B(Stable)/[ICRA]A4; Limit ISSUER NOT COOPERATING; Rating Continues to remain under issuer not cooperating category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Omkar Fabrics Pvt. Ltd. (OFPL) was incorporated in 2010 by Mr. Santosh Jhawar & family. However, manufacturing operations commenced from February 2013. OFPL manufactures cotton greige fabric which finds application in manufacturing of suiting and shirting. The weaving activity is carried out through job workers located nearby and the sizing of fabrics is carried out in-house. The company has its registered office at Hingoli district of Maharashtra. The Omkar group comprise of two other concerns, viz. Omkar Purna Fabrics which is into ginning and pressing of cotton bales and Purna Global Textile Park which is a special purpose vehicle (SPV) for constructing an integrated textile park. POLYSOL INDUSTRIES: ICRA Withdraws B+ Rating on INR2cr Loan ----------------------------------------------------------- ICRA has withdrawn the ratings on certain bank facilities of Polysol Industries, as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based- 2.00 [ICRA]B+(Stable); ISSUER NOT Cash Credit COOPERATING; Withdrawn Facility Non-fund based– 9.00 [ICRA]A4; ISSUER NOT Letter of Credit COOPERATING; Withdrawn Non-fund based– 0.80 [ICRA]A4; ISSUER NOT Forward Contract COOPERATING; Withdrawn Exposure Rationale The rating assigned to Polysol Industries has been withdrawn at the request of the company and based on the No Due Certificate was received from the banker, and in accordance with ICRA's policy on withdrawal and suspension. ICRA is withdrawing the rating and that it does not have information to suggest that the credit risk has changed since the time the rating was last reviewed. Key rating drivers The key rating drivers have not been captured as the rated instrument(s) are being withdrawn. Liquidity position Liquidity position has not been captured as the rated instruments are being withdrawn. Rating sensitivities Rating sensitivities have not been captured as the rated instruments are being withdrawn Polysol was established on April 1, 1996 for manufacturing of Poly Aluminum Chloride Solution and Alumina Sulphate (Ferric and Non ferric). The firm is a part of the "Polysol Group", which was earlier known as 'Nataraj Industries'. This group has been in the business of chemicals and dyes for the past three decades and also undertakes trading activities. The firm has diversifies into edible oil trading business in 2009, which currently accounts for ~80-90% of the total revenue. The firm has its registered office at Vapi, Gujarat and its manufacturing unit is located in GIDC, Sarigam in the district of Valsad, Gujarat. The manufacturing unit has an installed capacity of 30000 MTPA and the unit is operating at ~20% utilisation level at present. In FY2017, the firm reported a net profit of INR0.70 crore on an operating income of INR68.69 crore, as compared to a net profit of INR0.19 crore on an operating income of INR53.94 crore in the previous year. PRASAD AGRICO: ICRA Moves B+ Debt Ratings to Not Cooperating ------------------------------------------------------------ ICRA said the rating for INR30.00-crore bank facility of Prasad Agrico Industries Private Limited (PAIPL) has been moved to 'Issuer Not Cooperating' category. The rating is denoted as [ICRA]B+(Stable) ISSUER NOT COOPERATING. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-term Fund- 24.25 [ICRA]B+ (Stable) ISSUER NOT based COOPERATING; Rating moved to 'Issuer Not Cooperating' Category Unallocated 5.75 [ICRA]B+ (Stable) ISSUER NOT COOPERATING; Rating moved to 'Issuer Not Cooperating' Category ICRA has been seeking information from the entity so as to monitor its performance. Despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA on the basis of the best available/dated/limited information on the issuers' performance. Accordingly, lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as it may not adequately reflect the credit risk profile of the entity. PAIPL was established in November 2013 but became operational in April 2015. The company provides cold storage facilities for different kinds of farm products on a rental basis with an installed capacity to store 9,000 MT. It also trades in of farm products. The facility is located in the Manguraha village of East Champaran (Bihar) and the active promoters are Mr. Yogendra Prasad and Mrs. Pratima Prasad. RANKAS TEXFAB: Ind-Ra Moves B+ LT Issuer Rating to Non-Cooperating ------------------------------------------------------------------ India Ratings and Research (Ind-Ra) has migrated Rankas Texfab Private Limited's Long-Term Issuer Rating to 'IND B+ (ISSUER NOT COOPERATING)' and simultaneously withdrawn it. The detailed rating actions are: -- INR46.17 mil. Long-term loans* due on November 2022 migrated to non-cooperating category and withdrawn; -- INR148 mil. Fund-based working capital limit.** migrated to non-cooperating category and withdrawn; and -- INR15 mil. Non-Fund-based working capital limit.*** migrated to non-cooperating category and withdrawn. *Maintained at 'IND B+ (ISSUER NOT COOPERATING)' before being withdrawn **Maintained at 'IND B+ (ISSUER NOT COOPERATING)'/'IND A4 (ISSUER NOT COOPERATING)' before being withdrawn ***Maintained at 'IND A4 (ISSUER NOT COOPERATING)' before being withdrawn KEY RATING DRIVERS The ratings have been maintained in the non-cooperating category before being withdrawn because the issuer did not participate in the rating exercise, despite repeated requests by the agency, and has not provided information about the interim financial performance for FY20, sanctioned bank facilities and utilization, business plan and projections for next three years, information on corporate governance, and management certificate. Ind-Ra is no longer required to maintain the ratings, as the agency has received a no-objection certificate from the lenders (prior to September 2, 2020). This is consistent with the Securities and Exchange Board of India's circular dated March 31, 2017 for credit rating agencies. COMPANY PROFILE Rankas Texfab was incorporated in 1994 as a private limited company by Chetankumar Motilal Ranka. The company is involved in textile processing, dyeing, printing, and stitching. It has a plant in Ahmedabad (Gujarat). RATNAAKAR SHELTERS: ICRA Reaffirms B+ Rating on INR50cr Loans ------------------------------------------------------------- ICRA has reaffirmed ratings on certain bank facilities of Ratnaakar Shelters LLP (RSLLP), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long-Term–Fund- Based Term Loan 49.30 [ICRA]B+ (Stable); Reaffirmed Long-Term– Unallocated 00.70 [ICRA]B+ (Stable); Reaffirmed Rationale The rating reaffirmation continues to take into account the exposure of RSLLP to high project execution risk for its project, 'Aventus Heights', since 52% of the total project cost is yet to be incurred. Moreover, the project attracts high market risk as 64% of the total project area was yet to be sold as of April 2020. The rating is also constrained by the low level of advances received till April 2020, which accentuates the funding risk given the high reliance of the firm on customer advances (43% of total project funding) for project completion as well as the risk of capital withdrawal inherent in the limited liability partnership firm. Further, the rating takes into consideration the stiff competition from other ongoing and completed projects by established developers in the project vicinity. Furthermore, ICRA notes that the pandemic induced lockdown has led to delays in construction due to unavailability of labour and the anticipated decline in demand in the real estate sector could further impact the realisations and pace of bookings for the project. The rating, however, favourably factors in the extensive experience and track record of the promoters in real estate development, spanning over three decades. The rating also considers the favourable location of the project with good connectivity and presence of social and physical infrastructure, as well as the low-ticket size of the project, which increases its attractiveness. The Stable outlook on the [ICRA]B+ rating reflects ICRA's opinion that RSLLP will continue to benefit from its promoters' established track record of operations in the real estate industry. Key rating drivers and their description Credit strengths * Extensive experience of the management in real estate industry: Established in 2015, RSLLP is a part of the Mumbaibased Aventus Realty Group (erstwhile Ratnaakar Group), which is jointly promoted by Mr. Sukhraj Mehta, Mr. Vinod S. Mehta and Mr. Deven P. Mody. The Group has a reasonable track record of developing over 2 lakh sq. ft. of residential and commercial space in Mumbai. * Favourable project location with good connectivity, and social and physical infrastructure: The project is located at Govandi in Mumbai and enjoys good social infrastructure in the vicinity. Furthermore, the project draws from its advantage of being near various retail and entertainment centres. The project also enjoys good connectivity with mass transit systems as well as the airport. * Low ticket size of project increases its attractiveness: The project, Aventus Heights, offers a total of 246 units in its saleable building, of which 204 units feature 1 bedroom-hall-kitchen (BHK) specifications, while 42 units are 2BHKs. The low-ticket size of these units increases their affordability and, hence, attractiveness for home buyers. Credit challenges * Exposure to execution risk since only 52% of the total project cost was incurred as of April 2020: Aventus Heights is a slum rehabilitation authority (SRA) society consisting of two towers, with a composite building reserved for existing tenants and a saleable building for sale in the open market. As of April 2020, the composite building was constructed up to the 12th floor, while Wings A and C of the saleable building were constructed up to the 14th and 16th floors and Wing B was constructed till the plinth level. The company has incurred a total project cost of INR68.07 crore out of the budgeted project cost of INR130.45 crore, translating into 52% of the budgeted cost, reflecting high execution risk with considerable amount of the construction still left to be completed over the next three to four years. * Exposure to market risk with 64% of the saleable area yet to be sold: During the last 16 months ending April 2020, RSLLP sold a carpet area of 36,333 sq. ft. (36% of the total project area), which translates into a weak sales velocity of 555 sq. ft. per month. With 64% of the project area yet to be sold, the project remains exposed to moderate market risk. * Low collection velocity for the project: Till April 2020, the firm had received only INR12.69 crore of customer advances out of the total sale value of INR46.70 crore. High reliance of the firm on customer advances for funding the project and low level of advances received till April 2020, accentuates the funding risk. Consequently, regular bookings and timely receipt of advances from customers would remain crucial for the smooth progress of the project. Amid the lockdown scenario and associated macro-economic weakness, committed receivables from already booked sales are likely to get impacted as some buyers may delay payments on account of economic/income uncertainties. * Risk of capital withdrawal inherent in the partnership firm: Equity from RSLLP's partners would contribute to 19% of the total project's funding. Given RSLLP's constitution as a limited liability partnership firm, it is exposed to discrete risks including the possibility of withdrawal of capital by the partners and the risk of dissolution of the firm upon the death, retirement or insolvency of the partners. * Intense competition from upcoming projects in the vicinity; weak market condition resulting in inventory pile up: Weak demand in the real estate segment over the last few years has led to pile up of inventory in the project. Furthermore, the project faces stiff competition from several ongoing and completed projects in the vicinity. With the real estate industry being cyclical, this might pose a challenge for the project. * Pandemic induced slowdown and lockdown likely to delay construction work due to labour shortage, and further impact sales realisations as well as pace of bookings: Due to shortage of labour amid the pandemic induced lockdown, the construction work of the project was halted in April 2020. Although construction was resumed in May 2020, its pace has been slow, albeit improving gradually. Further, slowdown in demand led by the lockdown could further affect the project's sales realisation and the pace of bookings. Liquidity position: Stretched RSLLP's liquidity position remains stretched given the low collections from the project and considerable debt repayments to be made in the medium term. Sales value of INR46.70 crore was booked as of April 2020, out of which only INR12.69 crore of advance inflows were received. The firm has a total sanctioned limit of INR49.30 crore for the construction finance loan, out of which RSLLP had availed a loan of INR34.50 crore with scheduled repayments in the range of INR43– INR45 crore over the next three years. The company had a free cash and bank balance of INR6.23 crore as on March 31, 2020. ICRA foresees concerns on liquidity given the low bookings registered in the project as of April 2020 and high reliance on customer advances for residual project funding along with significant debt repayment obligations in FY2022 and FY2023, which are likely to exert pressure on RSLLP's liquidity position to some extent. Rating sensitivities Positive triggers – A rating upgrade could be triggered by the completion of the project within the stipulated time, along with improved pace of bookings and collections, leading to improved visibility of project cash flows. Negative triggers – A delay in completion of the project and slowdown in bookings, with further weakening of collection velocity for the project could trigger a rating downgrade. RSLLP was set up in March 2015 as a limited liability partnership firm. It is a part of the Mumbai-based Aventus Realty Group (erstwhile Ratnaakar Group), which is jointly promoted by Mr. Sukhraj Mehta, Mr. Vinod S. Mehta and Mr. Deven P. Mody. RSLLP is a special purpose vehicle (SPV) established for developing a residential project under the slum rehabilitation scheme in Govandi (East), Mumbai. The scope of the project includes redevelopment of a slum rehabilitation authority (SRA) society located in Govandi (E) by constructing two buildings—i.e., a composite building and a saleable building. The composite building with a carpet area of 59,924 sq. ft. is reserved for the existing tenants, while the saleable building ( 'Aventus Heights') with a carpet area of 99,780 sq. ft. is for up sale in the open market. The project offers affordable, 1 BHK and 2 BHK apartments. REDDY PHARMACEUTICALS: ICRA Cuts Rating on INR10cr Loan to C ------------------------------------------------------------ ICRA has revised the ratings on certain bank facilities of Reddy Pharmaceuticals Limited (RPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term-Fund 2.70 [ICRA]C ISSUER NOT COOPERATING; Based/CC Rating downgraded from [ICRA]C+; removed from Watch with Negative Implications and continues to remain in the 'Issuer Not Cooperating' Category Long Term- 7.30 [ICRA]C ISSUER NOT COOPERATING; Unallocated Rating downgraded from [ICRA]C+; removed from Watch with Negative Implications and continues to remain in the 'Issuer Not Cooperating' Category Rationale The rating downgrade is because of lack of adequate information regarding RPL performance and hence the uncertainty around its credit risk. ICRA assesses whether the information available about the entity is commensurate with its rating and reviews the same as per its "Policy in respect of non-cooperation by a rated entity" available at www.icra.in. The lenders, investors and other market participants are thus advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity, despite the downgrade. As part of its process and in accordance with its rating agreement with Reddy Pharmaceuticals Limited, ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information and in line with the aforesaid policy of ICRA, a rating view has been taken on the entity based on the best available information. Reddy Pharmaceuticals Limited (RPL) was incorporated in 1996 and has been engaged in trading of pharmaceutical products. The company forayed into manufacturing of Active Pharmaceutical Ingredients (APIs) and Intermediates during FY2017 after taking over an existing facility from Jupiter Biotech Limited in Rudraram, Patancheru Mandal, Telangana. The company is currently manufacturing anti-fungal APIs such as Itraconazole. SIEWERT AND DHOLAKIA: ICRA Cuts Rating on INR6.24cr Loan to B+ -------------------------------------------------------------- ICRA has revised the ratings on certain bank facilities of Siewert and Dholakia Overseas Private Limited (SDOPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term-Fund 6.24 [ICRA]B+(Stable) ISSUER NOT Based/CC COOPERATING; Rating downgraded from [ICRA]BB+(Stable) ISSUER NOT COOPERATING and continues to remain in the 'Issuer Not Cooperating' category Short Term–Non 0.20 [ICRA]A4 ISSUER NOT Fund Based COOPERATING; Rating downgraded from [ICRA]A4+ ISSUER NOT COOPERATING and continues to remain in the 'Issuer Not Cooperating' category Rationale The rating downgrade is because of lack of adequate information regarding SDOPL performance and hence the uncertainty around its credit risk. ICRA assesses whether the information available about the entity is commensurate with its rating and reviews the same as per its "Policy in respect of non-cooperation by a rated entity" available at www.icra.in. The lenders, investors and other market participants are thus advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity, despite the downgrade. As part of its process and in accordance with its rating agreement with Siewert and Dholakia Overseas Private Limited, ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information and in line with the aforesaid policy of ICRA, a rating view has been taken on the entity based on the best available information. Siewert and Dholakia Overseas Private Limited (SDOPL) traces its origin to Siewert and Dholakia Private Limited, founded in 1948 by the Dholakia family and Mr. J.G. Siewert. Subsequently, in 1960s, the company's trading operations were taken over by Dholakia family and in 2006, the company was renamed to its current name. At present, the company is involved in export of tea, which it procures from auction centres in Cochin, Coonoor and Coimbatore (for South Indian tea) and Kolkata (for North Indian tea). The company has warehousing facilities in Cochin (~23,000 sq. ft.) and Kolkata (~8,000 sq. ft.), where the tea is blended and packed using manual procedure. The company sells processed tea to large tea traders and manufacturers in Eastern Europe and Asian countries. SITARAM INDIA: ICRA Lowers Rating on INR20cr Cash Loan to B+ ------------------------------------------------------------ ICRA has revised the ratings on certain bank facilities of Sitaram India Limited (SIL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit 20.00 [ICRA]B+ (Stable) ISSUER NOT COOPERATING; Rating downgraded from [ICRA]BB+(Stable) and continues to remain under 'Issuer Not Cooperating' Category Term Loan 24.10 [ICRA]B+ (Stable) ISSUER NOT COOPERATING; Rating downgraded from [ICRA]BB+(Stable) and continues to remain under 'Issuer Not Cooperating' Category Short term-Non 0.93 [ICRA]A4 ISSUER NOT Fund based limit COOPERATING; Rating downgraded from [ICRA]A4+ and continues to remain under 'Issuer Not Cooperating' category Rationale The ratings downgrade is because of lack of adequate information regarding SIL's performance and hence the uncertainty around its credit risk. ICRA assesses whether the information available about the entity is commensurate with its rating and reviews the same as per its "Policy in respect of non-cooperation by the rated entity". The lenders, investors and other market participants are thus advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity, despite the downgrade. As part of its process and in accordance with its rating agreement with Sitaram India Limited, ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information and in line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, ICRA's Rating Committee has taken a rating view based on the best available information. SIL was initially incorporated as "Swagat Synthetics Private Limited (SSPL)" on September 24, 1987 by Shri Jagdish Prasad Nuwal & Shri Anil Nuwal; subsequently, the company was converted into a public limited company and name was changed to "Sitaram India Limited" in 2015. SIL is engaged in manufacturing of fabrics, starting from yarn twisting upto weaving and packing of the finished product. STERLING AND WILSON: Ind-Ra Cuts Long Term Issuer Rating to 'BB+' ----------------------------------------------------------------- India Ratings and Research (Ind-Ra) has downgraded Sterling and Wilson Powergen Private Limited's (SWPPL) Long-Term Issuer Rating to 'IND BB+' from 'IND BBB'. The Outlook is Stable. The instrument-wise rating actions are: -- INR50 mil. Cash credit downgraded with IND BB+/Stable/IND A4+ rating; -- INR225 mil. Term loan due on FY23 downgraded with IND BB+/ Stable /IND A4+ rating; -- INR500 mil. Vendor financing facility downgraded with IND BB+ /Stable/IND A4+ rating; and -- INR1.90 bil. Non-fund-based facilities downgraded with IND BB+ /Stable/IND A4+ rating. Analytical Approach: Ind-Ra continues to take a consolidated view of SWPPL, along with sister concern Sterling Generators Private Ltd. (SGPL; 'IND BB+'/Stable) and all their subsidiaries and associates while arriving at the ratings, due to the operational and strategic linkages among them. The downgrade reflects the reduced ability of SWPPL's parent entities Shapoorji Pallonji and Company Private Limited (SPCPL) and one of SPCPL's group entity Sterling and Wilson Private Limited (SWPL) to support SWPPL due to uncertainty in SWPPL's credit profile. Consequently, SPCPL filed an application to its consortium of bankers to restructure its debt obligations under the Reserve Bank of India's framework for COVID-19 related cash flow disruptions. KEY RATING DRIVERS Ind-Ra expects an uncertainty of an improvement in SWPPL's financial profile to commensurate to the existing rating level, given its tight liquidity and relatively subdued operating performance in 1HFY21. SWPPL's revenue declined to INR2,150 million in 1HFY21 (1HFY20: INR2,680 million) on account of the disruptions caused by the COVID-19 led lockdown, which impacted the operations for over two months in 1HFY21. However, the EBITDA margins turned positive to 1.86% in 1HFY21 owing to the various cost reduction measures adopted by the company for its Middle East operations, leading to a reduction in overseas losses. The company is also focusing on other geographies such Australia for future expansion. SWPPL reduced its external debt to INR1,380 million (including vendor financing but excluding promoter debt) at 1HFYE21 (FYE20: INR1,725 million) from realizations of inventory and receivables. SWPPL had availed the Reserve Bank of India-prescribed moratorium on its vendor financing facility and term loan during June to August 2020, which was successfully paid in September 2020 and beginning of October 2020. The availability of cash flows to meet its debt obligations, along with the timely refinancing and tying up on new facilities will remain key rating monitorables, considering the recent developments of the parent entities. Ind-Ra expects SWPPL's margins to improve 2%-5% in FY21-FY22 on account of receipt of new orders in 1HFY21. Furthermore, the agency expects the interest coverage on external debt (EBITDA/gross interest expense on external debt) on external debt to remain below 1.0x in FY21 (FY20: 0.23x, FY19: 1.16x), although improve to about 1.8x in FY22, on the back of execution of the new order and a likely improvement in the margins. The agency believes that demonstration of the improvement trajectory to achieve these numbers by SWPPL will be crucial for maintaining the ratings at the current level. Liquidity Indicator - Stretched: SWPPL's average peak use of the fund-based and the non-fund-based limits was 89% and 66%, respectively, for the 12 months ended March 2020. It had unrestricted cash and cash equivalents of INR104 million at 1HFYE21 (FYE20: INR223 million). The agency expects the cumulative free cash flow before financial cost of about INR1,550 million during FY21-FY23, which should be sufficient to cover the cumulative debt repayments of INR1,225 million during FY21-FY23. SWPPL does not have any major capex plans in the near term. Ind-Ra expects the company's net working capital cycle to partially normalize to 39 days in FY21 and 24 days in FY22 on the back of strong order book execution. RATING SENSITIVITIES Positive: An improvement in the scale of operations, along with the interest coverage (on external debt) increasing above 2.0x by FY22 will lead to a positive rating action. Negative: Lower-than-expected scale of operations and/or delays in the recovery of working capital cycle and/or lower margins, resulting in the interest coverage ratio (on external debt) remaining below 1.5x by FY22, will lead to a negative rating action. COMPANY PROFILE SGPL and SWPPL were incorporated in 1995. SGPL manufactures diesel generators sets while SWPPL markets and distributes the same. Both the entities are 56% each owned by SPCPL and the rest by the Kainaz Daruvala and Khurshed Daruvala. In FY19, both the entities filed for amalgamation for improved cost synergies. In FY20, SGPL and SWPPL operated as a combined entity with the National Company Law Tribunal's approval pending for the amalgamation. Post approvals, SGPL will cease to exist. Over the years, SGPL has expanded its product portfolio into high tension/low tension panels, solar customer self-supply, wind energy and type-tested assembly panels, power systems for data centers and container data centers. SGPL and SWPPL have presence in India, Middle East, Africa and are setting up an additional office in Australia. STERLING GENERATORS: Ind-Ra Cuts Long Term Issuer Rating to 'BB+' ----------------------------------------------------------------- India Ratings and Research Private Limited (Ind-Ra) has downgraded Sterling Generators Private Limited's (SGPL) Long-Term Issuer Rating to 'IND BB+' from 'IND BBB'. The Outlook is Stable. The instrument-wise rating actions are: -- INR300 mil. Cash credit downgraded with IND BB+/Stable/IND A4+ rating; -- INR300 mil. Working capital demand loan downgraded with IND BB+/Stable/IND A4+ rating; -- INR107.4 mil. Short-term loan due on FY22 downgraded with IND BB+/Stable/IND A4+ rating; -- INR250 mil. Vendor financing facility downgraded with IND BB+/Stable/IND A4+ rating; and -- INR655 mil. Non-fund-based facilities downgraded with IND BB+ /Stable/IND A4+ rating. Analytical Approach: Ind-Ra continues to take a consolidated view of SGPL, along with sister concern Sterling and Wilson Powergen Private Ltd. (SWPL, 'IND BB+'/Stable) and all their subsidiaries and associates while arriving at the ratings, due to the operational and strategic linkages among them. The downgrade reflects the reduced ability of SGPL's parent entities Shapoorji Pallonji and Company Private Limited (SPCPL) and one of SPCPL's group entity Sterling and Wilson Private Limited (SWPL) to support SGPL as a result of uncertainty in SGPL's credit profile. Consequently, SPCPL filed an application to its consortium of bankers to restructure its debt obligations under the Reserve Bank of India's framework for COVID-19-related cash flow disruptions. KEY RATING DRIVERS Ind-Ra expects an uncertainty of an improvement in SGPL's financial profile to commensurate to the existing rating level, given its tight liquidity and relatively subdued operating performance in 1HFY21. SGPL's revenue declined to INR2,150 million in 1HFY21 (1HFY20: INR2,680 million) on account of the disruptions caused by the COVID-19 led lockdown, which impacted the operations for over two months in 1HFY21. However, the EBITDA margins turned positive to 1.86% in 1HFY21 owing to the various cost reduction measures adopted by the company for its Middle East operations, leading to a reduction in overseas losses. The company is also focusing on other geographies such Australia for future expansion. SGPL reduced its external debt to INR1,380 million (including vendor financing but excluding promoter debt) at 1HFYE21 (FYE20: INR1,725 million) from realizations of inventory and receivables. SGPL had availed the Reserve Bank of India-prescribed moratorium on its vendor financing facility and term loan during June to August 2020, which was successfully paid in September 2020 and beginning of October 2020. The availability of cash flows to meet its debt obligations, along with the timely refinancing and tying up on new facilities will remain key rating monitorables, considering the recent developments of the parent entities. Ind-Ra expects SGPL's margins to improve 2%-5% in FY21-FY22 on account of receipt of new orders in 1HFY21. Furthermore. the agency expects the interest coverage on external debt (EBITDA/gross interest expense on external debt) to remain below 1.0x in FY21 (FY20: 0.23x, FY19: 1.16x), although improve to about 1.8x in FY22, on the back of execution of the new order and a likely improvement in the margins. The agency believes that demonstration of the improvement trajectory to achieve these numbers by SGPL will be crucial for maintaining the ratings at the current level. Liquidity Indicator - Stretched: SGPL's average peak use of the fund-based and the non-fund-based limits was 89% and 66%, respectively, for the 12 months ended March 2020. It had an unrestricted cash and cash equivalents of INR104 million at 1HFYE21 (FYE20: INR223 million). The agency expects the cumulative free cash flow before financial cost of about INR1,550 million during FY21-FY23, which should be sufficient to cover the cumulative debt repayments of INR1,225 million during FY21-FY23. SGPL does not have any major capex plans in the near term. Ind-Ra expects the company's net working capital cycle to partially normalize to 39 days in FY21 and 24 days in FY22 on the back of strong order book execution. RATING SENSITIVITIES Positive: An improvement in the scale of operations, along with the interest coverage (on external debt) increasing above 2.0x by FY22, will lead to a positive rating action. Negative: Lower-than-expected scale of operations and/or delays in the recovery of working capital cycle and/or lower margins, resulting in the interest coverage ratio (on external debt) remaining below 1.5x by FY22, will lead to a negative rating action. COMPANY PROFILE SGPL and SWPPL were incorporated in 1995. SGPL manufactures diesel generators sets while SWPPL markets and distributes the same. Both the entities are 56% each owned by SPCPL and the rest by the Kainaz Daruvala and Khurshed Daruvala. In FY19, both the entities had filed for amalgamation with a view to have better cost synergies. In FY20, SGPL and SWPPL operated as a combined entity with the National Company Law Tribunal's approval pending for the amalgamation. Post approvals, SGPL will cease to exist. Over the years, SGPL has expanded its product portfolio into high tension/low tension panels, solar customer self-supply, wind energy and type-tested assembly panels, power systems for data centre and container data centers. SGPL and SWPPL have presence in India, Middle East, Africa and are setting up an additional office in Australia. SUPERIOR FILMS: Ind-Ra Cuts LT Issuer Rating to BB/Not Cooperating ------------------------------------------------------------------ India Ratings and Research (Ind-Ra) has downgraded Superior Films Private Limited's Long-Term Issuer Rating to 'IND BB' from 'IND BBB-' and has simultaneously migrated it to the non-cooperating category. The issuer did not participate in the surveillance exercise despite continuous requests and follow-ups by the agency. Thus, the rating is based on the best-available information. Therefore, investors and other users are advised to take appropriate caution while using the ratings. The rating will now appear as 'IND BB (ISSUER NOT COOPERATING)' on the agency's website. The instrument-wise rating actions are: -- INR622.2 mil. Term Loan due on May 2029 downgraded and migrated to non-cooperating category with IND BB (ISSUER NOT COOPERATING) rating; and -- INR11.3 mil. Non-fund based limit 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 of deterioration in the company's operating and financial profile in FY21 on account of the COVID-19 led operational disruptions in the entertainment sector. The ratings have been migrated to the non-cooperating category as the company has not provided the agency with the audited balance sheet for FY20, revised projections, sanction letters and updated management certificate despite continuous requests and follow-ups. COMPANY PROFILE Incorporated in 1980, Superior Films operates three multiplexes in New Delhi, which are given on a long-term lease to INOX Leisure Limited. SURAT WOVENSACKS: ICRA Keeps B+ Debt Ratings in Not Cooperating --------------------------------------------------------------- ICRA said the ratings for the INR13.60 crore bank facilities of Surat Wovensacks Industries LLP continue to remain under the 'Issuer Not Cooperating' category. The rating is denoted as "[ICRA]B+(Stable); ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based- 5.00 [ICRA]B+(Stable) ISSUER NOT Working Capital COOPERATING; Rating continues Facilities to remain under the 'Issuer Not Cooperating' category Fund based- 8.60 [ICRA]B+(Stable) ISSUER NOT Term Loan COOPERATING; Rating continues to remain under the 'Issuer Not Cooperating' category As part of its process and in accordance with its rating agreement with Surat Wovensacks Industries LLP, ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. In the absence of requisite information and in line with SEBI's Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated November 1, 2016, ICRA's Rating Committee has taken a rating view based on the best available information. Established in October 2015, Surat Wovensacks Industries LLP (SWIL), manufactures high density poly ethylene and poly propylene (HDPE & PP) woven fabrics (laminated and non-laminated). The firm started its commercial operations in August 2016 from its manufacturing facility at Magrol, in Surat, with an installed capacity to manufacture 3960 Metric Tonnes (MT) fabrics. The firm is managed by Mr. Anil Pugliya and Mr. Harjeet Singh Chhabra In FY2017, the company on a provisional basis reported a net loss of INR0.70 crore on an operating income of INR10.96 crore. VENKATESWARA RICE: ICRA Keeps D Debt Ratings in Not Cooperating --------------------------------------------------------------- ICRA said the ratings for the INR75.00-crore bank facilities of Sri Venkateswara Rice Industries Private Limited continue to remain under 'Issuer Not Cooperating' category'. The ratings are denoted as "[ICRA]D ISSUER NOT COOPERATING". Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term-Fund 70.00 [ICRA]D ISSUER NOT COOPERATING; Based/CC Rating continues to remain in the 'Issuer Not Cooperating' category Long Term-Fund 0.30 [ICRA]D ISSUER NOT COOPERATING; Based TL Rating continues to remain in the 'Issuer Not Cooperating' category Long Term- 4.70 [ICRA]D ISSUER NOT COOPERATING; Unallocated Rating continues to remain in the 'Issuer Not Cooperating' category ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. The rating action has been taken in accordance with ICRA's policy in respect of non-cooperation by a rated entity available at www.icra.in. Founded in the year 2005, as a partnership firm Sri Venkateswara Rice Industries (SVRI) is engaged in the milling of paddy and produces raw & boiled rice. In September 2015, company has been reconstituted as private limited company and has been renamed as Sri Venkateswara Rice Industries Private Limited (SVRIPL). The milling unit is located at Kodada village of Nalgonda district, Telangana with milling capacity of 24 tons per hour (TPH). VERTEX TECHNO: ICRA Lowers Rating on INR3.50cr LT Loan to B+ ------------------------------------------------------------ ICRA has revised the ratings on certain bank facilities of Vertex Techno Solutions Bangalore Pvt. Ltd. (VTSBPL), as: Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term-Fund 3.50 [ICRA]B+ (Stable); ISSUER NOT Based/CC COOPERATING; Rating downgraded from [ICRA]BB+ (Stable) and moved to the 'Issuer Not Cooperating' category Short Term-Non 1.50 [ICRA] A4; ISSUER NOT Fund Based COOPERATING; Rating downgraded from [ICRA]A4+ and moved to the 'Issuer Not Cooperating' Category ICRA has moved the long-term and short-term ratings for the bank facilities of VTSBPL to the 'Issuer Not Cooperating' category. The rating is now denoted as "[ICRA]B+ (Stable)/A4; ISSUER NOT COOPERATING". ICRA has been trying to seek information from the entity so as to monitor its performance, but despite repeated requests by ICRA, the entity's management has remained non-cooperative. The current rating action has been taken by ICRA basis best available/dated/limited information on the issuers' performance. Accordingly, the lenders, investors and other market participants are advised to exercise appropriate caution while using this rating as the rating may not adequately reflect the credit risk profile of the entity. Established in 1993 as a partnership firm, VTSBPL was reconstituted as a private limited in 2006. It offers end to end IT infrastructure solutions and services to SMB's (small to mid-sized businesses) and enterprises across government and private sector. VTSBPL is one of the largest HP (Hewlett-Packard) platinum business partner in India for their range of products spanning across enterprise servers, storage, networking (ESSN), and personal computers & printing solutions (PPS). In the services segment, VTSBPL offers Annual Maintenance Contracts (AMC), Facility Management Services (FMS) & Managed IT Services. The company's head office is in Bangalore, while it has branch offices at Kochi, Trivandrum and Chennai. In March 2016, VTSBPL was recognised as the Most Valuable PPS partner of the year, which is amongst the most prestigious recognition for a HP partner. ========= J A P A N ========= ALL NIPPON: Plans Salary Cuts, No Winter Bonuses ------------------------------------------------ The Asahi Shimbun reports that All Nippon Airways Co. (ANA), hit hard by the novel coronavirus pandemic, plans to slash base salaries, withhold winter bonuses and reduce its workforce through voluntary retirement packages. The airline submitted the plan to its labor union on Oct. 7, sources said. ANA had already reduced the size of its summer bonuses, so employees' annual salaries would decrease by about 30 percent on average if the latest measures are taken, Asahi Shimbun says. The reduction rate of the base salaries and the number targeted for voluntary retirement have not been disclosed, the report notes. According to the report, the COVID-19 pandemic led to a year-on-year decrease of 89.8 percent in ANA group passenger numbers for domestic flights between April and June and a plunge of 96.3 percent for international flights. For that quarter, ANA's holding company posted its biggest-ever net loss of JPY108.8 billion ($1 billion), Asahi Shimbun discloses. Asahi Shimbun says ANA had offered summer and winter bonuses equal to six months of salary in fiscal 2018. But as its financial situation worsened because of the virus, ANA reduced the summer bonus to one month worth of salary. Asahi Shimbun relates that ANA proposed the further reductions to the union because it could not predict when the pandemic will be contained. The airline said it will not seek voluntary retirement among its pilots. ANA has 15,000 employees. It plans to propose similar measures to reduce personnel costs for 33,000 other employees in its corporate group, the report says. Headquartered in Tokyo, All Nippon Airways Co., Ltd., is Japan's second-largest airline by revenue, with domestic and international passenger and cargo and mail operations, and travel services. [*] JAPAN: Coronavirus-Linked Business Failures Reach 600 --------------------------------------------------------- The Japan Times reports that the cumulative number of corporate bankruptcies due to the impacts of the novel coronavirus epidemic reached 600 in Japan on Oct. 7, Tokyo Shoko Research Ltd. said. The pace of growth in business failures has been accelerating since last month, the credit research firm noted, the report relays. While companies have been supported by funding measures from the government, those with poor financial standings are going bust in the face of the prolonged impact of the epidemic, a Tokyo Shoko Research official said. Of the total, the number of coronavirus-linked bankruptcies with debts of JPY10 million or more totaled 571, The Japan Times discloses. The Japan Times says the number of such bankruptcies stood at 103 in June, 80 in July, 67 in August and 100 in September. By industry, the restaurant sector was hit hardest by the virus crisis with 90 bankruptcies, followed by the apparel sector with 63 and the lodging industry with 50. "Bankruptcies may grow at year-end, when demand for funds expands," the official warned. ===================== P H I L I P P I N E S ===================== FORSAGE AND FORSAGE: SEC Orders Shutdown of 'Gullibility' Scheme ---------------------------------------------------------------- BusinessWorld Online reports that the Securities and Exchange Commission (SEC) has ordered the closure of Forsage and Forsage Philippines for activities involving the illegal solicitation of investments. In a statement on Sept. 30, the corporate regulator said it issued a cease-and-desist order to Forsage on Sept. 17, ordering it to stop selling securities to the public in the form of investment contracts, BusinessWorld relates. BusinessWorld says the company was also prohibited from using funds from its depository banks to preserve the assets it took from investors. According to BusinessWorld, the SEC first issued a warning to the public against engaging with Forsage in June, noting it received several complaints about the group's investment activities. At the onset, the SEC said Forsage was not a registered business with the commission. It found through its investigation that Forsage invites investors to take part in a crowdfunding platform that uses blockchain technology. Through selling commission programs, the group promises passive income to investors. However, the SEC said Forsage's income relies on the membership fees it collects from investors, which makes it unsustainable. Its activities are also unauthorized, as the selling of securities is regulated by the SEC. "Forsage is not registered . . ., nor has it been issued a secondary license to operate as a broker dealer of securities or issuer of any securities or of mutual funds," the SEC said. Despite the warning of the SEC in June, the company continued to operate, hence the decision of the regulator to issue a cease-and-desist order, the report states. "[T]he investment practices of Forsage, if not restrained, will operate as a fraud on investors or to the investing public as it utilizes a 'Ponzi scheme'," the SEC, as cited by BusinessWorld, said. "It is not an investment strategy but a gullibility scheme, which works only as long as there is an ever increasing number of new investors joining the scheme," it added. Forsage is the latest in the SEC's list of unauthorized investment operators ordered to shut down this year. The others are Fast Track Worldwide, Inc.; JOCALS688 Beauty and Wellness Products Trading, Inc.; Building Our Success Stories Network, Inc.; CROWD1 Asia Pacific, Inc.; Lion City Finance Group, Inc.; and Payasian Pte. Ltd. Corp. ================= S I N G A P O R E ================= ALPHA ENERGY: Auditor Issues Disclaimer of Opinion -------------------------------------------------- Claudia Tan at The Business Times reports that Alpha Energy Holdings said on Oct. 7 that independent auditor Nexia TS Public Accounting Corporation has issued a disclaimer of opinion in the group's financial statements for the financial year ended Dec. 31, 2019 (FY2019). With the financial statements prepared on a going-concern basis, Nexia has written that it is "unable to obtain sufficient audit evidence to be able to form an opinion as to whether the going-concern basis of preparation of the accompanying financial statements of the group or company is appropriate". The financial statements had been prepared on a going-concern basis based on assumptions which were "premised on future events and market conditions". However, Alpha Energy's board said that it believes that the group is able to continue as a going-concern with the completion of the acquisition of Kydon Learning Systems Institute and the proposed capital investment in the form of a convertible loan of S$24.0 million, BT relays. It had also in July entered into a S$1 million short-term loan agreement with Didi Investments; in September, it entered into a forbearance-and-release agreement with a provider of a bank loan, the report relays. For FY2019, the group's current liabilities exceeded its current assets by US$165.42 million, BT discloses. In addition, the group incurred a net loss of US$190.80 million and recorded net operating cash outflows of US$3.16 million during the financial year. BT relates that Nexia TS Public Accounting wrote: "The group has also ceased to generate revenue from its business of the sale of crude oil as the drop in oil prices, coupled with the Covid-19 situation affecting the global oil demand, had stifled its hopes of obtaining a favourable outcome for the funding required to continue with the development of the group's exploration and evaluation assets in relation to the Mustang Project." Certain creditors have also filed liens against certain assets, taken legal action against the group to recover outstanding amounts due to them, and filed claims for certain damages, according to BT. BT relates that the auditor also noted that consolidated financial statements do not reflect adjustments that may be recognised by the group from various legal claims. Adjustments will also have to be made to reflect the situation that assets may need to be realised under circumstances other than in the normal course of business and at amounts which could differ significantly from the amounts at which they are currently recorded. Alpha Energy called for the suspension of its shares on Nov. 18, 2019, BT adds. Alpha Energy Holdings Limited operates as a holding company. The Company, through its subsidiaries, focuses on the development of independently certified oil and gas assets. Alpha Energy Holdings serves customers worldwide. INTER-PACIFIC PETROLEUM: Cordlife Chair Steps Down as JM Sue ------------------------------------------------------------ Ann Williams at The Straits Times reports that Dr Goh Jin Hian has stepped down as chairman of mainboard-listed Cordlife Group after news broke that he is being sued by the judicial managers of a failed marine fuels supplier over US$156 million (SGD212.6 million) in losses due to alleged breach of director's duties. "In view of the above, in order to devote more time to his personal affairs, Dr Goh will be stepping down as chairman of the board with immediate effect, but will continue to serve as ID (independent director) of the company," Cordlife announced in a filing with the Singapore Exchange just before midnight on Oct. 5, ST relays. Vice-chairman and independent director Ho Choon Hou has been appointed acting chairman with immediate effect, it added. On Oct. 5, The Straits Times reported a suit against Dr Goh, who is the son of former prime minister Goh Chok Tong, was filed last Friday night (Oct 2) in Singapore's High Court for Deloitte & Touche, the judicial managers of Inter-Pacific Petroleum. According to the report, Dr Goh has also had his passport retained as a result of an unrelated probe by the Singapore Police's Commercial Affairs Department (CAD) into a possible offence under the Securities and Futures Act involving New Silkroutes Group, of which he retired last week as chief executive but remains as non-executive chairman. In its Monday night announcement [Oct. 5], Cordlife said its nominating committee (NC) and board had "just been made aware" of the suit being filed, ST relates. It also said that its NC and board--with Dr Goh abstaining--believe that he "has the character and integrity suitable to continue as ID of the company", and that it is in the best interests of the company that he does so "given his qualifications, expertise and experience". It added that: "At this juncture, the cessation of Dr Goh's role as chairman will allow Dr Goh to continue ensuring that sufficient time and attention is given to the affairs the company as ID," ST relays. ST says Dr Goh's exit as chairman came on the same day that Cordlife's NC and board had earlier reiterated its support for him as chairman and ID in response to an SGX query on his suitability, given listing rules requiring a company to, among others, consider the character and integrity of directors and management. But not satisfied with Cordlife's response on Oct. 5, SGX again queried the company, Cordlife's Monday night filing [Oct. 5] disclosed, with the regulator stating that the board and NC had not provided its opinion on Dr Goh's suitability as well as the bases for it, according to ST. In response, Cordlife said it had fully disclosed such, it being that, based on the information available to the company then, the NC and board believed Dr Goh had character and integrity suitable to continue as chairman and ID and that it was in the best interests of the company for him to do so, adds ST. As reported in the Troubled Company Reporter-Asia Pacific on Sept. 6, 2019, Deloitte & Touche said on Sept. 5 it has been appointed by Singapore's high court to act as interim judicial manager for Inter-Pacific Group Pte (IPG) in an application for a court-led debt restructuring process. The appointment, following a nomination by IPG, comes more than two months after IPG unit Inter-Pacific Petroleum Pte (IPP) had a licence to operate bunker fuel tankers suspended by Singapore's Maritime Port Authority (MPA). The MPA detected operational irregularities during an inspection. ================= S R I L A N K A ================= ABANS FINANCE: Fitch Places 'BB+(lka)' Rating on Watch Evolving --------------------------------------------------------------- Fitch Ratings has placed Abans Finance PLC's (AFP) National Long-Term Rating of 'BB+(lka)' on Rating Watch Evolving (RWE). This follows AFP's announcement on the Colombo Stock Exchange on September 29, 2020 that Softlogic Capital PLC (SC) will acquire 49.67% of AFP from Abans PLC - AFP's parent - and then amalgamate with SC's majority-owned Softlogic Finance PLC. AFP's rating is driven by its expectation of support from Abans PLC until the acquisition is completed. KEY RATING DRIVERS The RWE reflects Fitch's view that AFP's rating could be upgraded, downgraded, or remain the same, depending on its assessment of the ability and propensity of its new ultimate parent - Softlogic Holdings PLC (SH) - to support the surviving entity, Softlogic Finance PLC, or the standalone credit strength of the surviving entity. Currently, AFP's rating on a standalone basis would be below 'BB+(lka)'. Post-acquisition, Fitch expects SC to make a mandatory offer to the minority shareholders of AFP after which it is likely to have a shareholding in excess of 49.67% in AFP. Immediately after the completion of the mandatory offer, SC intends to amalgamate AFP in to Softlogic Finance PLC, a 73.05%-owned subsidiary of SC, and as such AFP will cease to exist. The rating watch will remain until the conclusion of the transaction and the resolution will be dependent on access to additional information. RATING SENSITIVITIES Fitch expects to resolve the Rating Watch on completion of the sale with the potential for the watch to be extended if Fitch can get more clarity on the ability and propensity of the new ultimate parent, SH, to support the surviving entity and the standalone credit strength of the surviving entity. When assessing support, Fitch would factor in the credit strength of the main shareholder as well as assess its willingness to provide extraordinary support in times of need. Fitch will remove the RWE if the transaction does not proceed. The rating would then remain driven by support from Abans PLC. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS AFP's rating is driven by support from Abans PLC. ********* 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 2020. 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. 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