/raid1/www/Hosts/bankrupt/TCRAP_Public/210222.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Monday, February 22, 2021, Vol. 24, No. 32
Headlines
A U S T R A L I A
CLOUD ABACUS: Second Creditors' Meeting Set for March 1
INTO APP: Second Creditors' Meeting Set for Today
JMW TRAVEL: First Creditors' Meeting Set for March 1
WALDEN CLOUD: Second Creditors' Meeting Set for March 1
YOUTEAM PTY: Second Creditors' Meeting Set for March 1
C H I N A
IDEANOMICS INC: Enters Into $80MM Convertible Debenture Financing
H O N G K O N G
CONVOY GROUP: Reports Three Years of Financial Losses
[*] HONG KONG: Number of Wind Up Petitions Up by 28.6% in January
I N D I A
AATULYA LIFECARE: CARE Moves D Debt Rating to Not Cooperating
ACDC SAIDEEP: CRISIL Lowers Rating on INR5cr Cash Loan to B-
ANDHRA CEMENTS: CARE Reaffirms D Rating on INR910.79cr LT Loan
ANSHU AUTOMOTIVES: CRISIL Keeps B+ Debt Rating in Not Cooperating
APACE BUILDERS: Insolvency Resolution Process Case Summary
ASTHA BEEJ: CRISIL Keeps B+ Debt Ratings in Not Cooperating
CHIDANAND BASAPRABHU: Ind-Ra Affirms 'B+' LongTerm Issuer Rating
CICO TECHNOLOGIES: Ind-Ra Lowers LongTerm Issuer Rating to 'BB-'
DAWAR INTERNATIONAL: Insolvency Resolution Process Case Summary
EMCO ELECTRODYNE: CARE Lowers Rating on INR7cr LT Loan to B
HARIOM INGOTS: Ind-Ra Affirms BB+ LT Issuer Rating, Outlook Stable
HEMKUNT RICE: CRISIL Keeps B+ Debt Ratings in Not Cooperating
HVR PROJECTS: CARE Keeps B Debt Rating in Not Cooperating
I FOUR: CRISIL Keeps B+ Debt Ratings in Not Cooperating Category
JAIDEEP SHIKSHA: CARE Lowers Rating on INR7.25cr LT Loan to B
JAMSHEDPUR MINERALS: CRISIL Cuts Rating on INR11cr Loans to B
JML MARKETINGS: CARE Lowers Rating on INR34.90cr LT Loan to D
KANHAIYA LAL: CARE Lowers Rating on INR4.0cr LT Loan to B+
KUNAL FOUNDER: CARE Lowers Rating on INR4.40cr LT Loan to B-
LAKSHMI VILAS: DBS Faces Lawsuits in Post-Takeover of Bank
MAHAMAYA FOODS: CARE Lowers Rating on INR6.0cr LT Loan to B
MAKTEL CONTROL: Insolvency Resolution Process Case Summary
MANGALDEEP COLD: CARE Lowers Rating on INR7.87cr LT Loan to B-
NEW LAXMI: CARE Lowers Rating on INR33.50cr LT Loan to B+
NICE PROJECTS: Insolvency Resolution Process Case Summary
NILGIRI DAIRY: CARE Reaffirms B Rating on INR15cr LT Loan
OASIS MARINE: Insolvency Resolution Process Case Summary
PALA DIOCESAN: Ind-Ra Hikes Bank Facilities Rating to 'BB-'
PHPC ASSOCIATES: CARE Lowers Rating on INR10cr LT Loan to B+
PITTI CASTINGS: Ind-Ra Hikes LongTerm Issuer Rating to 'B+'
PRABHU DAYAL: CARE Lowers Rating on INR6.0cr LT Loan to D
ROUT INFRASTRUCTURE: CARE Lowers Rating on INR7.0cr Loan to B+
SHETH DEVELOPERS: CARE Lowers Rating on INR10cr LT Loan to B
SHREE INDUSTRIES: CARE Lowers Rating on INR11cr Loan to B
STERLING GATED: CARE Moves D Debt Rating to Not Cooperating
SUNILHITECH SOLAR: CARE Lowers Rating on INR20.98cr Loan to B+
UNITED MACHINERY: CARE Cuts Rating on INR3.0cr Loan to B-
UNIVERSAL STAINLESS: CARE Assigns B Rating to INR0.77cr Loan
VIKRAM INFRASTRUCTURE: Ind-Ra Cuts LongTerm Issuer Rating to 'D'
VIRUTCHAM MICROFINANCE: Ind-Ra Assigns BB+ Rating, Outlook Stable
VL FARMS: CARE Keeps D Debt Rating in Not Cooperating Category
VRV ENGINEERS: Insolvency Resolution Process Case Summary
M A L A Y S I A
AIRASIA GROUP: Proposes Incentive Scheme for Directors, Employees
S I N G A P O R E
XIHE CAPITAL: Court Puts Subsidiaries Under Judicial Management
S O U T H K O R E A
SSANGYONG MOTOR: Extends Plant Suspension Until Middle of This Week
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A U S T R A L I A
=================
CLOUD ABACUS: Second Creditors' Meeting Set for March 1
-------------------------------------------------------
A second meeting of creditors in the proceedings of Cloud Abacus
Holdings Pty Ltd and Odyns Holdings Pty Ltd has been set for March
1, 2021, at 3:00 p.m. The meeting of creditors will be held by
telephone conference.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Feb. 26, 2021, at 4:00 p.m.
Paul A. Allen and Jason G. Stone of PKF Australia were appointed as
administrators of Cloud Abacus on July 20, 2020.
INTO APP: Second Creditors' Meeting Set for Today
-------------------------------------------------
A second meeting of creditors in the proceedings of Into App Pty
Ltd has been set for Feb. 22, 2021, at 9:00 a.m. by
teleconference.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend were advised proofs and proxies should
be submitted to the Administrator by Feb. 19, 2021, at 4:00 p.m.
John Maxwell Morgan of BCR Advisory was appointed as administrator
of Into App Pty on Jan. 15, 2021.
JMW TRAVEL: First Creditors' Meeting Set for March 1
----------------------------------------------------
A first meeting of the creditors in the proceedings of JMW Travel
Pty. Ltd., trading as ACN 139 667 173 formerly trading as
'helloworld Travel Monbulk', 'helloworld Travel Bentleigh', 'nexus
Volunteer Connection', 'nexus Business Travel' and 'dandenong
Ranges Travel Expo' has been set for March 1, 2021, at 11:00 a.m.
via teleconferencing facility.
Domenico Alessandro Calabretta and Thyge Trafford-Jones of Mackay
Goodwin were appointed as administrators of JMW Travel on Feb. 17,
2021.
WALDEN CLOUD: Second Creditors' Meeting Set for March 1
-------------------------------------------------------
A second meeting of creditors in the proceedings of Walden Cloud
Group Pty. Ltd. ATF The Walden Cloud Group Trust, trading as
Peppers The Sands Torquay has been set for March 1, 2021, at 10:30
a.m. The meeting of creditors will be held by telephone
conference.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Feb. 26, 2021, at 4:00 p.m.
Paul A. Allen and Jason G. Stone of PKF Australia were appointed as
administrators of Walden Cloud on July 11, 2020.
YOUTEAM PTY: Second Creditors' Meeting Set for March 1
------------------------------------------------------
A second meeting of creditors in the proceedings of Youteam Pty Ltd
has been set for March 1, 2021, at 3:00 p.m. The meeting of
creditors will be held by telephone conference.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by Feb. 26, 2021, at 4:00 p.m.
Paul A. Allen and Jason G. Stone of PKF Australia were appointed as
administrators of Youteam Pty on July 20, 2020.
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C H I N A
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IDEANOMICS INC: Enters Into $80MM Convertible Debenture Financing
-----------------------------------------------------------------
Ideanomics, Inc., entered into a convertible debenture dated Feb.
8, 2021 with YA II PN, Ltd. with a principal amount of $80,000,000.
The Note has a fixed conversion price of $4.95. The Conversion
Price is not subject to adjustment except for subdivisions or
combinations of common stock. The Principal and the interest
payable under the Note will mature on Aug. 8, 2021, unless earlier
converted or redeemed by the Company. At any time before the
Maturity Date, the Investor may convert the Note at their option
into shares of Company common stock at a fixed conversion price of
$4.95. The Company has the right, but not the obligation, to redeem
a portion or all amounts outstanding under this Note prior to the
Maturity Date at a cash redemption price equal to the Principal to
be redeemed, plus accrued and unpaid interest, if any; provided
that the Company provides Investor with at least 15 business days'
prior written notice of its desire to exercise an Optional
Redemption and the volume weighted average price of the Company's
common stock over the 10 Business Days' immediately prior to such
redemption notice is less than the Conversion Price. The Investor
may convert all or any part of the Note after receiving a
redemption notice, in which case the redemption amount shall be
reduced by the amount so converted. No public market currently
exists for the Note, and the Company does not intend to apply to
list the Note on any securities exchange or for quotation on any
inter-dealer quotation system. The Note contains customary events
of default, indemnification obligations of the Company and other
obligations and rights of the parties.
About Ideanomics
Ideanomics is a global company focused on the convergence of
financial services and industries experiencing technological
disruption. Its Mobile Energy Global (MEG) division is a service
provider which facilitates the adoption of electric vehicles by
commercial fleet operators through offering vehicle procurement,
finance and leasing, and energy management solutions under its
innovative sales to financing to charging (S2F2C) business model.
Ideanomics Capital is focused on disruptive fintech solutions and
services across the financial services industry. Together, MEG and
Ideanomics Capital provide their global customers and partners with
leading technologies and services designed to improve transparency,
efficiency, and accountability, and its shareholders with the
opportunity to participate in high-potential, growth industries.
The company is headquartered in New York, NY, with offices in
Beijing, Hangzhou, and Qingdao, and operations in the U.S., China,
Ukraine, and Malaysia.
Ideanomics reported a net loss of $96.83 million for the year ended
Dec. 31, 2019, compared to a net loss of $28.42 million for the
year ended Dec. 31, 2018. As of Sept. 30, 2020, the Company had
$138.46 million in total assets, $49.33 million in total
liabilities, $1.26 million in convertible redeemable preferred
stock, $7.37 million in redeemable non-controlling interest, and
$80.50 million in total equity.
B F Borgers CPA PC, in Lakewood, Colorado, the Company's auditor
since 2018, issued a "going concern" qualification in its report
dated March 16, 2020, citing that the Company incurred recurring
losses from operations, has net current liabilities and an
accumulated deficit that raise substantial doubt about its ability
to continue as a going concern.
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H O N G K O N G
=================
CONVOY GROUP: Reports Three Years of Financial Losses
-----------------------------------------------------
Chad Bray at The South China Morning Post reports that Convoy Group
Holdings, the financial services company at the centre of Hong
Kong's biggest corporate scandal, reported it made annual losses in
2017, 2018 and 2019 on Feb. 18 as costs mounted from ring-fencing a
group of troubled subsidiaries.
The Post relates that the firm, one of the most prominent advisers
to Hong Kong's pension savings scheme, warned on February 3 that it
would report net losses for those years primarily due to de-risking
and restructuring its operations following a scandal that saw its
former director Roy Cho Kwai-chee and two associates criminally
charged.
The trio was prosecuted and acquitted in November 2020 of
conspiring to defraud HK$89 million (US$11.5 million) from Convoy,
but the Independent Commission Against Corruption (ICAC) is
appealing the decision, the Post says.
Since December 2017, the new management team has been working on
"the total revamp of corporate organisation, re-strategising the
company's long-term business vision, and strengthening corporate
governance and control of the company," Convoy said in one of a
series of stock exchange filings on Feb. 18, the Post relays.
It marked the first time that Convoy has released any financial
results since it reported interim results in August 2017. Convoy
reported a loss of HK$104.2 million for the full year of 2016 and
an unaudited loss of HK$141.97 million for the first half of 2017,
the Post discloses.
The latest results featured nearly HK$851 million in impairments of
financial assets, goodwill and an investment in an associated
company that it later sold, First Credit Financial Group.
The Post says the company also reported higher operating expenses
over those three years in part because of increased legal and
professional fees "as significant effort has been used for evidence
gathering, vetting and legal actions," the company said in its
profit warning earlier this month.
Since late 2017, Convy said it had been involved in at least 17
legal cases its considers material, including 10 initiated by the
company and seven brought against it, the Post recalls.
Convoy had hoped to report its results by the end of January but
missed that deadline.
According to the Post, the resumption of reporting marks a
milestone for Convoy, one of the largest independent financial
advisers in Hong Kong and a manager of the city's Mandatory
Provident Fund (MPF), as the company tries to move past a scandal.
Trading in its shares has been halted since December 2017 following
a high-profile joint investigation by the Securities and Futures
Commission (SFC) and ICAC in multiple allegations of fraud related
to an estimated HK$4 billion (US$516 million) in transactions, the
Post notes.
The Hong Kong stock exchange moved to delist its shares last year,
which Convoy is challenging. The resumption of its financial
reporting could play a major role in whether Convoy can retain its
listing in Hong Kong, the report notes.
Convoy Global Holdings Limited, formerly Convoy Financial Holdings
Limited, is an investment holding company principally engaged in
financing related business.
[*] HONG KONG: Number of Wind Up Petitions Up by 28.6% in January
-----------------------------------------------------------------
The Standard reports that the number of petitions for bankruptcy
fell by 5.3 percent year-on-year to 666 in last month, data from
the Official Receiver's Office showed.
Compared with December last year, filings fell by 6.6 percent, The
Standard discloses.
However, the number of compulsory winding-up petitions increased by
28.6 percent year-on-year to 54 in January. These were up by 35
percent month-on-month, The Standard adds.
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I N D I A
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AATULYA LIFECARE: CARE Moves D Debt Rating to Not Cooperating
-------------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Aatulya
Lifecare Private Limited (ALPL) to Issuer Not Cooperating
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 4.64 CARE D; ISSUER NOT COOPERATING
Facilities Rating moved to ISSUER NOT
COOPERATING Category
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from ALPL to monitor the ratings
vide e-mail communications dated August 20, 2020, September 25,
2020, October 9, 2020, November 23, 2020, December 8, 2020,
December 15, 2020, February 1, 2021, February 4, 2021 and numerous
phone calls. However, despite CARE's repeated requests, the company
has not provided the requisite information for monitoring the
ratings. In line with the extant SEBI guidelines, CARE has reviewed
the rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating. The ratings on ALPL's bank facilities will now be denoted
as CARE D; ISSUER NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
At the time of last rating on January 6, 2020 the following was the
rating weakness:
Key Rating Weakness
* Delays in debt servicing: There were delays in repayment of term
loan principal and interest obligations due to poor liquidity
position of the company. Also average OD limit utilization
remained full during the trailing 12 months period ended November
30, 2019.
Aatulya Lifecare Private Limited (ALPL) was incorporated in 2014
and started it operations from September 2016. ALPL has been
promoted by Dr Hirenkumar Patel, Dr Mehul Shah, Dr Manish Patel and
Dr Chirag Rathod. The company operates a hospital by the name
Aastha Multi Speciality Hospital, providing quality services and
patient care to the people in the vicinity of Vadodara (Gujarat).
The hospital has specialized departments in Gynaecology,
Orthopaedic, General surgery, Paediatric, Physiotherapy, Ears, Nose
and Throat (ENT), Critical Care and Pharmacy for its patients and
visitors. The hospital has capacity of 100 beds and 1 in-house
ambulance.
ACDC SAIDEEP: CRISIL Lowers Rating on INR5cr Cash Loan to B-
------------------------------------------------------------
CRISIL Ratings has downgraded its ratings on long term bank loan
facilities of ACDC Saideep Buildcon Private Limited (ACDC) to
'CRISIL B-/Stable' from 'CRISIL B+/Stable' while reaffirming its
'CRISIL A4' rating on the short term bank facility.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL B-/Stable (Downgraded
from 'CRISIL B+/Stable')
Inland Guarantees 35 CRISIL A4 (Reaffirmed)
The downgrade reflects weakening of the company's liquidity because
of stretch in receivables leading high bank limit utilisation and a
few instances of devolvement of letter of credit (LC); these
instances were regularised within 20 working days. Payments from
the key client, Maharashtra State Electricity Distribution Company
Ltd (MSEDCL), were received with a delay, which has impacted the
company's liquidity.
The ratings reflect ACDC's susceptibility to tender-based
operations, large working capital requirement and below-average
financial risk profile. These weaknesses are partially offset by
the extensive experience of the promoters
Key Rating Drivers & Detailed Description
Weaknesses
* Susceptibility to tender-based operations: Revenue and
profitability depend entirely on the company's ability to win
tenders. Also, entities in this segment face intense competition,
thus requiring them to bid aggressively to procure contracts,
restricting the operating margin to a moderate level.
* Large working capital requirement: Gross current assets were 242
days as on March 31, 2020. The working capital requirement is on
higher side around the year-end on account of large order
execution, with majority of the orders being executed in the last
quarter. Retention money and stretched payments from clients
further lead to working capital-intensive operations.
* Average financial risk profile: ACDC's capital structure is
average, as reflected in total outside liabilities to tangible
networth ratio of 2.8 times as on March 31, 2020. The capital
structure is likely to remain stable over the medium term because
of large working capital requirement.
Strength
* Extensive experience of the promotor: The 25-year-long experience
of the promotor, his strong understanding of the market dynamics
and healthy relationships with suppliers and the key customer,
MSEDCL, will continue to support the business. Also, ACDC has a
proven track record of successful project execution.
Liquidity: Poor
Bank limit was fully utilised over the nine months through December
2020. Cash accrual is expected at a modest INR2-4 crore per annum,
but it will sufficiently cover yearly debt obligation of 0.6-1
crore over the medium term. Current ratio stood at 1.65 times as on
March 31, 2020. There have been instances of LC devolvement in
recent months, which were regularised within 20 days.
Outlook: Stable
ACDC will continue to benefit from the promoter's extensive
experience and healthy relationships with clients.
Rating Sensitivity factors
Upward factors
* Efficient management of receivables leading to improvement in
overall liquidity, with bank limit utilisation of about 85%
* Strong operating performance and higher-than-expected cash
accrual
Downward factors
* Subdued operating performance
* Further stretch in receivables, indicated by continued gross
current assets of over 300 days and constrained liquidity
Incorporated in 2019, Pune-based ACDC is in the business of
executing turnkey electromechanical projects, such as HT/LT lines,
power transformers, substations and turnkey contracts for
electrification of rural areas. ACDC took over this business from
Saideep Electricals on July 1, 2019. Mr. Sandeep Pandurang Bhadange
is the promoter of the company.
ANDHRA CEMENTS: CARE Reaffirms D Rating on INR910.79cr LT Loan
--------------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of
Andhra Cements Ltd, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank
Facilities 910.79 CARE D Reaffirmed
Short Term Bank
Facilities 28.00 CARE D Reaffirmed
Detailed Rationale & Key Rating Drivers
The rating assigned to the bank facilities of Andhra Cements Ltd
continues to factor in delays in debt servicing by the company.
Rating Sensitivities:
Positive Factors:
* Timely track record of debt servicing by the company for
continuous 3 months
* Sustainable improvement in the operations of the company
Detailed description of the key rating drivers
Key Rating Weaknesses
* Delay in Debt servicing obligation: The liquidity position of the
company continues to remain weak on account of weak operational and
financial performance leading to delay in debt servicing.
Liquidity: Poor
The liquidity of the company is poor, leading to delays in debt
servicing.
ACL has cement manufacturing facilities at Dachepalli, Guntur
District (Durga Cement Works) with a split grinding unit at
Visakhapatnam, Andhra Pradesh (Visakha Cement Works). Jaypee Group,
through Jaypee Development Corporation Ltd (JDCL, a wholly-owned
subsidiary of Jaypee Infra Ventures) acquired controlling stake in
ACL in February 2012 from its earlier promoters, Duncan Goenka
Group. ACL, under its erstwhile management, began a process of
expanding its cement capacity from 1.42 mtpa (DCW – 0.8 mtpa and
VCW – 0.62 mtpa) to 3.0 mtpa in July 2007 but it witnessed
significant cost and time over runs. The Jaypee group,
post-acquisition of the company, has undertaken renovation and
augmentation of the existing capacity of 1.42 mtpa to 2.61 mtpa,
which was commissioned on December 1, 2014. The company has also
set up a captive power plant with 30 MW capacities, which was
commissioned in FY16.
ANSHU AUTOMOTIVES: CRISIL Keeps B+ Debt Rating in Not Cooperating
-----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Anshu
Automotives Private Limited (AAPL) continue to be 'CRISIL
B+/Stable/CRISIL A4 Issuer not cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Bank Guarantee 0.9 CRISIL A4 (Issuer Not
Cooperating)
Cash Credit 4.0 CRISIL B+/Stable (Issuer Not
Cooperating)
Long Term Loan 0.6 CRISIL B+/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with AAPL for
obtaining information through letters and emails dated July 25,
2020 and January 30, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of AAPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on AAPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
AAPL continues to be 'CRISIL B+/Stable/CRISIL A4 Issuer not
cooperating'.
AAPL was set up in 2007 by Mr. Ajay Naidu. It is an exclusive
authorised dealer for Force Motors Ltd in the Telangana region. The
company is based in Hyderabad.
APACE BUILDERS: Insolvency Resolution Process Case Summary
----------------------------------------------------------
Debtor: Apace Builders and Contractors Private Limited
KH No. 46/17, Green Avenue Mall Road
Vasant Kunj, New Delhi 110070
Insolvency Commencement Date: February 5, 2021
Court: National Company Law Tribunal, New Delhi Bench-IV
Estimated date of closure of
insolvency resolution process: August 4, 2021
Insolvency professional: Mr. Arun Chadha
Interim Resolution
Professional: Mr. Arun Chadha
727, Brahmpuri
Meerut
Uttar Pradesh 250002
E-mail: chadharun@yahoo.com
Last date for
submission of claims: February 23, 2021
ASTHA BEEJ: CRISIL Keeps B+ Debt Ratings in Not Cooperating
-----------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Astha Beej
Company Private Limited (ABC) continue to be 'CRISIL B+/Stable
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 2.5 CRISIL B+/Stable (Issuer Not
Cooperating)
Proposed Long Term 1.81 CRISIL B+/Stable (Issuer Not
Bank Loan Facility Cooperating)
Standby Line 0.35 CRISIL B+/Stable (Issuer Not
of Credit Cooperating)
Term Loan 1.34 CRISIL B+/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with ABC for
obtaining information through letters and emails dated July 25,
2020 and January 19, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of ABC, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on ABC
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
ABC continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
Established on July 26, 1999, (production began from 2005) by Mr. D
K Goel, ABC supplies certified, foundation, and research wheat and
paddy seeds. Operations are managed by Mr. D K Goel, Mr. S K Goel,
and Ms. Ruchin Goel.
CHIDANAND BASAPRABHU: Ind-Ra Affirms 'B+' LongTerm Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Chidanand
Basaprabhu Kore Sahakari Sakkare Karakhane Niyamit's (CBKSSKN;
earlier know as Shree Doodhaganga Krishna Sahakari Sakkare Karkhane
Niyamit) Long-Term Issuer Rating at 'IND B+'. The Outlook is
Negative.
The instrument-wise rating actions are:
-- INR2,600.00 bil. Fund-based working capital limit affirmed
with IND B+/Negative/IND A4 rating; and
-- INR469.36 mil. (reduced from INR700 mil.) Term loan due on
March 2023 affirmed with IND B+/Negative rating.
The Negative Outlook reflects Ind-Ra's expectation of further
deterioration in CBKSSKN's financial profile and a further stretch
in its liquidity over the near-to-medium term, majorly due to high
debt levels and low profitability.
KEY RATING DRIVERS
The ratings reflect CBKSSKN's modest and deteriorated EBITDA margin
of 4.27% in FY20 (FY19: 12.21%), due to high cane procurement cost.
Also, the reduced contribution from the cogeneration segment, given
the shorter crushing period of 84 days in FY20 (FY19: 109 days)
added to the margin decline. The return on capital employed was
0.08% in FY20 (FY19: 9.39%). However, the agency expects the
profitability to increase in FY21, subject to CBKSSKN receiving the
lagged government subsidy outstanding of INR440.00 million.
Nevertheless, the agency expects the operating profitability to
remain modest in FY21, due to the rising debt levels.
The ratings reflect deterioration in CBKSSKN's credit metrics in
FY20 due to modest profitability with high debt levels with
interest coverage (interest expenses/EBITDA) of 0.47x (FY19: 1.56x)
and net leverage (adjusted net debt/operating EBITDA) of 13.76x
(5.82x). Considering CBKSSKN's thin margins and a likely further
increase in the debt levels, the agency believes the credit metrics
are likely to remain weak over the near-to-medium term.
Furthermore, according to the management, CBKSSKN is planning to
incur capex of INR750.00 million-800.00 million in FY22, which will
further weaken its credit metrics.
Liquidity Indicator - Poor: The agency expects CBKSSKN's debt
service coverage ratio to be below 1.0x in FY21, considering the
high debt levels and lower profitability. Also, considering the
working capital intensive nature of CBKSSKN's operations, the
agency believes the liquidity will remain poor over the
near-to-medium term. Ind-Ra expects CBKSSKN's inventory to pile up
and impact the cash flow from operations in FY21, as the production
has picked up pace in this sugar season (SS) amid low demand. The
agency believes the liquidity will be supported by CBKSSKN
receiving the subsidy. In FY20, the working capital cycle improved
to 183 days (FY19: 325 days) due to the reduced inventory days of
103 (311). This led to positive cash flow from operations of
INR505.30 million in FY20 (FY19: negative INR827.89 million). The
principal debt obligation of CBKSSKN stood at INR266.94 million in
FY21. CBKSSKN availed the Reserve Bank of India-prescribed
moratorium for its working capital limits from two banks and on
term loan installments from one bank over March-August 2020. The
average maximum utilization of the fund-based limits was 72.56%
over the 12 months ended December 2020. The cash and cash
equivalents of CBKSSKN stood at INR280.88 million in FY20 (FY19:
INR39.71 million)
The ratings reflect CBKSSKN's medium scale of operations with a 7%
yoy rise in the revenue to INR4,754.83 million in FY20, due to the
increased contribution from sugar exports as well as from ethanol
sales. Despite the expectation of higher recovery rate of 11.50% in
SS2020-2021 as compared to 10.36% of SS2019-2021, the agency
expects the overall revenue to decline in FY21, considering the low
release of sugar quota in 2021 as against FY20. CBKSSKN achieved
revenue of only INR1,375.70 million till January 2021. The revenue
was significantly impacted in 1QFY21 due to a decline in the sugar
quota, backed by subdued demand. Although the revenue contraction
narrowed down from Q2FY21, the revenue remained low in 10MFY21.
The ratings are supported by CBKSSKN's fully integrated nature of
operations which provides cushion against volatility in the sugar
segment and support cash flows. It has medium-term power purchase
agreements with five distribution companies in Karnataka for the
export of surplus power and contracts with oil marketing companies
to supply ethanol at government-regulated rates, which were
increased in SS2020-2021.
The ratings continue to be supported by CBKSSKN's extensive
operational track record of over four decades in the sugar
industry, which has led to its established relationships with
suppliers and customers. Moreover, CBKSSKN has taken various
initiatives such as implementing lift and drip irrigation, the
distribution of seeds, seedlings, compost, fertilizer and so on,
free soil and water testing to improve yields, recovery, command
area and water availability.
RATING SENSITIVITIES
Negative: Further deterioration in the working capital cycle and
liquidity profile will be negative for the ratings.
Positive: A significant improvement in the working capital cycle
and liquidity profile, on a sustained basis, will be positive for
the ratings.
COMPANY PROFILE
CBKSSKN has an integrated sugar plant with a cane crushing,
distillery and power generation capacity of 10,000 tons of cane
crushed/day, 30,000 liter/day and 28.7MW, respectively, in Chikodi,
Karanataka. Registered as a co-operative society under the
Karanataka Co-operative Societies Act in 1969, it began crushing
operations from its 1,250 tones crushed per day (TCD) plant in
1974-75. Subsequently, the capacity of the plant was increased to
10,000TCD in phases. CBKSSKN had also set up distillery and
cogeneration units at the plant to make the optimum utilization of
by-products and reduce its dependence on the sugar segment, where
margins are volatile. The capacity of the co-generation unit was
increased in two phases to 28.7MW. The distillery unit, which was
set up with a capacity of 30klpd in 2002-03, was modernized and
upgraded to produce ethanol in 2011.
CICO TECHNOLOGIES: Ind-Ra Lowers LongTerm Issuer Rating to 'BB-'
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded CICO
Technologies Limited's (CTL) Long-Term Issuer Rating to 'IND BB-'
from 'IND BB'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR125 mil. Fund-based working capital limit* downgraded &
assigned with IND BB-/Stable rating.
* The final rating has been assigned following the receipt of
executed financing documents by Ind-Ra.
** Downgraded to 'Provisional 'IND BB-'/Stable before being
assigned 'IND BB-'/Stable
KEY RATING DRIVERS
The downgrade reflects CTL's continued small scale of operations
and weakening of business profile, as evidenced from the 15.38% yoy
decrease in its revenue to INR484.16 million in FY20. The fall in
revenue was primarily due to low demand for construction material.
Ind-Ra expects the company's revenue to decline further in FY21
owing to the COVID-19 led reduction in overall demand. The company
achieved revenue of INR285.77 million in 9MFY21.
The ratings also reflect CTL's deteriorated credit metrics. In
FY20, the interest coverage (operating EBITDA/gross interest
expense) fell to 1.55x in FY20 (FY19: 1.58x) and net leverage
(adjusted net debt/operating EBITDA) to 4.78x (3.90x) due to a
decrease in the absolute EBITDA to INR23.29 million (INR28.87
million).
The ratings also factor in the company's modest margin. CTL's
EBITDA margin contracted to 4.81% in FY20 (FY19: 5.05%) due to
increased cost of operations. The return on capital employed stood
at 6% in FY20 (FY19: 7%).
Liquidity Indicator – Adequate: CTL's average maximum utilization
of fund-based limits was 88.92% for the 12-months ended January
2021. Its cash flow from operations and free cash flow turned
negative to INR0.67 million in FY20 (FY19: positive INR16.24
million) and INR1.27 million (positive INR9.32 million),
respectively, due to increased working capital requirement and
decreased EBITDA. Further, the net cash cycle deteriorated to 172
days in FY20 (FY19: 125 days) on account of an increase in the
inventory days to 128 days (79 days). Additionally, the company had
unencumbered cash of INR1.74 million in FY20 (FY19: INR5.65
million). Furthermore, the entity does not have any capital market
exposure and relies on banks and financial institutions to meet its
funding requirements. CTL availed of the Reserve Bank of
India-prescribed moratorium over March-August 2020.
The ratings are also supported by the promoters' over four decades
of experience in construction chemicals. Furthermore, the company
enjoys strong clientele and geographical presence across the
country, and hence, faces very low customer concentration risk. The
company's top five customers contributed around 18.22% to its
revenue in FY20 (FY19: 16.01%).
RATING SENSITIVITIES
Positive: An increase in the scale of operations, along with an
improvement in the credit metrics, with the net leverage reducing
below 3.5x, on a sustained basis, will lead to a positive rating
action.
Negative: A decline in the scale of operations, leading to
deterioration in the credit metrics and/or any weakening of the
liquidity position, will be negative for the ratings.
COMPANY PROFILE
Established in 2000 as a closely-held public limited company, CTL
manufactures water proofing and construction compounds,
construction chemicals and additives. The company also provides
complete solutions for construction activities involved in building
airports, roads and bridges, metro rail, hydro power, thermal
power, etc.
DAWAR INTERNATIONAL: Insolvency Resolution Process Case Summary
---------------------------------------------------------------
Debtor: Dawar International Electronics Private Limited
10/5 Jacobpura
Opp. Vaidik Kanya School
Gurgaon HR 122001
IN
Insolvency Commencement Date: February 10, 2021
Court: National Company Law Tribunal, Faridabad Bench
Estimated date of closure of
insolvency resolution process: August 10, 2021
(180 days from commencement)
Insolvency professional: Ajay Kumar Siwach
Interim Resolution
Professional: Ajay Kumar Siwach
Flat no. 504
Rama Krishna Society
Sector-2
Faridabad 121004
E-mail: siwachajay@gmail.com
irpdawar2021@gmail.com
Last date for
submission of claims: February 26, 2021
EMCO ELECTRODYNE: CARE Lowers Rating on INR7cr LT Loan to B
-----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of EMCO
Electrodyne Private Limited, as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 7.00 CARE B; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category and
Revised from CARE B+; Stable
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated November 19, 2019, placed
the rating of EMCO Electrodyne Private Limited under the 'issuer
non-cooperating' category as EMCO had failed to provide information
for monitoring of the ratings. EMCO continues to be non-cooperative
despite repeated requests for submission of information through
e-mails, phone calls and a letter/email dated January 8, 2021,
January 5, 2021, January 4, 2021 and December 31, 2020. In line
with the extant SEBI guidelines, CARE has reviewed the rating on
the basis of the best available information which however, in
CARE's opinion is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
The revision in the rating takes into account the non-availability
of requisite information due to noncooperation by BCPL with CARE's
efforts to undertake a review of the outstanding ratings as CARE
views information availability risk as key factor in its assessment
of credit risk profile. The rating has been revised on account of
susceptibility of its margins to fluctuations in raw material
prices, foreign exchange fluctuations and presence in a highly
competitive industry. The rating however derives strength from
experienced promoters and long track record of operations.
Key Rating Weaknesses
* Susceptibility of its margins to fluctuations in raw material
prices: The main raw materials of the company are copper strips,
tapes, insulating materials, hardware, etc. Raw material cost has
always been a major contributor to total operating cost in the past
three years, thereby making profitability sensitive to raw material
prices mainly due to the reason that the major raw material is
commodity in nature and witness frequent price fluctuations. Thus,
any adverse change in the prices of the
raw material may affect the profitability margins of the company.
* Foreign exchange fluctuations: The company is dependent upon
exports and its export contribution to total sales stood at around
80% in FY18. The raw materials are completely procured from
domestic markets. With initial cash outlay for procurement in
domestic currency and major part of sales realization in foreign
currency, the company is exposed to the fluctuation in exchange
rates as EEP does not undertake any foreign exchange fluctuation
risk hedging.
* Presence in a highly competitive industry: The company operates
in highly fragmented and competitive market marked by the presence
of numerous organized and unorganized players in India. As such,
good customer relations and quality maintenance are significantly
important for business growth. Presence of large number of entities
in both organized and unorganized sector with low entry barriers
results in intense competition. The same in turn limits the pricing
flexibility.
Key Rating Strengths
* Experienced promoters and long track record of operations: The
company is managed by Mr. Piara Singh Matharoo, Mrs. Surinder
Matharoo, Mr. J.S. Matharoo collectively having an industry
experience of 24 years, 20 years and 18 years through their
association with EEP and other group concerns. The promoters have
adequate acumen about various aspects of business which is likely
to benefit EEP in the long run. The long track record has aided the
company in establishment of strong relationships with suppliers as
well as customers.
The entity was incorporated as a private limited company by the
name of Emco Danubius Alternators India Private Limited in April
1994. However, in June 1995, the company was renamed to Emco
Electrodyne Private Limited (EEP) and is currently being managed by
Mr. Piara Singh Matharoo, Mrs. Surinder Matharoo, Mr. J.S.
Matharoo. The company is engaged in the manufacturing of motor
coils, roebel stator bars, wound stator capsules, cast iron stator
frame, generator, three phase induction motor and repairing/
rewinding & overhauling of generators and motors at its
manufacturing facility located in Mohali, Punjab. Besides EEP, the
directors are also engaged in managing another group concerns
namely Emco Switch Gears Private Limited and Emco Dynamics India.
HARIOM INGOTS: Ind-Ra Affirms BB+ LT Issuer Rating, Outlook Stable
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Hariom Ingots &
Power Private Limited's (HIPPL) Long-Term Issuer Rating at 'IND
BB+'. The Outlook is Stable.
The instrument-wise rating action is:
-- INR250 mil. (reduced from INR270 mil.) Fund-based working
capital limit affirmed with IND BB+/Stable rating.
KEY RATING DRIVERS
The affirmation reflects HIPPL's continued medium scale of
operations. The company's revenue declined to INR2,471 million in
FY20 (FY19: INR3,154 million) due to a reduction in the average
sales price of billets, thermo mechanical treatment (TMT) bars and
epoxy coated-TMT bars, as well as low demand from industrial
players. The company reported revenue of INR1,698.4 million till
9MFY21. Ind-Ra expects a marginal increase in the revenue in FY21
based on an increase in demand of steel and a shift in demand from
Chinese to Indian manufacturers in 3QFY21 leading to rise in price
of steel in the market.
The ratings factor in the company's moderate credit metrics. The
interest coverage (operating EBITDA/gross interest expense)
improved to 2.9x in FY20 (FY19: 2.7x) due to a reduction in
external borrowings to INR310.9 million (INR403.3 million).
However, the company's net leverage (total adjusted net debt/
operating EBITDA)) remained unchanged at 3.5x as the agency
incorporated a corporate guarantee of INR50 million while
calculating the net leverage.
The ratings also factor in the company's modest EBITDA margin,
which expanded to 3.6% in FY20 (FY19: 3.5%) due to a reduction in
the raw material cost. The return on capital employed decreased to
8.8% in FY20 (FY19: 11.1%). In FY21, Ind-Ra expects the company's
EBITDA margin to remain in the range of 3%-4%.
Liquidity Indicator - Adequate: HIPPL's average utilization of the
fund-based limits was around 83% of the sanctioned limits over the
12-months ended November 2020. In FY20, the cash flow from
operations improved to INR63.5 million (FY19: INR7.9 million)
mainly on account of a reduction in working capital requirements.
Ind-Ra expects the company's cash flow from operations to decrease
in FY21 due to an increase in working capital requirement of the
company. The cash and cash equivalents stood at INR2.1 million in
FY20. The net working capital cycle reduced mainly on account of
a decrease in debtors to seven days in FY20 (FY19:12 days). Ind-Ra
expects the company's working capital cycle to stretch in FY21
mainly on account of an expected increase in working capital
requirements due to an exceptional increase in its inventories
owing to the rising steel prices. The company availed of the
Reserve Bank of India-prescribed debt moratorium.
The ratings continue to benefit from the promoters' experience of
over four decades in manufacturing of TMT bars and mild steel
ingots.
RATING SENSITIVITIES
Negative: A further decline in the revenue leading to deterioration
in the credit metrics and liquidity position, leading to the
interest coverage reducing below 2x on a sustained basis, would
lead to a negative rating action.
Positive: An improvement in the operating profitability along with
an improvement in the credit metrics and liquidity position, on a
sustained basis, could lead to a positive rating action.
COMPANY PROFILE
HIPPL was incorporated in 2004 in Bhilai (Chhattisgarh). The
company manufactures TMT bars and mild steel ingots. The company
has three sections: steel melting shop, re-rolling plant and epoxy
coating division. The unit has production capacity of 60,000 metric
tons per annum, which manufactures TMT bars, ranging from 8mm to
32mm width, under the name of Hariom TMT. In 2016, the company
started the production of epoxy coated bars that are more durable
than normal TMT bars and are sold under the brand name of Hariom
Epoxy Shield. The company also trades steel products.
HEMKUNT RICE: CRISIL Keeps B+ Debt Ratings in Not Cooperating
-------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of Hemkunt Rice
Mills Private Limited (HRMPL) continue to be 'CRISIL B+/Stable
Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL B+/Stable (Issuer Not
Cooperating)
Proposed Long Term
Bank Loan Facility 3.75 CRISIL B+/Stable (Issuer Not
Cooperating)
Term Loan 1.25 CRISIL B+/Stable (Issuer Not
Cooperating)
CRISIL Ratings has been consistently following up with HRMPL for
obtaining information through letters and emails dated July 25,
2020 and January 19, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of HRMPL, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on HRMPL
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
HRMPL continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
Incorporated in May 2005 in Hazaribagh and promoted by Mr. Manjeet
Singh Kalra and Mr. Swaranpal Singh Kalra, HRMPL mills and
processes parboiled rice. The company markets its product under 10
registered brands.
HVR PROJECTS: CARE Keeps B Debt Rating in Not Cooperating
---------------------------------------------------------
CARE Ratings said the rating for the bank facilities of HVR
Projects Private Limited (HVR) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 12.44 CARE B; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category
Short Term Bank 1.00 CARE A4; ISSUER NOT COOPERATING
Facilities Rating continues to remain
Under ISSUER NOT COOPERATING
category
Detailed Rationale, Key Rating Drivers and Detailed description of
the key rating drivers
CARE had, vide its press release dated November 28, 2019, placed
the rating of HVR under the 'issuer non-cooperating' category as
HVR had failed to provide information for monitoring of the rating
as agreed to in its Rating Agreement. HVR continues to be
non-cooperative despite repeated requests for submission of
information through email dated June 25, 2020, July 31, 2020,
October 13, 2020, January 13, 2021, January 15, 2021, January 22,
2021 and numerous phone calls. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
At the time of last rating on November 28, 2019 the following were
the rating strengths and weaknesses:
Key Rating Weaknesses
* Short track record of the company with low capitalization: HVR
commenced operations in April 2015 with FY16 being first year of
operations. HVR's scale of operations is small with total operating
income of INR6.02 crore in FY16 and INR 21.46 crore in FY17.
Further, net worth of the company remained low at INR 5.61 crore as
on March 31, 2017. Small scale of its operations deprives it from
scale benefits and limits its competitive ability in a highly
competitive scenario.
* Leveraged capital structure with weak debt coverage indicators:
Owing to low networth base, total debt of the company remained on
higher side resulting in over 2x overall gearing. The same resulted
in weak debt coverage indicators despite moderate profitability.
* Presence in fragmented industry and susceptibility to fluctuation
in raw material prices: The company operates in fabrication
industry characterized by a number of players and low entry
barriers. Thus the company faces high competition from other
players in the market. The price of raw materials mainly stainless
steel required by HVR is volatile and the profit margins of the
company are exposed to any sudden spurt in the raw material
prices.
Key Rating Strengths
* Experienced promoters and qualified management team: Mr. Jitendra
Jain (Director) is a commerce graduate and has an experience of
more than two decades in similar line of operations and is
responsible for the overall management of the company. Mr. Anil
Kumar Nevatia, Chartered Accountant has an experience of around 25
years in diverse sectors. Ms Ranjana Jain has an experience of
around a decade in the manufacturing domain and is a partner in NVJ
Electronics and Services. Mr. Abhijeet Nandwana has an experience
of 5 years in the manufacturing. Further, the promoters are well
supported by a team of well qualified members with enriched
experience in similar line of operations.
* Reputed and geographically diversified client profile: Customer
profile of the company is geographically diversified and spread
across India primarily in the states of Maharashtra, Assam,
Rajasthan and Gujarat etc.
Incorporated in April 2015, HVR is engaged in fabrication of heavy
components and design and fabrication of Pre-designed Building
(PEB). The company operates out of a facility located in Nagpur
spread over 6000 sq ft having a total installed capacity of 25,000
tonnes per annum.
I FOUR: CRISIL Keeps B+ Debt Ratings in Not Cooperating Category
----------------------------------------------------------------
CRISIL Ratings said the ratings on bank facilities of I Four
Exporters (IFE) continue to be 'CRISIL B+/Stable Issuer Not
Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 2.5 CRISIL B+/Stable (Issuer Not
Cooperating)
Proposed Cash 6.0 CRISIL B+/Stable (Issuer Not
Credit Limit Cooperating)
Proposed Long Term 1.5 CRISIL B+/Stable (Issuer Not
Bank Loan Facility Cooperating)
CRISIL Ratings has been consistently following up with IFE for
obtaining information through letters and emails dated July 25,
2020 and January 19, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of IFE, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on IFE
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
IFE continues to be 'CRISIL B+/Stable Issuer Not Cooperating'.
Set up in 2016, Palakkad, IFE is involved in the gold jewellery
wholesale business. Mr. Prasad TP, Mr. Suresh Palakot, and Mr.
Nitin, are the promoters. The firm commenced operations in May
2015.
JAIDEEP SHIKSHA: CARE Lowers Rating on INR7.25cr LT Loan to B
-------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Jaideep Shiksha Utthan Samiti (JSU), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 7.25 CARE B; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category and
Revised from CARE B+; Stable
Short Term Bank 1.00 CARE A4; ISSUER NOT COOPERATING
Facilities Rating continues to remain
Under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated November 19, 2019, placed
the rating of JSU under the 'issuer non-cooperating' category as
JSUS had failed to provide information for monitoring of the
ratings. JSUS continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and a letter/email dated January 8, 2021, January 5, 2021, January
4, 2021 and December 31, 2020. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
The revision in the rating takes into account the non-availability
of requisite information due to noncooperation by BCPL with CARE's
efforts to undertake a review of the outstanding ratings as CARE
views information availability risk as key factor in its assessment
of credit risk profile. The rating has been revised on account of
increasing competition and limited reach and high regulation in
educational sector in India. The rating however derives strength
from experienced members with competent teaching staff and well
established infrastructure and buoyant prospects of Pre-school &
K-12 segment in India and higher/professional education of
sectors.
Key Rating Weaknesses
* Increasing competition and limited reach: JSU is operating a
school and 2 colleges located in Karnal, Haryana. This limits the
enrollment in the school and colleges to the nearby cities and
rural areas. Further, due to increasing focus on education in
India, a number of schools and colleges have opened up in close
proximity and several established private and government schools
and colleges are already running in and around the city. This
exposes the revenue of JSU to competition from other schools and
colleges.
* High regulation in educational sector in India: Educational
sector in India is placed in the concurrent list of the
constitution and thus comes under the purview of both Central and
State Government. The sector is regulated by Ministry of Human
Resource at the national level, by the education ministries in each
state, as well as by Central bodies like University Grant
Commission (UGC) and 14 other professional councils. The operating
and financial flexibility of the education sector is limited, as
regulations governs almost all aspects of operations, including fee
structure, number of seats, changes in curriculum and
infrastructure requirements. Though, the state and central
government have provided thrust to demand for colleges by
introducing policy changes like abolition of entrance exams for
admission in professional courses. However, the education industry
remains highly regulated industry with constant intervention from
the central and state government and other regulatory bodies.
Key Rating Strengths
* Experienced members with competent teaching staff and well
established infrastructure: The society is managed by Mr. Jagdish
Jaglan, Mrs. Sudesh Jaglan and Mr. Ankit as President, Secretary
and Treasurer, respectively. Mr. Jagdish Jaglan and Mrs. Sudesh
Jaglan have a total industry experience of more than two decades
each, gained through their association with JSU only. Whereas, Mr.
Ankit has total industry experience of 1 year only. Further, JSU
has employed experienced and qualified teaching staff to support
the academic requirements of the school and colleges. Apart from
the key faculty members, JSU has employed competent and well
qualified academic staff to run the day-to-day operations of the
society. The society has employed 43 teachers which are aided by a
supporting staff of 30. Additionally, the society provides several
infrastructure facilities at its school and colleges which include
science (physics, chemistry, biology) and computer laboratories,
canteen, multi-media projectors, well stocked libraries,
auditorium, gymnastic hall, music room, art room, badminton court,
basketball court, volleyball court etc.
* Buoyant prospects of Pre-school & K-12 segment in India and
higher/professional education of sectors: The Government's thrust
on improving the country's literacy rate through higher enrolments
as well as ensuring lower drop-out rates in the K- 12 education
space is expected to drive the growth in terms of volume.
Furthermore, JSU is engaged in providing higher education which
comprises of graduation courses. Demand for these courses is
growing at a phenomenal pace in India. The increase in government
spending on education over the years has provided an impetus to the
growth of higher education in India. In an effort to expand the
reach to tier- III cities and rural areas of the country and
thereby spur enrolments, the Central government's revenue
expenditure allocation towards primary and higher education has
grown in the past few years.
Jaideep Shiksha Utthan Samiti (JSU) got registered under the
Society Registration Act- 1860 in 1996 and is currently being
managed by Mr. Jagdish Jaglan, Mrs. Sudesh Jaglan, Mr. Ankit Singh,
Mr. Ramphal Singh, Mr. Rajinder Singh, Mr. Yudhvir Singh and Mrs.
Bimla as the members with an objective to provide education
service. The society is running one school under the name of
"Greenwood Public School" and two colleges under the name of
"Greenwood College of Education" and "Greenwood Degree College" in
Karnal, Haryana. Greenwood Public School is offering classes from
Nursery to 8th standard and is Haryana Board of School Education
(HBSE) affiliated and whereas the colleges are offering courses
like B.A., B.Com, B.Sc, B.Ed, JBT/ D.Ed, Post Graduate diploma in
Yoga, certificate course in Yoga which are duly approved by NCTE
(National Council for Teacher Education) and are also affiliated to
Kurukshetra University, Kurukshetra (KUK).
JAMSHEDPUR MINERALS: CRISIL Cuts Rating on INR11cr Loans to B
-------------------------------------------------------------
CRISIL Ratings has revised the ratings on bank facilities of
Jamshedpur Minerals & Chemicals (JMC) to 'CRISIL B/Stable Issuer
Not Cooperating' from 'CRISIL BB-/Stable Issuer Not Cooperating'.
Amount
Facilities (INR Crore) Ratings
---------- ----------- -------
Cash Credit 5 CRISIL B/Stable (ISSUER NOT
COOPERATING; Revised from
'CRISIL BB-/Stable ISSUER NOT
COOPERATING')
Foreign Letter 5 CRISIL B/Stable (ISSUER NOT
of Credit COOPERATING; Revised from
'CRISIL BB-/Stable ISSUER NOT
COOPERATING')
Term Loan 1 CRISIL B/Stable (ISSUER NOT
COOPERATING; Revised from
'CRISIL BB-/Stable ISSUER NOT
COOPERATING')
CRISIL Ratings has been consistently following up with JMC for
obtaining information through letters and emails dated July 25,
2020 and January 19, 2021 among others, apart from telephonic
communication. However, the issuer has remained non cooperative.
'The investors, lenders and all other market participants should
exercise due caution with reference to the rating assigned/reviewed
with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived
at without any management interaction and is based on best
available or limited or dated information on the company. Such non
co-operation by a rated entity may be a result of deterioration in
its credit risk profile. These ratings with 'ISSUER NOT
COOPERATING' suffix lack a forward looking component.'
Detailed Rationale
Despite repeated attempts to engage with the management, CRISIL
Ratings failed to receive any information on either the financial
performance or strategic intent of JMC, which restricts CRISIL
Ratings' ability to take a forward looking view on the entity's
credit quality. CRISIL Ratings believes that rating action on JMC
is consistent with 'Assessing Information Adequacy Risk'. Based on
the last available information, the ratings on bank facilities of
JMC Revised to 'CRISIL B/Stable Issuer Not Cooperating' from
'CRISIL BB-/Stable Issuer Not Cooperating'.
Set up in 2014 in Jamshedpur as a partnership firm by Mr. Manoj
Kumar Gutgutia, Mr. A K Gutgutia, Mr. Shiv Kumar Agarwal, and Mr.
Ramjanam Singh, JMC manufactures ferro alloys such as low carbon
ferro manganese, ferro molybdenum, and ferro titanium. Commercial
operations began in February 2015.
JML MARKETINGS: CARE Lowers Rating on INR34.90cr LT Loan to D
-------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
J.M.L. Marketings (P) Ltd. (JML), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 34.90 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
Under ISSUER NOT COOPERATING
category and Revised from
CARE BB
Short Term Bank 5.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
Under ISSUER NOT COOPERATING
category and Revised from
CARE A4
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated Feb 24, 2017, placed the
rating(s) of JML under the 'Issuer non-cooperating' category as JML
had failed to provide information for monitoring of the rating. JML
continues to be noncooperative despite repeated requests for
submission of information through e-mails, phone calls and a email
dated Feb. 1, 2021, Feb. 2, 2021, Feb. 3, 2021 and Feb. 5, 2021. In
line with the extant SEBI guidelines, CARE has reviewed the rating
on the basis of the best available information which however, in
CARE's opinion is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings have been revised on account of recent feedback
received from lender highlighting that the account of JML has
been classified as Non-Performing Asset (NPA).
Detailed description of the key rating drivers
Key Rating Weaknesses
* On-going delays in debt servicing: As per feedback received from
the lender there are on-going delays in debt servicing and account
is classified as NPA.
Incorporated in 2004 as a partnership entity, JML is promoted by
Mr. Anil Arora and Mr. Kimti Lal Arora. The entity was
reconstituted as a private limited company in the year 2007. JML is
the sole distributor for 'Fortune' edible oil brand belonging to
the Adani Wilmar Limited (rated CARE A; Positive/CARE A1); across
nine zones (i.e. Allahabad, Varanasi, Ghaziabad, Jabalpur,
Amritsar, Mumbai, Bhiwandi, Navi Mumbai and Thane). This apart, the
company also sells edible oil (procured from the market) under its
own brand name (7 brands) through its blending and packaging unit
at Naini, Allahabad.
KANHAIYA LAL: CARE Lowers Rating on INR4.0cr LT Loan to B+
----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Kanhaiya Lal Agrawal (KLA), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 4.00 CARE B+; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category and
Revised from CARE BB-; Stable
Short Term Bank 10.00 CARE A4; ISSUER NOT COOPERATING
Facilities Rating continues to remain
Under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated December 2, 2019, placed the
rating(s) of KLA under the 'issuer non-cooperating' category as KLA
had failed to provide information for monitoring of the rating as
agreed to in its Rating Agreement. KLA continues to be
non-cooperative despite repeated requests for submission of
information through emails, phone calls and a letter/email dated
January 12, 2021, January 14, 2021, 2021, February 04, 20201. In
line with the extant SEBI guidelines, CARE has reviewed the rating
on the basis of the best available information which however, in
CARE's opinion is not sufficient to arrive at a fair rating. The
rating on KLA's bank facilities will now be denoted as CARE B+;
Stable; ISSUER NOT COOPERATING/CARE A4; ISSUER NOT COOPERATING.
Further, banker could not be contacted.
Users of these rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
At the time of last rating in December 2, 2019 the following were
the rating strengths and weaknesses:
Key Rating Strengths
KLA, being a proprietorship entity, is exposed to inherent risk of
proprietor's capital being withdrawn at time of personal
contingency. Furthermore, limited ability to raise capital and poor
succession planning may result in dissolution of the entity.
* Small scale of operations: KLA is a relatively small player in
the construction business with total operating income and PAT of
INR43.65 crore and INR3.02 crore respectively, in FY18
(Provisional). However, the TOI have increased by 89.74% in FY18
over FY17. The small size restricts the financial flexibility of
the entity in times of stress. Further, the total capital employed
remained relatively low at INR11.58 crore as on Mar.31, 2018. The
firm has achieved total operating income of INR20.00 crore in
5MFY18.
* Susceptibility of operating margin to volatility in input
material prices and labour charges: The basic input materials for
execution of construction projects and works contracts are steel,
stone chips, bitumen and cement etc. The prices of which are highly
volatile. However, currently public works department contracts have
price escalation clause which mitigate price volatility risk to
some extent. Furthermore, the operating margin of the entity is
exposed to sudden change in the input material prices along with
increase in labour prices, being in labour intensive industry,
which is offset by the price escalation clause to some extent.
* Exposure to tender driven process risk and intense competition
within the industry owing to low entry barrier: The civil
construction space is highly competitive with many players
operating in the sector affecting the profitability of the
participants. Furthermore, the firm is largely dependent on
government authorities for orders and mainly procures its orders
through tender bidding and in a highly competitive scenario; risk
of non-receiving of contract in tender bidding is also high.
Key Rating Strengths
* Experienced proprietor with long track record of operation: KLA
has been in operation since 1990, accordingly has a long track
record of operation. Further, the entity is managed by Mr.
KanhaiyaLal Agrawal having over three decades of experience in
construction business.
* Reputed clientele resulting in lower counterparty risk: KLA
focuses mainly on construction of public works department contracts
and government contracts, like road projects, building, small
bridges etc. and other government departments which resulted in
minimal default risk.
* Satisfactory financial risk profile marked by moderate
profitability with moderate capital structure and satisfactory debt
protection metrics: The entity has achieved a PBILDT margin and PAT
margin of 11.91% and 6.92% in FY18 respectively. However, the
capital structure remained comfortable marked by overall gearing
ratio at 0.91x as on March 31, 2018. Moreover, the debt protection
metrics is comfortable marked by satisfactory interest coverage
ratio of 4.02x as on March 31, 2018.
* Satisfactory order book position: The firm has an order book
(total value of work) of INR54.94 crore as on August 31, 2018 [i.e.
about 1.26x of FY18 revenue] to be executed by June 2019.
M/s Kanhaiya Lal Agrawal (KLA) was established in 1990 as a
proprietorship entity by Mr. Kanhaiya Lal Agrawal of Raipur,
Chhattisgarh. KLA participates in the tender process of various
public works department contracts, government contracts and related
ancillary works. M/s KanhaiyaLal Agrawal has reputed client base
primarily dealing with public works department and government
departments. Mr. Kanhaiya Lal Agrawal along with his son Mr. Naveen
Agrawal, looks after the day to day activities of the business with
adequate support from co-director and a team of experienced
professionals.
KUNAL FOUNDER: CARE Lowers Rating on INR4.40cr LT Loan to B-
------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Kunal Founder and engineers Private Limited (KFE), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 4.40 CARE B-; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category and
Revised from CARE B; Stable
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated November 19, 2019, placed
the rating of KFE under the 'issuer non-cooperating' category as
KFE had failed to provide information for monitoring of the rating.
KFE continues to be non-cooperative despite repeated requests for
submission of information through e-mails, phone calls and a
letter/email dated January 4, 2021, January 5, 2021, January 8,
2021, and December 31, 2020. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
The long term rating has been revised on account of small scale of
operations, low profitability margins and weak capital structure,
susceptibility of margins to fluctuations in raw material prices
and presence of company in the highly competitive auto component
industry. The rating, however, draws strengths from experienced
directors along with long track record of operations.
Key rating Weaknesses
* Small scale of operations: The total operating income (TOI) of
KFE stood small at INR13.88 crore in FY19 (refers to the period
April 1 to March 31) as compared to INR12.63 crore in FY18.
* Low profitability margins: The profitability margins of the
company stood low marked by PBILDT margin and PAT margin at 5.44%
and 0.03% in FY19 respectively (PY: (7.10% and 0.02%
respectively).
* Leveraged capital structure: The overall gearing ratio stood
leveraged at 3.63x as on March 31, 2019 (PY: 2.47x).
* Susceptibility of margins to fluctuations in raw material prices:
The main raw materials used by the company are iron & steel scrap,
pig iron, chemicals, silicone, chrome etc. Raw material cost is a
major contributor to total operating cost, thereby making
profitability sensitive to raw material prices mainly due to the
reason that the major raw material is commodity in nature and
witnesses frequent price fluctuations. Moreover, the prices of
steel are driven by international prices, apart from domestic
demand supply factors and therefore remain volatile. Thus any
adverse change in the prices of the raw material may affect the
profitability margins of the company.
* Presence in the highly competitive auto component industry: KFE
operates in a highly competitive industry wherein there is presence
of a large number of players in the unorganized and organized
sectors. Furthermore, the auto component industry is largely
unorganized in structure, consisting of around 45%- 50% of the
overall industry size. The unorganized segment mainly caters to the
replacement market and to tier II and tier III suppliers. The
organized segment majorly caters to the OEM segment. The high
competition restricts the pricing flexibility and bargaining power
of the company.
Key Rating Strengths
* Experienced directors along with long track record of operations:
KFE is being currently managed by Mr. Subhash Mahajan and Mr.
Yuvraj Mahajan has industry experience of 30 years and 10 years
respectively gained through their association with KFE and other
group concern, namely, Bharat Foundry (engaged in similar business
operations). Both the directors have adequate acumen about various
aspects of business which is likely to benefit KFE in the long run.
Additionally, the directors are supported by a team of experienced
and qualified professionals having varied experience in the
technical, financial and marketing aspects of business. The long
track record has aided the company in having established
relationship with customers and suppliers.
The entity was established as a partnership firm in April, 1978
under the name of Kunal Founder and Engineers. In May, 1996 the
name and constitution of the firm changed to its present one i.e.
Kunal Founder and Engineers Private Limited (KFE). The company is
currently being managed and promoted by Mr. Subhash Mahajan and Mr.
Yuvraj Mahajan. The company is engaged in the manufacturing of
automotive components like flywheel, brake housing, wet bar
steering brackets, excel brackets etc. with total installed
capacity of 1,900 metric tonnes of automotive components per annum
at its manufacturing facility in Sahibzada Ajit Singh Nagar,
Punjab. Besides KFE, one of the directors is also engaged in
another group concern namely, Bharat Foundry, which is a
proprietorship firm established in 2004 and is engaged in similar
line of business.
LAKSHMI VILAS: DBS Faces Lawsuits in Post-Takeover of Bank
----------------------------------------------------------
Chanyaporn Chanjaroen at Bloomberg News reports that DBS Group
Holdings Ltd., Southeast Asia's largest lender, said it's facing
lawsuits in India related to its recent takeover of a struggling
local bank.
Holders of Lakshmi Vilas Bank Ltd.'s equity shares and Tier-II
bonds that were written off before the effective date of
amalgamation took legal actions against DBS's local unit in various
high courts in India, the Singapore-based lender said in a reply to
questions from Bloomberg News. The acquisition was completed on
Nov. 27, DBS said earlier this month.
"DBS has no incremental unprovided risks on these lawsuits," it
said. "Other legal liabilities in the normal course of business
have also been suitably provided for."
According to Bloomberg, DBS's Lakshmi Vilas acquisition was the
first time the Reserve Bank of India turned to a foreign lender to
bail out a local bank as India's financial industry suffered a
series of shocks since the outbreak of a shadow banking crisis in
2018.
While the suits named DBS's India unit as a respondent, the primary
respondents would be the Indian government and the RBI, who drafted
and approved the amalgamation program, according to DBS, Bloomberg
relays.
Bloomberg relates that DBS's Chief Executive Officer Piyush Gupta
expected Lakshmi Vilas to become profitable in 12 to 24 months as
the Singapore bank sets aside amalgamation expenses and allowances
for soured assets, he said at a Feb. 10 earnings media briefing.
About Lakshmi Vilas
Lakshmi Vilas Bank is a south India focused, small private sector
bank in India.
In 2019, the bank was placed under the prompt corrective action
framework of the Reserve Bank of India because of its financial
position, according to BloombergQuint. Under the framework, the
bank has to follow restrictions on lending, expansion and any other
capital consuming activities.
MAHAMAYA FOODS: CARE Lowers Rating on INR6.0cr LT Loan to B
-----------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Mahamaya Foods (MF), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 6.00 CARE B; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category and
Revised from CARE B+; Stable
Long Term/Short 2.00 CARE B; Stable/CARE A4;
Term Bank ISSUER NOT COOPERATING;
Facilities Rating continues to remain
Under ISSUER NOT COOPERATING
Category and Revised from
CARE B+; Stable/CARE A4
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from MF to monitor the ratings
vide e-mail communications/letters dated January 19, 2021, January
21, 2021, January 22, 2021 and numerous phone calls. However,
despite our repeated requests, the Entity has not provided the
requisite information for monitoring the ratings. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the publicly available information which, however, in CARE's
opinion is not sufficient to arrive at a fair rating. The rating on
MF's bank facilities will now be denoted as CARE B; Stable; ISSUER
NOT COOPERATING/ CARE A4; Issuer Not cooperating . Further, the
banker could not be contacted.
Users of these ratings (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
At the time of last rating in November 29, 2019 the following were
the ratings strengths and weaknesses.
Key Rating Weaknesses
* Constitution as a partnership entity: Mahamaya Foods, being a
partnership entity, is exposed to inherent risk of the partner's
capital being withdrawn at time of personal contingency and entity
being dissolved upon the death/insolvency of the partner. Furth
ermore, partnership entities have restricted access to external
borrowing as credit worthiness of partner would be the key factors
affecting credit decision for the lenders.
* Short track record with small scale of operation and low profit
margins: Mahamaya Foods is a relatively small player in the rice
milling and processing business having total operating income and
PAT of INR18.60 crore (Rs.16.65 crore in FY17) and INR0.23 crore
(Rs.0.19 crore in FY17), respectively, in FY18 (Provisional). The
PBILDT and PAT margins of the entity were also low at 6.81% (FY17:
7.21%) and 1.24% (FY17: 1.14%), respectively, in FY18
(Provisional). The net worth of the entity was also low at around
INR2.71 crore as on March 31, 2018. Small scale of operations with
low net worth base limits the credit risk profile of the entity in
an adverse scenario. This apart, the entity has achieved sale of
INR8.00 crore in H1FY19. Furthermore, the firm have started its
operation since April 2015 hence having a short track record of
operation.
* Fragmented and competitive nature of industry: The commodity
nature of the product makes the industry highly fragmented, with
numerous players operating in the unorganized sector with very less
product differentiation. There are several small scale operators
which are not into end-toend processing of rice from paddy, instead
they merely complete a small fraction of processing and dispose-off
semiprocessed rice to other big rice millers for further
processing.
* Regulated nature of industry: The Government of India (GOI)
decides a minimum support price (MSP - to be paid to paddy growers)
for paddy every year limiting the bargaining power of rice millers
over the farmers. The MSP of paddy was increased during the crop
year 2018-19 to INR1750/quintal from INR1550/quintal in crop year
2017-18. Given the market determined prices for finished product
vis-à-vis fixed acquisition cost for paddy, the profitability
margins are highly volatile. Such a situation does not augur well
for the entity, especially in times of high paddy cultivation.
* High working capital intensity and exposure to vagaries of
nature: Rice milling is a working capital intensive business as the
rice millers have to stock rice by the end of each season till the
next season as the price and quality of paddy is better during the
harvesting season. Further, the millers are required to extend a
credit period of around one and half month's days to its customers.
Also, paddy cultivation is highly dependent on monsoons, thus
exposing the fate of the entities' operation to vagaries of nature.
Accordingly, the working capital intensity remains high leading to
higher stress on the financial risk profile of the rice milling
units. Furthermore, the average utilization of working capital
remained at about 80% during the last 12 months ended September,
2018.
* Leveraged capital structure with moderate debt coverage
indicators: Capital structure of the entity remained leveraged as
marked by long term debt equity ratio of 1.20x (2.29x as on March
2017) and overall gearing ratio of 2.71x (3.96x as on March 31,
2017) as on March 31, 2018 (Provisional). The debt coverage
indicators remained moderate marked by total debt to GCA ratio of
7.90x in FY18 (Provisional). However, interest coverage ratio
remained satisfactory at 2.12x in FY18 (Provisional).
Key Rating Strengths
* Experienced partners: Mahamaya Foods has been engaged in rice
milling and processing business since April 2015. Mr. Roshan
Chandrakar (Partner) along with Mrs. Devbati Chandrakar (Partner)
who has around 10 years and 12 years of experiences, respectively,
in similar line of business, are looking after the day to day
operation of the entity.
* Close proximity to raw material sources and stable demand outlook
of rice: Mahamaya Foods' plant is located in Dhamtari District,
Chhattisgarh which is in close proximity to the paddy growing areas
of the state. The entire raw material requirement is met locally
from the farmers helping the entity to save simultaneously on
transportation cost and paddy procurement cost. Further, rice being
a staple food grain with India's position as one of the largest
producer and consumer, demand prospects for the industry is
expected to remain good in near to medium term. Rice, being one of
the primary food articles in India, demand is high throughout the
country and with the change in life style and health consciousness;
by products of the same like rice bran oil etc. are in huge
demand.
Maa Chandi Rice Industries was established in April 2015 with an
objective to enter into the rice milling and processing business.
The manufacturing unit of the entity is located at Bhothli Road,
Kurud, Dist: Dhamtari, Chhattisgarh with an installed capacity of
19200 metric tons per annum (MTPA). The entity is procuring raw
paddy from the local farmers and small paddy agents. The entity is
also engaged in custom milling activities of around 50% of its
capacity. Mr. Roshan Chandrakar (Partner) along with Mrs. Devbati
Chandrakar (Partner) who has around 10 years and 3 years of
experiences, respectively, in similar line of business, are looking
after the day to day operation of the entity.
MAKTEL CONTROL: Insolvency Resolution Process Case Summary
----------------------------------------------------------
Debtor: Maktel Control & Systems Pvt Ltd
Plot No. 1421, GIDC Estate
Waghodia, Dist. Vadodara
Gujarat 390760
IN
Insolvency Commencement Date: February 2, 2021
Court: National Company Law Tribunal, Ahmedabad Bench
Estimated date of closure of
insolvency resolution process: July 31, 2021
(180 days from commencement)
Insolvency professional: Dharit Kishorbhai Shah
Interim Resolution
Professional: Dharit Kishorbhai Shah
C/o Bipin & Co
Chartered Accountants
302, Centre Point
R.C. Dutt Road
Alkapuri, Vadodara
Gujarat 390007
E-mail: bipin.smdt@gmail.com
cirp.maktelcontrol@gmail.com
Last date for
submission of claims: February 16, 2021
MANGALDEEP COLD: CARE Lowers Rating on INR7.87cr LT Loan to B-
--------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Mangaldeep Cold Storage Private Limited (MCSPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 7.87 CARE B-; Stable; ISSUER NOT
Facilities COOPERATING; Revised from
CARE B; Stable and moved to
ISSUER NOT COOPERATING
Category
Short Term Bank 0.13 CARE A4; ISSUER NOT
Facilities COOPERATING; Rating moved
to ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from MCSPL to monitor the ratings
vide e-mail communications/letters dated October 16, 2020, Nov. 5,
2020, Jan. 8,2020 ,February 2, 2021 and numerous phone calls.
However, despite CARE's repeated requests, the company has not
provided the requisite information for monitoring the ratings. In
line with the extant SEBI guidelines, CARE has reviewed the rating
on the basis of the best available information which however, in
CARE's opinion is not sufficient to arrive at a fair rating. The
rating on MCSPL's bank facilities will now be denoted as CARE B-;
Stable; ISSUER NOT COOPERATING /CARE A4; ISSUER NOT COOPERATING.
Further, banker could not be contacted.
Detailed Rationale & Key Rating Drivers
Key Rating Weaknesses
* Small scale of operation with low profitability margin: The
company is a relatively small player in cold storage business total
operating income of INR 2.12 crore in FY20. The profitability
margins remained low marked by PBILDT and PAT margins of 26.63 %
(FY19:26.77%) and negative 0.56 % (FY19: 0.11%), respectively, in
FY20.
* Regulated nature of business: In West Bengal, the basic rental
rate for cold storage operations is regulated by the state
government through West Bengal State Marketing Board. The rent of
these cold storages is decided by taking into account political
considerations, not economic viability. Due to severe government
intervention, the cold storage facility providers cannot enhance
rental charge commensurate with increased power tariff and labour
charge.
* Seasonality of business with susceptibility to vagaries of
nature: MCSPL operation is seasonal in nature as potato is a winter
season crop with its harvesting period commencing in March. The
loading of potatoes in cold storages begins by the end of February
and lasts till March. Additionally, with potatoes having a
preservable life of around eight months in the cold storage,
farmers liquidate their stock from the cold storage by end of
season i.e., generally in the month of November. The unit remains
non-operational during the period between December to February.
Furthermore, lower agricultural output may have an adverse impact
on the rental collections as the cold storage units collect rent on
the basis of quantity stored and the production of potato is highly
dependent on vagaries of nature.
* Competition from other local players: In spite of being capital
intensive, the entry barrier for new cold storage is low, backed by
capital subsidy schemes of the government. As a result, the potato
storage business in the region has become competitive, forcing cold
storage owners to lure farmers by providing them interest bearing
advances against stored potatoes which augments the business risk
profile of the companies involved in the trade.
* Leveraged capital structure with weak debt coverage indicators:
Capital structure of the company remained leverages on account of
negative networth as on March 31, 2020. The debt coverage
indicators of the company remain weak as on March 31, 2020.
Moreover, the Interest coverage ratio remains on the same line
during the said period.
Key Rating Strength:
* Experienced promoter and long track record of operations: MCSPL
is into cold storage services for potatoes since 1997 and thus has
long track record of operations. Furthermore, the promoters of
MCSPL are having more than two decades of experience in this line
of business.
* Proximity to potato growing area: MCSPL's storing facility is
situated in the Midnapore district of West Bengal which is one of
the major potato growing regions of the state. The favourable
location of the storage unit, in close proximity to the leading
potato growing areas provides it with a wide catchment and making
it suitable for the farmers in terms of transportation and
connectivity.
Mangaldeep Cold Storage Private Ltd. incorporated on April 21, 1997
was promoted by Samui family of West Bengal to set up a cold
storage facility with a storage capacity of 15,800 MTPA in Paschim
Midinipur district of West Bengal. MCSPL is engaged in the business
of providing cold storage facility primarily for potatoes to
farmers & traders. Besides providing cold storage facility, it also
provides advances to farmers for farming activities against the
potato stored.
NEW LAXMI: CARE Lowers Rating on INR33.50cr LT Loan to B+
---------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of New
Laxmi Industries Private Limited (NLIPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 33.50 CARE B+; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category and
Revised from CARE B; Stable
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from NLIPL to monitor the ratings
vide e-mail communications/letters dated June 10, 2020, July 27,
2020, September 10, 2020, November 3, 2020, November 24, 2020,
January 8, 2021, January 19, 2021 and numerous phone calls.
However, despite CARE's repeated requests, the company has not
provided the requisite information for monitoring the ratings. In
line with the extant SEBI guidelines, CARE has reviewed the rating
on the basis of the best available information which however, in
CARE's opinion is not sufficient to arrive at a fair rating. The
rating on NLIPL's bank facilities will now be denoted as CARE B+;
Stable; ISSUER NOT COOPERATING.
Detailed description of the key rating drivers
Key Rating Weaknesses
* Relatively small scale of operation with low profitability
margin: NLIPL is a medium player vis-à-vis other players in the
iron & steel industry marked by its total operating income of
INR78.71 crore (Rs.33.76 crore in FY18) with a PAT of INR0.96 crore
(Rs.0.26 crore in FY18) in FY19. Furthermore, the total operating
income of the company witnessed y-on y growth of 133.15% due to
higher demand of its products in the market place coupled with
addition of new customers. The total net worth was small at INR4.86
crore as on March 31, 2019. The moderate size restricts the
financial flexibility of the company in times of stress. The
profitability margins of the company also remained low marked by
PBILDT margin of 3.94% (3.72% in FY18) and PAT margin of 1.22%
(0.78% in FY18) in FY19. Moreover, the PBILDT margin improved
marginally during FY19 due to better management cost of operations.
Furthermore, the PAT margin also improved in FY19 on account of
higher increase in PAT level vis-à-vis increase in interest
expenses charges during the said period.
* Risk associated with diversifying project: The Company is into
manufacturing of structural steel. However, the company is engaged
in an expansion project and diversifying into manufacturing of "TMT
Bars" with an installed capacity by 29,000 MTPA. The cost of
expansion project is estimated to be INR27.44 crore which is funded
through promoters' fund of INR6.32 crore, unsecured loan from
promoter amounting to INR6.12 crore and term loan of INR15.00
crore. The company has already spent around INR16.00 crore on the
aforesaid project till July 31, 2019, funded by term loan of
INR13.00 crore and balance through promoters' contributions and the
same is estimated to be completed by November, 2019. Since debt
portion of the project has already been tied up and thus project
funding risk is reduced to a certain extent. However, 58% of the
project cost has already been incurred and thus project is into
moderate stage of completion. Going forward, the ability to
complete the expansion project in timely manner and derive benefits
out of it as envisaged will be crucial for the company.
* Lack of backward integration vis-à-vis volatility in raw
material prices: NLIPL does not have any backward integration for
its basic raw material (sponge iron, pig iron, scrap iron etc.) for
producing structural steel and is required to purchase the same
from open market. The finished goods as well as raw material prices
of iron and steel products are volatile in nature. The degree of
backward integration defines the ability of the company to minimize
price volatility risk and withstand cyclical downturns generally
witnessed in the steel industry. Since, raw material is the major
cost driver for NLIPL accounting for about 96% of the total cost of
sales in FY19, any southward movement of finished goods price with
no decline in raw material price result in adverse performance of
the company.
* Stiff competition due to fragmented and cyclical nature of the
industry with presence of many unorganized player: The Company is
engaged in the manufacturing of structural steel, which is
primarily dominated by large players and characterized by high
fragmentation and competition due to the presence of numerous
players in India owing to relatively low entry barriers. High
competitive pressure limits the pricing flexibility of the industry
participants which induces pressure on profitability. The fortunes
of companies like NLIPL from the iron & steel industry are heavily
dependent on the automotive, engineering and infrastructure
industries. Steel consumption and, in turn, production mainly
depends upon the economic activities in the country. Construction
and infrastructure sectors drive the consumption of steel. Slowdown
in these sectors may lead to decline in demand of steel.
Furthermore, all these industries are susceptible to economic
scenarios and are cyclical in nature.
* Leveraged capital structure with moderate debt coverage
indicators: The overall gearing ratio of the entity remained high
at 3.15x as on March 31, 2019. Improvement in capital structure was
on account of infusion of equity amounting to INR2.00 crore.
However, the debt coverage indicators of the company remained
moderate marked by satisfactory interest coverage of 2.72x (3.18x
in FY18) and high total debt to GCA of 9.85x (12.37x in FY18) in
FY19. The interest coverage ratio deteriorated marginally during
FY19 on account of high interest costs during the period.
Furthermore, the total debt to GCA also deteriorated during FY19 on
account of high debt level as on account closing date.
Key Rating Strengths
* Experienced management with satisfactory track record of
operation: New Laxmi Industries Private Limited established in the
year 2003 and thus has satisfactory track record of operations Mr.
Pawan Kumar Gupta (aged, 59 years), having more than three decade
of experience in similar line of business, looks after the day to
day operations of the company along with other directors and a team
of experienced professionals who have rich experience in the
similar line of business.
* Strategic location of the plant: NLIPL's plant is located in
Khurda of Odisha where the raw materials are available in
abundance. Further, the coal and ironore rich states of Jharkhand
and Orissa are also located nearby. The proximity to the raw
material sources reduces the transportation cost to the company.
Besides, the region has large number of steel manufacturers as well
as end users. Hence, the company has a large ready market to sell
its products.
New Laxmi Industries Private Limited (NLIPL) was incorporated in
February 2003 by Mr. Pawan Gupta. The Company was initially into
manufacturing of granite. However, the company has shut down its
granite manufacturing unit in 2014. However, the company has
started its operation from 2015 to engage into manufacturing of
structural steel items with its factory located At- Khurda, Odisha
with a current installed capacity of 29,000 MTPA. Currently, the
company is doing an expansion project and diversifying into
manufacturing of "TMT Bars" with an installed capacity by 29,000
MTPA. The cost of expansion project is estimated to be INR27.44
crore which is to be funded through promoters' fund of INR6.32
crore, unsecured loan from promoter amounting to INR6.12 crore and
term loan of INR15.00 crore. The company has already spent around
INR16.00 crore on the aforesaid project till July 31, 2019, funded
by term loans of INR10.00 crore and balance through promoters'
contributions and the same is estimated to be completed by
November, 2019. Mr. Pawan Kumar Gupta (Director) having around
three decades of experience, in the similar line of business, look
after the day to day operation of the company. He is supported by
other directors and a team of experienced professionals.
NICE PROJECTS: Insolvency Resolution Process Case Summary
---------------------------------------------------------
Debtor: Nice Projects Limited
C-56A, Kalkaji
New Delhi
DL 110019
IN
Insolvency Commencement Date: February 12, 2021
Court: National Company Law Tribunal, Gurugram Bench
Estimated date of closure of
insolvency resolution process: August 11, 2021
Insolvency professional: Sunita Umesh
Interim Resolution
Professional: Sunita Umesh
M/s. UCC & Associates LLP
Chartered Accountants
1315, Ansal Tower
38 Nehru Place
New Delhi
Delhi 110019
E-mail: sunita.umesh@uccglobal.in
niceprojects.cirp@gmail.com
Last date for
submission of claims: February 27, 2021
NILGIRI DAIRY: CARE Reaffirms B Rating on INR15cr LT Loan
---------------------------------------------------------
CARE Ratings reaffirmed ratings on certain bank facilities of The
Nilgiri Dairy Farm Private Ltd (NDF), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank
Facilities 15.00 CARE B; Stable Reaffirmed
Detailed Rationale & Key Rating Drivers
The rating assigned to the facilities of NDF is constrained by the
moderate scale of operations and supply chain disruption among
COVID 19 pandemic, continuing losses reported by the company and
the weak capital structure with an eroded net worth. CARE also
takes note of the deterioration of the financial risk profile of
the parent group and uncertainty over the Future-Reliance deal. The
weaknesses are however partially offset by the company being a
fully owned subsidiary of Future Group, one of the largest
retailers in India.
Rating Sensitivities
Positive - Factors that can lead to positive rating action/
upgrade
* Improvement in the credit profile of the parent
* Recovery in sales to pre COVID levels and positive PBIDLT.
Negative - Factors that can lead to negative rating action/
downgrade
* Continuing losses which needs to funded by debt
Detailed description of the key rating drivers
Key Rating Weaknesses
* Moderate scale of operations and supply chain disruption amid
COVID 19 pandemic: During FY20, the company earned around 70% of
its revenues from franchisee stores and future stores, and the
remaining from sales to distributors. The company's franchisee
stores are concentrated in Southern India with majority of sales
occurring in Tamil Nadu and Karnataka. The company sells its
products to the various franchisee stores and earns royalty income
as well. Till FY19, the private brands under FCL sold their
products through NDF to FRL (Future Retail Limited) but since the
beginning of FY20, the private brands directly sold to FRL.
Additionally, company closed down non performing stores as well. As
a result during FY20 (A), NDF reported lower total revenue of
INR179.02 crore against INR245.67 Cr in FY19. During FY20, the
company reported PBILDT loss of INR6.61 Cr against INR5.82 Cr in
FY19. Amid COVID-19 crisis across the country, the company's sales
further deteriorated with disruptions in the supply chain. The
company reported sales of INR4.5 Cr/month in Q3FY21 against INR15
Cr/month reported pre-COVID. As on Sep 30, 2020 the company
reported TOI of INR35.27 Cr.
* Continuing losses and weak capital structure: During FY20, the
company reported PBILDT loss of INR6.61 Cr and cash loss of
INR31.63 Cr as against PBILDT loss of INR5.82 Cr and cash loss of
INR17.87 Cr in FY19. Due to losses incurred by the company in past,
its networth has been eroded as on March 31, 2020 (A). As on
December 31, 2020, the company had term loan of INR1 Cr and
sanctioned working capital limit of INR10.20 Cr. The cash losses
are funded by ICDs from Future Consumer Limited (FCL). During FY20,
FCL infused ICD of INR21.73 Cr. Till 9MFY21, the company did not
receive any ICD from the group, however the company is delaying the
payments to be made to FCL and is managing the liquidity position.
* Deterioration of financial risk profile of the parent group: NDF
received financial support from the Group in the form of unsecured
borrowings to fund its cash losses and business expansion. FCL's
stretched liquidity condition was further exacerbated by the
ongoing coronavirus pandemic, due to which it was unable to repay
interest and principal on its outstanding NCD's that was due on
September 5, 2020. Furthermore, Future Consumer Limited (FCL)
defaulted in debt servicing of bank facilities in some of the banks
and FCL has applied for One Time Restructuring (OTR) with all the
banks. Losses incurred by NDF in past, were primarily funded out of
unsecured loans from FCL. Future Group has entered into an
agreement with Reliance Group for asset/stake sale and the
regulatory approval is pending for the same. Timely closure of the
deal would be critical for the credit profile of NDF.
Key rating strengths
* Business linkages with Future Group: The Company is a fully owned
subsidiary of Future Group, which is among the largest retailers in
India. In FY15, Future Consumer Limited (FCL) acquired the company
by purchasing 99.96% of shares from erstwhile promoters (balance
0.04% were bought in FY16). During FY20, around 15% of the total
sales of NDF were to Future group and in turn more than 75% of the
purchases of NDF were from the group.
Liquidity: Stretched
The company reported cash losses over the years and the same is
funded by ICD from parent group. The company continues to report
losses and had not received any ICD in FY21 from the parent,
however the company manages its liquidity by delaying the payments
for purchases from parent group. As per banker interaction, the
average monthly utilisation of the working capital limit is more
than 95%. The company's working capital cycle remains comfortable
at 15 days in FY20. The company did not avail moratorium under the
COVID19 package.
The Nilgiri Dairy Farm Private Limited (NDF) operates chain of
retail stores/ franchisee stores under the brand name 'Nilgiris
1905' selling and trading groceries, milk products and bakery
items. The company through its two subsidiaries viz Nilgiri's
Mechanized Bakery Pvt Ltd and Appu Nutritions Pvt Ltd, operates
bakery and bread unit. On November 20, 2014, FCL acquired the
company by purchasing 99.96% of shares from erstwhile promoters
(balance 0.04% were bought in FY16).
OASIS MARINE: Insolvency Resolution Process Case Summary
--------------------------------------------------------
Debtor: Oasis Marine Private Limited
Office No. 320
Luxuria Business Hub
Near Dumar Resort
Dumas Road, Surat
GJ 395007
IN
Insolvency Commencement Date: February 15, 2021
Court: National Company Law Tribunal, Ahmedabad Bench
Estimated date of closure of
insolvency resolution process: August 14, 2021
Insolvency professional: Saaurabh Jhaveri
Interim Resolution
Professional: Saaurabh Jhaveri
6th Floor, 620 Jolly Plaza
Opp. Athwagate Circle
Athwagate, Surat 395001
E-mail: sjhaveri333@gmail.com
Last date for
submission of claims: March 3, 2021
PALA DIOCESAN: Ind-Ra Hikes Bank Facilities Rating to 'BB-'
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded Pala Diocesan
Medical Education Trust's (PDMET) bank facilities to 'IND BB-' from
'IND B'. The Outlook is Stable.
The instrument-wise rating actions are:
-- INR50.00 mil. Fund-based working capital facility assigned
with IND BB-/Stable rating;
-- INR245.34 mil. Proposed bank loans* assigned with IND BB-/
Stable rating; and
-- INR1,704.66 bil. (increased from INR1,425.70 bil.) Bank loans
upgraded with IND BB-/Stable rating.
* Unallocated limits
KEY RATING DRIVERS
The upgrade reflects the operationalization of PDMET's 350-bed,
multi-speciality hospital since January 2020 and its healthy
financial performance in its first year of operation. The hospital,
which was established in November 2019, saw significant demand,
resulting in comfortable occupancy level of above 70% and
significant growth in the average number of patient visits per day
over January-December 2020 (881 in December 2020 from 396 in
January 2020). Consequently, the trust reported hospital income of
INR114.07 million in FY20 and collected INR667.04 million till
end-December 2020. Ind-Ra expects the demand for the hospital to
remain healthy due to its geographical location in Kottayam
District, Kerala and the occupancy ratio to remain high over the
medium term.
The ratings factor in PDMET's improved scale of operations with a
274.80% yoy rise in its revenue to INR148.88 million in FY20,
mainly on increased hospital receipts, which were the main source
of income (76.62%), followed by tuition fee receipts (13.32%). Its
tuition fee income rose 2.23% yoy to INR19.83 million in FY20,
despite a fall in the student headcount to 231 from 248 in FY19
(FY21: 225 students), on an increase in the average tuition per
student to INR85,860 from INR78,233. The trust collected INR667.04
million over April-December 2020 and targets to achieve an income
above INR1,000 million for FY21. Ind-Ra expects the revenue to grow
consistently over the medium term due to increased hospital
capacity, coupled with comfortable occupancy levels, on high
demand.
The trust has plans to increase the hospital bed capacity to 700
beds from 350 beds with a total cost of INR400 million. The capex
will be implemented in two phases: Phase I for 100 beds will be
completed by April 2021 and Phase II for the balance will be
completed by September 2021.
The ratings are constrained by PDMET's high debt burden
(debt/current balance before interest and depreciation) and weak
debt service coverage ratio (DSCR) of under 1x over FY17-FY20. The
DSCR turned negative at 4.97x in FY20 from 0.18x in FY19 and the
debt/CBBID turned negative at 12.10x (51.88x) due to negative CBBID
of INR114.91 million (INR6.35 million). The debt/income ratio
increased to 934.21% in FY20 from 828.70% in FY19, mainly due to an
increase in the total debt to INR1,390.82 million from INR329.17
million, due to the trust's debt-funded capex plans towards the
multi-speciality hospital. Over FY17-FY20, the trust's debt
servicing was met through unsecured loans and donations worth
INR703.18 million provided by the trustees. PDMET's debt burden is
likely to increase over FY21-FY22, due to the ongoing capex for the
hospital.
The ratings are further constrained by the trust's increased
operating loss of INR117.97 million in FY20 (FY19: loss of INR1.60
million) due to higher year-on-year growth in operating expenditure
(690.33%) than that of the operating income (358.85%). The trust
registered a net deficit of INR125.83 million in FY20 (FY19: net
deficit of INR13.69 million), mainly due to a 414.30% yoy growth in
the total expenditure.
Liquidity Indicator – Stretched: Although PDMET's available funds
(cash and unrestricted investments) increased to INR13.33 million
in FY20 from INR9.47 million in FY19, it did not provide adequate
financial cushion to the total debt (FY20: 0.96%; FY19: 2.88%) and
operating expenditure (5.05%; 28.38%). The collection period, that
was nil over FY17-FY19, rose to 10 days in FY20. The trust has an
overdraft facility of INR50 million sanctioned in January 2020; the
average working capital utilization was 81% for the 12 months ended
December 2020. PDMET will rely on unsecured loans and donations
provided by the trustees to meet the scheduled debt service
commitments of INR78.56 million in FY21.
The ratings benefit from PDMET's around 16-year-long operational
track record and adequate financial support from the trustees.
Ind-Ra expects the support from the trustees to continue, if
required.
RATING SENSITIVITIES
Positive: Events that may, individually or collectively, lead to a
positive rating action are:
- the trust reporting operating profitability
- the DSCR rising above 1x over the medium term
- a significant fall in the debt/CBBID to below 6x
Negative: Events that may, individually or collectively, lead to a
negative rating action are:
- delay in the completion of capex works undertaken
- the lack of financial support from the trustees in the form of
unsecured loans and donations
COMPANY PROFILE
PDMET was established as a public charitable trust in 2005 in
Kottayam, Kerala. It runs a nursing college named Mar Sleeva
College of Nursing, which offers Bachelor of Nursing, Post Basic
Bachelor of Nursing and Master of Nursing courses. It also manages
a multi-speciality hospital (Mar Sleeva Medicity) with 700 beds
capacity (350 beds are operational) and a men's hostel (St.
Alphonsa Hostel).
PHPC ASSOCIATES: CARE Lowers Rating on INR10cr LT Loan to B+
------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of PHPC
Associates (PHPC), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 10.00 CARE B+; Stable; ISSUER NOT
Facilities COOPERATING; Revised from
CARE BB-; Stable and moved to
ISSUER NOT COOPERATING category
CARE has been seeking information, to carry out annual
surveillance, from PHPC to monitor the rating(s) vide email
communications dated December 10, 2020, January 13, 2021, January
20, 2021, January 25, 2021 and numerous phone calls. However,
despite CARE's repeated requests, the firm has not provided the
information for monitoring the requisite ratings. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the best available information which however, in CARE's opinion
is not sufficient to arrive at a fair rating. The rating on PHPC
Associates' bank facilities will now be denoted as CARE B+; Stable;
ISSUER NOT COOPERATING. Further, due diligence with the lender
could not be conducted.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The rating has been revised on account of non-availability of
requisite information due to non-cooperation by PHPC associates
with CARE's efforts to undertake a review of the rating
outstanding. CARE views information availability risk as a key
factor in its assessment of credit risk.
Detailed description of the key rating drivers
At the time of last rating on April 6, 2020, the following were the
rating strengths and weaknesses:
Key Rating Weaknesses
* Highly competitive and fragmented trading industry: The firm
operates in highly fragmented and competitive industry wherein the
presence of large number of entities in the un-organized sector and
established players in the organized sector is seen. Furthermore,
the firm is also exposed to competitive pressures from domestic
players as well as from big, well established players from abroad.
However, since only Karwar port can import bitumen in the
north-western Karnataka region, where the firm has storage point,
it makes the firm's competition primarily limited to
traders/importers operating out of Karwar.
* Constitution of the entity as a proprietorship firm with inherent
risk of withdrawal of capital: The proprietor typically makes all
the decisions and leads the business operations. If he becomes ill
or disabled, there may not be anybody else to step in and maintain
the optimum functioning of business. A business run by proprietor
also poses a risk of heavy burden, i.e. an inherent risk of capital
withdrawal, at a time of personal contingency which can adversely
affect the capital structure of the firm. Moreover, proprietorship
firms have restricted access to external borrowing which limits
their growth opportunities to some extent. Further, the proprietor
has withdrawn capital of INR3.72 crore during FY19.
* Geographically concentrated revenue profile: The revenue profile
of the firm is concentrated in nature, with 100% of the revenue
booked from customers located in the states of south India exposing
the firm to geographical concentration risk. Political unrests,
ecological disturbances or natural disasters might adversely affect
the firm's profitability.
* Susceptibility to fluctuation in bitumen prices: The prices of
bitumen are volatile as they are linked to supply and demand of
crude oil. However, comfort can be drawn from the fact that the
firm was able to pass the increase in the prices to its customers.
Key Rating Strengths
* Experience of the proprietor for over a decade in the business of
trading bitumen: The proprietor, Mr. Umesh Hegde, has around 16
years of experience in bitumen trading. Prior to the establishment
of PHPC, Mr. Hegde was engaged in the transportation of Bitumen
through the group concern, Hegde Bulk Carriers. Mr. Hegde is also
the director in Krush-Tar Industries Private limited, which is one
of the major suppliers of bitumen for PHPC. Over the years, Mr.
Umesh Hegde has established a clientele network across Karnataka
region.
* Modest scale of operations with increasing total operating
income: The scale of operations of the firm marked by total
operating income had increased by 0.29% and stood at INR112.82
crore in FY19 compared to INR112.49 crore in FY18 due to increase
in orders and addition of new customers during the year. Further,
the firm had achieved total operating income of INR206.90 crore
till March 15, 2020.
* Satisfactory profitability margins albeit declined: The
profitability margins of the firm marked by PBILDT margin had
declined by 232 basis points and stood at 5.41% in FY19 as the firm
had reduced the prices by INR300 per metric tonne to compete with
the increased number of competitors and to increase the sales as
well. Further the PAT margin of the firm had declined by 196 basis
points and stood at 2.34 % in FY19 due to increase in interest and
finance charges coupled with decrease in PBILDT in absolute terms.
* Moderate capital structure and debt coverage indicators: The
capital structure of the firm marked by overall gearing ratio had
deteriorated and stood moderately leveraged at 1.83x as on March
31, 2019 compared to 1.60x as on March 31, 2018. This was mainly
due to increase in term loans and working capital utilisation along
with decrease in net worth on the back withdrawal of capital of
INR3.72 crore by promoter in FY19. Further, the debt coverage
indicators of the firm marked by interest coverage ratio of the
firm deteriorated from 4.92x in FY18 to 2.75x in FY19 on the back
of decline in PBILDT in absolute terms coupled with increase in
interest and finance charges. Similarly, the total debt to GCA of
the firm deteriorated from 2.91x in FY18 to 4.64x in FY19 due to
decrease in gross cash accruals during the year. Further, total
debt to cash flow from operation improved and stood at 2.17x during
FY19.
* Comfortable operating cycle: The firm operates in working capital
intensive nature of operations. However, the operating cycle of the
firm had remained satisfactory at 39 days in FY19. The firm gives
credit period of 10- 90 days to its customers. This majorly depends
on customer to customer as the firm has around 800 customers who
are engaged in road construction activities across south India.
Further, for import purchases, the firm makes payment to the
supplier at once bitumen reaches the customs port and takes credit
period of 30 days from local suppliers. The firm places the order
as and when required and directly transports from the supplier's
place/Karwar port to the customer's destination.
* Stable outlook for bitumen industry: Bitumen is used as a binder
in road construction and in roofing and waterproofing applications.
Almost 90% of the bitumen is used in India is in road construction
with the balance of 10% shared equally for roofing and
waterproofing. The Indian bitumen market that is currently around 5
million tonnes is expected to grow in the future due to the
Governments proposed construction projects to upgrade the road
network. India has the world's second largest road network after
the United States of America, with a road infrastructure of over
47,000 km could increase the demand in near future.
PHPC Associates (PHPC) was established in the year 2012 as a
proprietorship concern by Mr. Umesh Hegde. The firm is located at
Mangaluru (Karnataka) and engaged in the trading of bitumen,
emulsion and furnish oil. The products are used mostly in
construction of roads, bridges, fly overs, airport runways, tunnels
and dams. The firm imports bulk bitumen from Arab countries and
sells to the road contractors across south India. The firm
purchases emulsion, furnish oil from local suppliers. The
proprietor has around 16 years of experience in bitumen trading and
he is the founder president of All India Bulk Bitumen Transporters
Association.
PITTI CASTINGS: Ind-Ra Hikes LongTerm Issuer Rating to 'B+'
-----------------------------------------------------------
India Rating and Research (Ind-Ra) has upgraded Pitti Castings Pvt
Ltd's (PCPL) Long-Term Issuer Rating to 'IND B+' from 'IND B-'. The
Outlook is Stable.
The instrument-wise rating action is:
-- INR75 mil. (reduced from INR300 mil.) Fund-based facilities^#
Long-term rating assigned and upgraded; short-term rating
assigned with IND B+/Stable /IND A4 rating; and
-- INR225 mil. Proposed fund-based facilities* assigned with
IND B+/Stable /IND A4 rating.
^Long-term rating of 'IND B-'/Stable assigned before being
upgraded to 'IND B+'/Stable
#The final rating has been assigned following the receipt of the
sanction letter by Ind-Ra.
*The provisional rating of the proposed bank facilities has been
converted to final rating as per Ind-Ra's updated policy. This is
because the agency notes that debt seniority and general terms and
conditions of bank facilities tend to be uniform across banks, and
are not a rating driver.
The upgrade reflects an improvement in the overall credit profile
of the company in FY20
KEY RATING DRIVERS
PCPL's revenue surged by 21.7% to INR1,317 million in FY20 due to
an increase in the number of orders flow from a group company and
new customers and a growth in realizations to INR152 per kg (FY19:
INR135 per kg). The scale of operations continued to be medium. The
company's capacity utilization increased to 40.3% in FY20 (FY19:
37%), led by increased demand for electric motors (end-product).
PCPL derived 50% of its revenue from its group company in FY20
(FY19: 60%). The company recorded a revenue of INR702.6 million
during 9MFY21. Ind-Ra expects the company's revenue to decline
slightly in FY21 due to the impact of COVID-19-led disruptions.
However, the scale of operations would remain medium over the near
term owing to stable capacity utilization and stable demand in the
electrical motor casting segment.
Furthermore, the company reported an EBITDA profit of a modest 7.9%
in FY20 against a loss in FY19, as the rise in revenue led to
increased absorption of fixed costs. The ROCE was 5% in FY20 (FY19:
negative ROCE). Ind-Ra expects the EBITDA margin to decline in FY21
owing to the likely fall in revenue. The margins are likely to
remain modest over the medium term due to the intense competition
in the industry.
In addition, the credit metrics improved in FY20 mainly due to an
improvement in the absolute EBITDA to INR104 million (FY19: EBTIDA
loss). The net leverage (adjusted net debt/operating EBITDA) was
7.7x in FY20 and the interest coverage (operating EBITDA/interest
expenses) was 4.9x. Ind-Ra expects the credit metrics to weaken
slightly in FY21 owing to the likely fall in absolute EBITDA.
Furthermore, the credit metrics are likely to remain modest over
the medium term due to continued high debt levels (FY20: INR809
million; FY19: INR928 million) and modest EBITDA margins.
Liquidity Indicator- Stretched: PCPL repaid the entire debt of
INR550 million with a one-time settlement with the Bank of Baroda
during September 2019. The company's peak utilization of the
fund-based limits was 91% over the 12 months ended January 2021.
The cash flow from operations declined to INR121 million in FY20
(FY19: INR199 million) due to an elongation in the net cash
conversion cycle to 64 days (14 days), resulting from an increase
in the debtor days to 71 days (25 days) and a fall in creditor days
to 53 days (85 days). For its working capital requirements, the
company is largely dependent on promoter's funding as well as
customer advances from the group company. The company did not avail
the Reserve Bank of India-prescribed moratorium.
The ratings continue to be supported by the promoters'
three-decade-long experience in the casting business.
RATING SENSITIVITIES
Negative: A decline in the scale of operations or EBITDA margins,
leading to deterioration in the credit metrics, with the interest
coverage falling below 1.3x, on sustained basis, or weakening of
the liquidity position will be negative for the rating.
Positive: A substantial improvement in the scale of operations
while maintaining the EBITDA margin, leading to a sustained
improvement in the credit metrics and liquidity position, will be
positive for the ratings
COMPANY PROFILE
Established in August 2012, PCPL is a part of the Pitti group of
companies. It manufactures graded iron and steel castings, which
are used in various industries such as windmill, earth-moving
equipment and vehicle.
PRABHU DAYAL: CARE Lowers Rating on INR6.0cr LT Loan to D
---------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Prabhu Dayal and Brothers (PDB), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 6.00 CARE D; ISSUER NOT COOPERATING;
Facilities Revised from CARE B-; Stable
and moved to ISSUER NOT
COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from PDB to monitor the ratings
vide e-mail communications dated February 4, 2021, January 12,
2021, January 6, 2021, December 30, 2020 and numerous phone calls.
However, despite CARE's repeated requests, the firm has not
provided the requisite information for monitoring the rating. In
line with the extant SEBI guidelines, CARE has reviewed the ratings
on the basis of the best available information which however, in
CARE's opinion is not sufficient to arrive at a fair rating. The
rating on PDB's facilities will now be denoted as CARE D; ISSUER
NOT COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The rating of the firm has been revised on account of stressed
liquidity position leading to continuous overdraws in working
capital limits beyond 30 days.
Rating Sensitivity
Positive Factors
* Utilization of working capital limits within the sanctioned
limits on sustained basis.
Detailed description of the key rating drivers
Credit Risk Assessment
Key Rating Weakness
* Over utilization of working capital limits: The overdraft has
been continuously over utilized for more than 30 days leading to
the account being classified as SMA1 by the bank.
Liquidity: Poor - Poor liquidity marked by low accruals and over
utilized bank limits. CARE is unable to comment on moratorium
availed by the firm in light of limited information available.
Uttar Pradesh based, Prabhu Dayal and Brothers (PDB) was
established in October 1988 as a partnership firm and is currently
managed by Mr. Rajendra Prasad and Mrs. Shashi Arora sharing
profits and losses equally. PDB is engaged in the distribution and
trading of fertilizers, pesticides, seeds and other allied
products. The firm procures these traded products from
manufacturers all over India and further sells these products to
the retailers and farmers who are situated in Allahabad, Ghaziabad
and nearby regions.
ROUT INFRASTRUCTURE: CARE Lowers Rating on INR7.0cr Loan to B+
--------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of Rout
Infrastructure Private Limited (RIPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 7.00 CARE B+; Stable; ISSUER NOT
Facilities COOPERATING; Revised from
CARE BB-; Stable and moved to
ISSUER NOT COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from RIPL to monitor the rating
vide e-mail communications/letters dated October 16, 2020, Nov. 6,
2020, Nov. 24, 2020, Jan. 8, 2021, February 2, 2021 and numerous
phone calls. However, despite CARE's repeated requests, the company
has not provided the requisite information for monitoring the
rating. In line with the extant SEBI guidelines, CARE has reviewed
the rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating. The rating on RIPL's bank facilities will now be denoted as
CARE B+; Stable; ISSUER NOT COOPERATING. Further, banker could not
be contacted.
Detailed description of the key rating drivers
Key Rating Weaknesses
* Small scale of operation with moderate profitability margin:
RIPL continues to be a small player in the construction industry,
with total operating income and net profit of INR34.37 crore and
INR1.65 crore, respectively, in FY19. Further, total capital
employed was moderate at INR14.76 crore as on March 31, 2019.
Income decreased on account of lower volume of order execution
during FY19. This apart, operating margin of the company improved
by 192 bps from 5.37% in FY18 to 7.29% in FY19 on account of lower
operating cost during the period. Moreover, PAT margin of the
company improved by 81 bps to 4.32% in FY19 from 3.51% in FY18.
Moreover, the company has achieved total operating income of
INR38.00 crore during 11MFY20.
* Risk associated with participating in tenders and intense
competition in the industry: The company has to bid for the
contracts based on tenders opened by the various governments and
public sector units. Upon successful technical evaluation of
various bidders, the lowest bid is awarded the contract. The
company receives projects which majorly are of a short to medium
tenure (i.e. to be completed within maximum period of one to two
years). Furthermore, orders are generally tender driven floated by
government units indicating a risk of non-receipt of contract in a
competitive industry. The outlook of construction sector appears
challenging in view of slow execution of the existing order book in
view of hindrances related to land acquisition, obtaining requisite
clearances, labour shortage and liquidity issues with the clients,
etc. Additionally, the sector is plagued with elongated working
capital cycle leading to increase in debt level of construction
companies.
* Working capital intensive nature of business: The operations of
the company remained working capital intensive as the company
executes orders mainly for public sector units and government
departments. Due to its working capital intensive nature of
operations, the company stretches its payments to its suppliers.
* Volatility associated with fluctuations in input prices: The
major input materials for the company are cement, bitumen, steel
structures, angles, bricks, sand, rods etc., the prices of which
are volatile. Further the orders executed by the company contain
price escalation clause on some of the orders and thus the company
mitigates price volatility of the input materials to some extent.
This apart, any increase in labour prices will also impact its
profitability being present in a highly labour intensive industry.
* Leveraged capital structure with moderate debt coverage
indicators: Overall gearing ratio of the entity has improved and
remained leveraged at 2.73x as on March 31, 2019 vis-a-vis 3.95x as
on March 31, 2018. Improvement in capital structure was due to
accretion of profits to reserve and lower unsecured loan from
promoters as on balance sheet date. The debt coverage indicators
represented by total debt to GCA has also improved in FY19 over
FY18 and remained moderate at 6.56x as on March 31, 2019. The same
has improved mainly on account of lower debt levels as on balance
sheet date date. Moreover, the Interest coverage ratio deteriorated
to 13.27x in FY19 from 129.65x in FY18 on account of increase in
interest expenses vis-à-vis increase in PBILDT level.
Key Rating Strengths
* Experienced management:
Rout Infrastructure Private Limited started its business from
September 2008. It is a professionally managed company managed by
Mr. Bikram Rout (Director) along with Mrs. Bhagyalaxmi Rout
(Director) and Mr. Prakash Chandra Tripathi (Director) who has a
long experience in similar line of business. They are ably
supported by other engineers and professionals who have long
experience in the similar industry.
* Satisfactory track record of operation: Rout Infrastructure
Private Limited started its business from September 2008 and thus
has satisfactory track record of operations of around a decade.
* Satisfactory order book position providing revenue visibility:
The company has satisfactory order book position of INR75.30 crore
(which is 2.20x of FY19 turnover) as on February 29, 2020, which is
expected to be completed by March 2021.
Rout Infrastructure Private Limited was incorporated in September
2008. Since its inception, the company has been engaged in civil
construction and other civil work in the segment like roads,
bridges, and other layout development projects. It is a
professionally managed civil contractor managed by Mr. Bikram Rout
(Director) along with other directors Mrs. Bhagyalaxmi Rout
(Director) and Mr. Prakash Chandra Tripathi (Director) who have
experience of around 20 years, 10 years and 15 years respectively
in similar line of business. They are ably supported by other
engineers and professionals who have long experience in the similar
industry.
SHETH DEVELOPERS: CARE Lowers Rating on INR10cr LT Loan to B
------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Sheth Developers (SD), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 10.00 CARE B; ISSUER NOT COOPERATING;
Facilities Rating continues to remain
Under ISSUER NOT COOPERATING
Category and Revised from
CARE B+
Detailed Rationale, Key Rating Drivers and Detailed description of
the key rating drivers
CARE had, vide its press release dated November 28, 2019, placed
the rating of SD under the 'issuer noncooperating' category as SD
had failed to provide information for monitoring of the rating as
agreed to in its Rating Agreement. SD continues to be
non-cooperative despite repeated requests for submission of
information through email letter dated June 25, 2020, July 31,
2020, October 13, 2020, January 13, 2021, January 15, 2021, January
22, 2021 and numerous phone calls. In line with the extant SEBI
guidelines, CARE has reviewed the rating on the basis of the best
available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The revision in the rating assigned to the bank facilities of SD
takes into account no due diligence conducted and nonavailability
of information due to non-cooperation by SD with CARE's efforts to
undertake a review of the rating outstanding.
CARE views information availability risk as a key factor in its
assessment of credit risk.
Detailed description of the key rating drivers
At the time of last rating on November 28, 2019 the following were
the rating strengths and weaknesses:
Key Rating Weaknesses
* Moderate risk of execution: The Phase –II of Beverly Hill
project commenced from April, 2014 and is expected to be completed
by March 2018. The firm is yet to incur more than 50% % of the
total project cost, though current construction status is as per
scheduled timeline.
* Partnership nature and cyclical nature of the real estate
industry: SD is a partnership firm and is therefore exposed to
inherent risks such as withdrawal of capital by its partner's
leading to limited financial flexibility. The firm is exposed to
the cyclicality associated with the real estate sector which has
direct linkage with the general macroeconomic scenario, interest
rates and level of disposable income available with individuals.
* Presence in a competitive market: The real industry in India is
highly fragmented with most of the real estate developers
having region-specific presence.
Key Rating Strengths
* Experienced promoter group in real estate development in Pune: SD
is a part of the Sheth Realty Group (SRG) started by Mr. Rupesh
Sheth and Ms. Shilpa Sheth who have an average experience of more
than two and a half decades in the real estate Industry.
* Receipt of approvals and clearances for the project: SD has
received all the necessary clearances and approvals for the project
named Beverly Hills-Phase I related to land acquisition and
construction.
* Strategic location of the project with proximity to Hinjewadi IT
Park: The project has a strategic location being situated in one of
the established localities of Pune at Hinjewadi, which is close to
Hinjewadi IT Park Phase-I and around 4-5 kilometers from Balewadi.
The healthy absorption in the location is on account of proximity
to key locations like Bane, Pashan and Aundh road and has been in
demand due to the growing populace around the area.
* Comfortable booking status: The residential part of the project
is at nascent stage; however commercial space has already
been sold to land owners.
* Moderate funding risk: The execution of the project is dependent
of customer advances as around 58% of the project cost is to meet
through customer advances. SD has received around 79% of the
required advances as on September 30, 2015.
SD is a partnership concern, established in December 2010 as a
special purpose vehicle (SPV) of Sheth Realty Group (SRG) for
undertaking residential cum commercial project named 'Beverly
Hills' in Pune.
SHREE INDUSTRIES: CARE Lowers Rating on INR11cr Loan to B
---------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Shree Industries (SI), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 11.00 CARE B; Stable; ISSUER NOT
Facilities COOPERATING; Revised from
CARE B+; Stable and moved to
ISSUER NOT COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from of SI to monitor the
rating(s) vide e-mail communications dated September 7, 2020 to
January 29, 2021 and numerous phone calls. However, despite CARE's
repeated requests, the firm has not provided the requisite
information for monitoring the ratings. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of best
available information which however, in CARE's opinion is not
sufficient to arrive at fair rating. The rating on Shree Industries
bank facilities will now be denoted as CARE B; Stable; ISSUER NOT
COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
The rating has been revised on account of non-availability of
requisite information due to non-cooperation by Shree Industries,
with CARE'S efforts to undertake a review of the rating
outstanding, as CARE views information availability risk as key
factor in its assessment of credit risk profile. However, the
ratings continuous to be tempered by limited track record and
decreasing scale of operations, decreasing and thin profitability
margins susceptible to fluctuation in raw material prices,
leveraged capital structure and weak debt coverage indicators,
highly fragmented industry with intense competition from large
number of players and constitution as a partnership firm with
inherent risk of withdrawal of capital. The rating is, further
constrained on account of elongated operating cycle. The rating
however, is underpinned by experience of the partners for two
decades in cotton industry and location advantage.
Detailed description of the key rating drivers
At the time of last press release dated December 13, 2019 the
following were the rating strengths and weaknesses:
Key Rating Weaknesses
* Limited track record and decreasing scale of operations: SI
started its commercial operations from March 2015. The scale of
operations marked by the total operating has declined and stood
small at INR50.28 crore in FY19 from from INR67.69 crore in FY18
due to low yield during the year resulted in low order intake from
customers. The net worth base of the firm stood low at INR2.74
crores as on March 31, 2019.
* Decreasing and thin profitability margins susceptible to
fluctuation in raw material prices: The PBILDT margin improved and
stood at 2.98% in FY19 as compared to 2.31% in FY18 due to decline
in the cost of raw materials consumed, power and fuel, employee
costs and selling expenses. The PAT margin decreased from 0.16% in
FY18 to 0.15% in FY19 mainly on account of decrease in PBILDT in
absolute terms. Prices of raw cotton are highly volatile in nature
and depend upon the factors like area under cultivation, crop
yield, international demand-supply scenario, export quota decided
by the government and inventory carry forward of the previous year.
The cotton processing operators procure raw materials in bulk
quantities to avail discount from suppliers to mitigate the
seasonality associated with availability of cotton resulting in
higher inventory holding period.
* Leveraged capital structure and weak debt coverage indicators:
The capital structure marked by overall gearing ratio stood
leveraged at 4.52x as on March 31, 2019 as against 4.01x as on
March 31, 2018 mainly due to the decrease in tangible net worth.
The debt coverage indicators marked by total debt to GCA stood weak
at 41.07x as on March 31, 2019 as compared to 34.63x as on March
31, 2018 mainly due to decrease in GCA levels.
* Elongated operating cycle: The operating cycle stood at 106 days
in FY19 as compared to 83 days in FY18 due to the slow movement of
inventory on back of low orders in take and the firm holds
inventory for 80 days as the cotton is being agro commodity and its
production is seasonal (harvesting) from November to February in a
year. The firm makes payment to the suppliers in 5-10 days and
allows a credit period of 45 days. The average utilization of cash
credit facility stood at 80% during the last 12 months ending
November 2019.
* Highly fragmented industry with intense competition from large
number of players: The cotton industry is highly fragmented in
nature with several organized and unorganized players. Prices of
raw cotton are highly volatile in nature and depend upon the
factors like area under cultivation, crop yield, international
demandsupply scenario, export quota decided by the government and
inventory carry forward of the previous year. The cotton processing
operators procure raw materials in bulk quantities to avail
discount from suppliers to mitigate the seasonality associated with
availability of cotton resulting in higher inventory holding
period. Further, the profitability margins of the firm are
susceptible to fluctuation in raw material prices.
* Constitution as partnership firm with inherent risk of withdrawal
of capital: Constitution as a partnership firm has the inherent
risk of possibility of withdrawal of the partner's capital at the
time of personal contingency which can adversely affect its capital
structure. Furthermore, partnership firms have restricted access to
external borrowings as credit worthiness of the partners would be
key factors affecting credit decision for the lenders. Further, the
partners have withdrawn the capital of INR0.02 crore during FY19.
Key Rating Strengths
* Experience of the partners for two decades in cotton industry: SI
is promoted by Mr. Gourishankar Bacha along with his family members
and friends. The other partners Mr. Bapugowda B Patil, Mr. Mahesh
Veeranna Gumdal, Mr. Rajkumar V Raddewadi, Mr. Balachandra S Bacha,
Mr. Sumeet B Sindol are also actively involved in the day to day
operations of the firm. The partners are qualified graduates and
have two decades of experience in cotton ginning business. Due to
long term presence in the market by the partners, the firm has good
relation with customers and suppliers.
* Location advantage: SI located in one the major cotton growing
areas in Karnataka. Availability of raw material is not expected to
be an issue as the firm procures raw material (raw cotton) from the
farmers and traders located in and around Gulbarga. SI enjoys
proximity to the cotton producing belt of Karnataka which results
in ease of access to raw material with low transportation cost.
Moratorium: The firm had availed moratorium announced by RBI from
March 1, 2020 to August 31, 2020 on its debt obligations
Karnataka based, Shree Industries (SI) was established in September
2014 as a partnership firm by Mr. Gourishankar B Bacha along with
his family members and friends. The firm is engaged in processing
of cotton lint and seeds. The manufacturing unit is spread in total
area of 8 acres located at Gulbarga, kalaburagi (Karnataka). SI
purchases raw cotton from farmers located in and around Kalaburagi,
Karnataka. The firm processes the raw cotton and separates the lint
and cotton seeds from raw cotton. Later, pressing and compressing
cotton lint into bales along with packing the bales is undertaken.
SI sells bales to the customers in Karnataka, Tamil Nadu and
Gujarat and sells the cotton seeds to oil mills located in Punjab,
Haryana, Rajasthan and Maharashtra.
STERLING GATED: CARE Moves D Debt Rating to Not Cooperating
-----------------------------------------------------------
CARE Ratings has migrated the rating on bank facilities of Sterling
Gated Community Private Limited (SGCPL) to Issuer Not Cooperating
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Non-Convertible 60.00 CARE D; ISSUER NOT COOPERATING
Debentures Rating moved to ISSUER NOT
COOPERATING category
Detailed Rationale & Key Rating Drivers
SGCPL has not paid the surveillance fees for the rating exercise as
agreed to in its Rating Agreement. In line with extant SEBI
guideline, CARE's rating on Sterling Gated Community Private
Limited's instruments will now be denoted as CARE D; ISSUER NOT
COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
At the time of last rating on July 2, 2020 the following were the
rating strengths and weaknesses (updated for the information
available from stock exchange).
Detailed description of the key rating drivers
Key Rating Weaknesses
* Non redemption of NCD on due date: Company couldn't redeem the
NCDs which fell for redemption on June 30, 2020. Though the due
date for repayments has been deferred by investors each year from
June 30, 2017 to June 30, 2020, the same could not be redeemed due
to the project not taking off as expected, resulting in poor
liquidity issues and the debenture trustees have taken the
possession of the project land given as security for debenture
issued under Securitization and Reconstruction of Financial Assets
and Enforcement of Security Act 2002 (SARFAESI Act).
Key Rating Strengths
* Experienced Promoters: The Sterling group, promoted by Mr. Ramani
Sastri and Mr. Shankar Sastri, has presence in the Bangalore real
estate market since 1983 and has an experience in developing
apartments, villas and commercial complexes across Bangalore. The
Sterling developers group till date has developed over 30 projects
in total.
SGCPL is a special purpose vehicle (SPV) formed by Mr. Ramani
Sastri and Mr. Shankar Sastri, who have more than 30 years of
experience in developing real estate projects in Bangalore and
founders of the Sterling group. SGPCL plans to develop a real
estate apartment project in Whitefield, Bangalore. The project has
seen inordinate delays and is not yet launched due to unfavorable
market conditions for luxury segment projects.
SUNILHITECH SOLAR: CARE Lowers Rating on INR20.98cr Loan to B+
--------------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
Sunilhitech Solar (Dhule) Private Limited (SSPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 20.98 CARE B+; Stable; ISSUER NOT
Facilities COOPERATING; Revised from
CARE BB-; Stable and moved to
ISSUER NOT COOPERATING category
Detailed Rationale & Key Rating Drivers
CARE has been seeking information and monthly No Default Statements
(NDS) from SSPL to monitor the rating(s) vide e-mail communications
dated December 31, 2020, October 12, 2020 and letter dated January
11, 2021, among others and numerous phone calls. However, despite
CARE's repeated requests, the firm has not provided the requisite
information for monitoring the ratings. In line with the extant
SEBI guidelines, CARE has reviewed the rating on the basis of the
best available information which however, in CARE's opinion is not
sufficient to arrive at a fair rating. The rating on SSPL's bank
facilities will now be denoted as CARE B+; Stable; ISSUER NOT
COOPERATING.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Detailed description of the key rating drivers
The ratings have been revised on account of non-availability of any
latest financial as well as operational information and also no
information regarding the impact of nationwide lock-down post
outbreak of Pandemic, COVID-19, on the business and operations of
the company.
At the time of last rating on February 27, 2020 the following were
the rating strengths and weaknesses (updated for the information
available in public domain):
Key Rating Weaknesses
* Promoter Company in NCLT for Liquidation: Sunil HiTech Engineers
Ltd (SHEL) which has 100% shareholding in Sunilhitech Solar (Dhule)
Private Limited is currently into liquidation process (started in
June 2019) after the bank loans sanctioned and disbursed to it
turned into Non Performing Asset (NPA). Due to non-receipt of any
resolution plans until the expiry of 270th day of the Corporate
Insolvency Resolution Process, the Resolution Professional had
filed an application for liquidation of the Corporate Debtor in
accordance with section 33 of the Insolvency and Bankruptcy Code,
2016.
* Breach of Covenants on account of Non maintenance of Debt Service
Reserve Account (DSRA): As per the sanction letter, the borrower
shall build up a DSRA equivalent to two quarter debt service
obligation (principal plus interest). Earlier the parent company
SHEL had utilized its Bank Guarantee limit (two BGs of INR1.60
crore and INR0.48 crore each) in favour of SHDPL to maintain DSRA.
The amount in the DSRA was to be utilized only in case of shortfall
in cash flows for meeting debt service requirements from time to
time. However, the bank guarantee amounting to INR1.60 crore was
not renewed by the issuing bank as SHEL went into the liquidation
process in NCLT. The other BG was invoked by the lender bank.
However, the liability to repay the invoked BG rests with SHEL. The
company has to maintain DSRA for two quarters of interest and
principal payment amounting to INR1.90 crore. Currently (January
2021), DSRA is non-complied and the company has maintained only
INR0.03 crore of reserve.
* Deterioration in financial profile and debt service coverage
indicators: The financial profile of the company declined on
account of lower generation of power in FY19 vis-à-vis that in
FY18. The Total Operating Income during FY19 reduced to 4.15 crore
as against INR4.43 crore in FY18. Following the same, the PBILDT
Margin also declined to 76.49% as against 81.15% in FY18. Further,
the leverage ratios slightly deteriorated with overall gearing
increasing to 2.10x in FY19 from 2.06x in FY18 due to erosion of
Net Worth on account of book losses. The PBILDT interest coverage
ratio declined and stood at 1.16x times (1.69x times for FY18) due
to increased finance cost and penal charges for non-maintenance of
DSRA. Also, the TDGCA deteriorated to 35.70x in FY19 from 19.27x in
FY18 on account of lower GCA due to book losses registered.
However, the company has revised the O&M contract with Vag
Buildtech Private Limited at a reduced cost with effect from
October 1, 2019 at annual escalation clause of 2.5% which is likely
to help improve the debt coverage indicators.
* Technological risk: Achievement of envisaged CUF is subject to
changes in climatic conditions, amount of degradation of modules as
well as other technological risks. The company has considered the
use of crystalline silicon photovoltaic technology which is widely
used having 70% market share globally. Although the modules and
other equipment have been sourced from reputed suppliers,
technological risks persist for the project duration.
* Dependence on weather conditions (sunlight) for power generation:
The generation of power from solar thermal technology will depend
on weather conditions and solar radiance (i.e. availability of
sufficient sunlight) which is a natural and an uncontrollable
factor. However, the project is located in Karajagi, Akkalkot,
Solapur District where there is abundant sunlight available
throughout the year with low rainfall.
Key Rating Strengths
* PPA with SECI (Solar Energy Corporation of India Ltd.) for entire
capacity and providing long term revenue visibility: The company
has signed a PPA with SECI (rated ICRA AA+; Stable (Positive)/ A1+,
January 29, 2020) for sale of power from the 5MW solar power plant
under Jawaharlal Nehru National Solar Mission (JNNSM) scheme of
Government. The tariff is fixed for the period of 25 years. This
long term PPA provides revenue visibility thereby reducing revenue
risk to a larger extent.
* Viability Gap Funding (VGF) payable by SECI: The company entered
into a VGF Securitization Agreement with SECI for creating a charge
on the project assets based on which the company was granted VGF
support amounting to INR6.75 crore as per the terms of the VGF
Securitization Agreement. The VGF instalments are payable by SECI
in 5 years with 1st instalment of 50% of VGF support which was
received in October 2015 and thereafter 10% of the VGF support
every year. As on January 31, 2020, the company has already
received INR5.40 crore from SECI against VGF support.
* Moderate Operational performance: SHDPL has been operational
since July 2015 and achieved an average PLF of 18.85% (8.25 million
units) for FY17, 18.54% (8.12 million units) for FY18 and 17.37%
(7.61 million units) for FY19. Power is evacuated at 132/33 KV
Karajagi Substation of State Utility i.e. Maharashtra State
Electricity Transmission Company Ltd (MSETCL)/Maharashtra State
Electricity Distribution Company Limited (MSEDCL) which is located
at Karajagi, Akalkot Taluka, Solapur about 1.5 Kms from the plant
site. Further, the company has been receiving timely payments with
a realization time of 60-65 days from the date of bill invoicing.
This is mainly on account of the strong credit profile of the
off-taker.
Incorporated in 2014, SHDPL is a 100% subsidiary of Sunil
HiTechEngineers Ltd (SHEL). SHDPL was setup in 2014 by SHEL to
implement suitable solar power generation projects. Solar Energy
Corporation of India (SECI) (rated ICRA AA+; Stable/ICRA A1+,
January 29, 2020), a central government SPV had invited bids to
implement solar power projects for a total quantum of 750 MW out of
which SHDPL was successfully awarded with a 5MW project under the
Jawaharlal Nehru National Solar Mission (JNNSM) scheme. SHDPL won
the bid at a Viability gap funding (VGF) of INR6.75 crore or
INR1.35 crore per MW. The company achieved COD on July 17, 2015 and
has entered into a power purchase agreement (PPA) for 25 years with
SECI for purchase and sale of contracted capacity (CUF) of minimum
7.014 million kwh (MU) and maximum 9.077 million kwh (MU).
UNITED MACHINERY: CARE Cuts Rating on INR3.0cr Loan to B-
---------------------------------------------------------
CARE Ratings revised the ratings on certain bank facilities of
United Machinery & Appliances (UMA), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 3.00 CARE B-; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category and
Revised from CARE B; Stable
Short Term Bank 2.00 CARE A4; ISSUER NOT COOPERATING
Facilities Rating continues to remain
Under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE has been seeking information from UMA to monitor the ratings
vide e-mail communications/letters dated January 4, 2021, January
5, 2021, January 18, 2021 and numerous phone calls. However,
despite our repeated requests, the Entity has not provided the
requisite information for monitoring the ratings. In line with the
extant SEBI guidelines, CARE has reviewed the rating on the basis
of the publicly available information which, however, in CARE's
opinion is not sufficient to arrive at a fair rating. The rating on
UMA's bank facilities will now be denoted as CARE B-; Stable;
Issuer Not Cooperating/CARE A4; Issuer Not Cooperating. Further,
the banker could not be contacted.
Users of these ratings (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above ratings.
Detailed description of the key rating drivers
* Partnership nature of constitution: UMA, being a partnership
firm, is exposed to inherent risk of the partner's capital being
withdrawn at time of personal contingency and firm being dissolved
upon the death/retirement/insolvency of the partners. Moreover,
partnership firms have restricted access to external borrowing as
credit worthiness of partners would be the key factors affecting
credit decision for the lenders.
* Small scale of operation: The scale of operations remained small
as compared to its peers with a PAT of INR0.07 crore on total
operating income of INR16.04 crore during FY17. The profit margin
of the firm remained moderate marked by operating margin of 8.35%
and PAT margin of 0.44% in FY17. Furthermore, the total capital
employed was also low at INR8.22 crore as on Mar.31, 2017. The
small size restricts the financial flexibility of the firm in times
of stress and it suffers on account of economies of scale.
* Working capital intensive nature of business: UMA's business is
working capital intensive in nature as reflected by high average
collection period and high average inventory period. The inventory
period remained high at around 80 days during FY17. Further the
firm maintains adequate level of raw material inventory to mitigate
the fluctuation in raw material prices for executing the orders in
hand and finished goods for meeting the urgent demand. Furthermore,
the average collection period of the firm also remained high due to
its low bargaining power owing to its small size. Accordingly, the
working capital limit utilization remained high at around 95%
during last twelve months ending August 31, 2018.
* Volatility in raw material and finished goods prices: The
finished goods as well as raw material prices for manufacturing DG
sets are highly volatile in nature. Since the raw material (i.e.
iron & steel products, copper, brass, aluminium, engines and other
alternative components, etc.) cost is the major cost driver and any
southward movement of finished goods price with no decline in raw
material price is likely to impact the profitability margin.
* Highly competitive & fragmented nature of industry: The industry
is riddled with high competition due to presence of several
domestic and international players. Intense competition from both
domestic and international players is having a negative impact on
the profitability of the firm. Further, the tender concept employed
by public sector organization to source the materials, the firm has
to bid aggressively in order to ward away competition and win
contracts.
Key Rating Strengths
* Long & established track record and vast experience of partners
in manufacturing DG sets: Commenced operation in 1958, the firm has
a long track record of more than five decades in manufacturing DG
sets. The firm is headed by Shri Pradip Bose (aged 60 years) and
Shri Arijit Bose (aged 32 years), partners, having an experience of
around 37 years and 12 years respectively in the business of
manufacturing DG sets. Both of them together look after the overall
day-to-day activities of the firm, with active support from team of
experienced professional.
* Powered by leading brand of engines "Perkins & Greaves": UMA's DG
sets are available in the range from 10 KVA to 2500 KVA and are
powered by reputed and established engine brand "Perkins &
Greaves". For over 80 years Perkins has remained a leader in its
product range through advanced designs and manufacturing of highly
reliable Diesel engines. The continuous development study has
culminated in Perkins offering the most advanced & comprehensive
range of efficient Diesel & Gas engines. Perkins has its
manufacturing plants in the UK, US, Brazil, China and India,
together producing up to 800,000 engines a year.
United Machinery & Appliances (UMA) was set up as a partnership
firm in 1958 by Bose family of Kolkata, West Bengal with the
objective of starting a business in manufacturing of Diesel
Generator (DG) Set. The firm started with the dealership of DG sets
in Kolkata to cater to the customer in electrical power segment.
With time, UMA had expanded its business and started its own
factory for manufacturing of DG sets. The firm is currently engaged
in manufacturing of diesel generating set and also some spare parts
related to DG sets. UMA Product portfolio includes diesel
generating set, industrial engine & spares, casting enclosures for
DG sets, trailer, controller, spares, sound grip, etc. The
manufacturing facility of the firm is located in Village Sanjua,
Bakrahat, West Bengal and is equipped with installed capacity of
600 DG sets per annum. The facility is ISO: 9001:2000 & 14001:2004
certified from Bureau Veritas. The firm exports about 8-10% of its
manufactured product to overseas market in Bangladesh.
UNIVERSAL STAINLESS: CARE Assigns B Rating to INR0.77cr Loan
------------------------------------------------------------
CARE Ratings has assigned rating to the bank facilities of
Universal Stainless (UNS), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 0.77 CARE B; Stable Assigned
Facilities
Long Term Bank 1.60 CARE B; Stable Reaffirmed
Facilities
Long Term/Short 4.50 CARE B; Stable/CARE A4
Term Bank Revised from CARE B; Stable
Facilities
Short Term Bank
Facilities 2.25 CARE A4 Reaffirmed
Detailed Rationale & Key Rating Drivers
The ratings assigned to the bank facilities of UNS continue to
remain constrained mainly on account of its small scale of
operations and thin profitability during FY20 (Audited: FY; refers
to the period April 1 to March 31), leveraged capital structure,
moderate debt coverage indicators coupled with stretched liquidity.
The ratings also factored in its presence in highly competitive
steel industry along with susceptibility of margins to volatility
in prices in raw material as well as foreign exchange fluctuation
and its partnership nature of constitution. However, the ratings
derive strength from experienced promoters.
Rating Sensitivities
Positive Factors
* Increase in scale of operations marked by increase in total
operating income by more than 30% on a sustained basis with
sustaining PBILDT margin of more than 10%
* Improvement in capital structure marked by overall gearing of
below 2 times
* Increasing and Sustaining positive cashflow from operation
Negative Factors
* Deterioration in the cash flow from operations on back of higher
blockage of funds in inventory and debtors putting pressure on
liquidity
* Increase in price of steel by 5% putting pressure on
profitability
* Any major debt funded capex putting pressure on capital
structure, profitability and liquidity
Detailed description of the key rating drivers
Key Rating Weaknesses
* Small scale of operations along with thin profitability: During
FY20, UNS has registered a marginal growth in its scale of
operations by 2.75% but continue to remain small at INR22.23crore
as against INR21.64crore during FY19(A). However, in absolute terms
profitability decreased over previous year and remained thin marked
by PBILDT and PAT of INR2.15 crore and INR0.43 crore in FY20 as
against INR2.30 and INR0.67 crore in FY19. As a consequence of
decrease in PAT level coupled with decrease in depreciation cost,
the gross cash accruals have decreased during FY20 over FY19 and
remained modest at INR1.30crore against INR1.64crore in FY19.
* Leveraged capital structure and moderate debt coverage
indicators: As on March 31, 2020, capital structure of UNS although
improved mainly because of decrease in total debt on back of
gradual repayment of term debt coupled with increase in tangible
net worth base as a result of accretion of profit to reserves, but
continue to remain leveraged marked by an overall gearing ratio of
2.68 times as against 5.34 times as on March 31, 2019. On back of
decrease in profitability during the year, debt coverage indicators
have marginally deteriorated but continue to remain moderate marked
by total debt to gross cash accruals of 7.56 times as on March 31,
2020 as against 6.58 times as on March 31, 2019. Further, interest
coverage also remained moderate at 2.52times during FY20 as against
3.49 times during FY19.
* Presence in highly fragmented and competitive industry: UNS
operates in a competitive steel industry which has low entry
barriers, high fragmentation and presence of a large number of
players in the organized and unorganized sector; which translates
into inherently thin profitability.
* Susceptibility of margins to volatility in prices in raw material
as well as foreign exchange fluctuation: The profitability of UNS
is exposed to fluctuations in raw material prices i.e steel, the
prices of the same are volatile in nature. As UNS imported part of
its required material without using any active hedging policy, it
is exposed to risk associated with fluctuation in foreign exchange
rates. Hence any adverse movement in material prices and foreign
exchange rates would affect profitability of UNS. Moreover, there
is foreign exchange gain of INR0.02crore during FY20 as against
INRforeign exchange gain of INR0.18crore during FY19.
* Partnership nature of constitution: Being a partnership firm, UNS
is exposed to inherent risk of partners' capital being withdrawn at
time of personal contingency, and firm being dissolved upon the
death/retirement/insolvency of partners. However, there is infusion
of capital of INR1.20 during FY20 against capital withdrawal of
INR1.37crore during FY19.
Key Rating Strengths
* Experienced partners: Mr. Jasmin Patel and Mr. Chintankumar Patel
are key partners of UNS, who possess more than 7 years of
experience various industries i.e. construction and trading.
Liquidity analysis:
* Stretched liquidity: Liquidity remained stretched marked by low
cushion of its cash accruals against its debt repayment obligation,
low cash flow from operations, high utilization of its working
capital limit and low cash and bank balance on hand; thus limiting
financial flexibility of the firm. During FY20 GCA of firm remained
low at INR1.30crore against its repayment obligations of
INR0.70crore for FY21. Further, cash flows from operating activity
have decreased due to increase in blockage of funds in inventory
but continue to remain positive at INR1.49crore in FY20 as against
positive CFO of INR1.92crore in FY19. Furthermore, the average
utilization of its working capital limits also remained high at 90%
for past 12-months ended December, 2020. Moreover, UNS had availed
moratorium benefit on Term Loan and Cash credit limit from bank for
6 months ending August, 2020. However, cash and bank balance has
improved but remained low at INR1.07crore as on March 31, 2020 as
against INR0.32crore as on March 31, 2019. Further, operating cycle
improved but continued to remain elongated at 79 days in FY20
against 88 days in FY19.
Ahmedabad (Gujarat)-based Universal Stainless (UNS) was established
as partnership firm as Universal Stainless Suppliers in January
2015 by Mr. Jasmin J Patel, Mr. Avtar R Patel and Mr. Bharatkumar M
Patel. During April 2015, Mr. Avtar R Patel withdrew his
partnership and another four partners entered as partners. During
April 2016 the name of the firm was changed to Universal Stainless
from Universal Stainless Suppliers. UNS operates from its sole
manufacturing unit located Harsol (Sabarkantha, Gujarat) with
installed capacity of 1,480 metric tonnes per annum (MTPA) as on
March 31, 2020 for manufacturing of Stainless Steel Seamless and
Welded Tubes & Pipes.
VIKRAM INFRASTRUCTURE: Ind-Ra Cuts LongTerm Issuer Rating to 'D'
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Vikram
Infrastructure Company's (VIC) Long-Term Issuer Rating to 'IND D'
from 'IND B (ISSUER NOT COOPERATING)'.
The instrument-wise rating actions are:
-- INR150 mil. Fund-based working capital limits (long term)
downgraded with IND D rating; and
-- INR100 mil. Non-fund-based working capital limits (short
term) downgraded with IND D rating.
KEY RATING DRIVERS
The downgrade reflects VIC's delays in debt servicing for January
2021 due to its stretched liquidity position, resulting from
delayed receivables.
RATING SENSITIVITIES
Positive: Timely debt servicing for three consecutive months could
be positive for the ratings.
COMPANY PROFILE
VIC is a partnership firm established in 1989 and is located in
Vapi (Gujarat). It has three main areas of business, namely
infrastructure (civil construction), mining, and ready-mix
concrete. VIC undertakes public works department projects for the
governments of Silvassa and Daman.
VIRUTCHAM MICROFINANCE: Ind-Ra Assigns BB+ Rating, Outlook Stable
-----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has assigned Virutcham
Microfinance Limited's (VML) 'IND BB+' with a Stable Outlook.
The detailed rating action is:
-- INR300 mil. Bank loans assigned with IND BB+/Stable rating.
KEY RATING DRIVERS
VML's rating reflects its small scale of operations and high
geographic concentration. The company's loan book fell to INR500.4
million at end-9MFY21 (FY20: INR608.2 million; FY19: INR516.7
million) due to COVID-19 led to a lack of disbursements. The
company loan book is skewed towards Tamil Nadu (accounted for 80%
of its asset under management (AUM) at end-9MFY21), followed by
Kerala (15%) and the rest by Puducherry (5%), exposing it to high
geographical concentration risk. However, the management has
informed the agency that it is looking to expand in neighboring
southern states. The agency believes that contiguous expansion is
better, as non-contiguous expansion may present operational and
control-related challenges.
The rating, however, is supported by VML's diversified funding
profile, as the company had equally sourced its loans from
non-banking finance companies (NBFCs) as well as banks at
end-9MFY21, demonstrating the company's funding flexibility. While
the company's cost of funds was high at around 14.5% at end-9MFY21,
the agency notes that the company is able to raise incremental
funds at 8%-10%, which would contribute to a further rise in
profitability. The company has also been able to renew or raise its
majority funding lines on a continual basis and source funding from
existing as well as new lenders.
The rating is also supported by VML's adequate capitalization
level, as the entity received an equity capital of INR80 million
from various investors over FY19-FY20. The same helped VML in
maintaining a comfortable capital adequacy ratio of 23.8% at
end-9MFY21 (FY20: 32.8%) and Tier-I capital at 20.9% (25.5%).
Resultantly, the company's moderate leverage (debt/equity) stood at
2.6x at end-9MFY21(FY20: 3.06x, FY19: 4.62x; FY18: 4.27x). Its
equity-to-assets ratio stood at 27% at end-9MFY21 (FY20: 24.1%) and
equity-to-AUM was 32.4% (FY20: 26.4%). The agency believes the
current capital level is adequate, given the funding situation and
the company's plans to log over 100% growth rate for FY22
maintaining balance sheet leverage at 5x.
Liquidity Indicator – Adequate: At end-9MFY21, the company
maintained a cumulative surplus of around 15% of its total assets
even after stressing the inflows in up to one-year bucket. The
company also had INR50 million of unutilized bank lines at January
2020. At end-9MFY21, VML had INR33.4 million of cash on balance
sheet (5% of total average assets; all of which are unencumbered).
Considering the company's unsecured nature of lending and high
geographic concentration risk, the agency views the company's
maintaining adequate liquidity buffers to be very crucial.
The rating also factors in VML's stable asset quality as gross
non-performing assets stood at 0.3% at end-9MFY21 (FY20: 0.2%;
FY19: 0.1%), which is similar to that of its peer entities with
comparable portfolio size in the microfinance segment. The
company's profitability was moderate with a return on average
assets at 2.76% at end-1HFY21 (FY20: 1.88%). However, the agency
believes a rise in the company's credit costs owing to delinquent
loans could exert pressure on profitability.
RATING SENSITIVITIES
Positive: A positive rating action could result from the company's
ability to raise significant capital, expand and diversify the
franchise, scale-up operations while maintaining stable asset
quality levels, modest funding diversification, and adequate
short-term liquidity.
Negative: Deterioration in the profitability and capital
impairment, arising from deterioration in asset quality (gross
non-performing assets rising over 5%), an inability to secure
planned equity infusions or adequate funding and refinance from
financial institutions, the leverage exceeding 5x, and the
inability to maintain adequate capital buffers could result in a
negative rating action.
COMPANY PROFILE
VML was incorporated as a NBFC on 8 July 2008 and converted into
NBFC-Microfinance Industry on June 6, 2014. VML started its
microfinance operations in November 2008. The company is primarily
engaged in providing microfinance services to women in the rural
areas of India who are enrolled as members and organized as joint
liability groups.
VL FARMS: CARE Keeps D Debt Rating in Not Cooperating Category
--------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of VL Farms
(VLF) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 6.37 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
Under ISSUER NOT COOPERATING
Category
Detailed Rationale & Key Rating Drivers
CARE had, vide its press release dated January 24, 2020, placed the
rating(s) of VLF under the 'issuer noncooperating' category as VL
Farms had failed to provide information for monitoring of the
rating. VL Farms continues to be non-cooperative despite repeated
requests for submission of information through e-mails, phone calls
and an email dated January 2020 to February 4, 2021. In line with
the extant SEBI guidelines, CARE has reviewed the rating on the
basis of the best available information which however, in CARE's
opinion is not sufficient to arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating.
Detailed description of the key rating drivers
At the time of last rating on January 24, 2020 the following were
the rating strengths and weaknesses:
Key Rating Weakness
* Ongoing delays in servicing debt obligations: The firm has
ongoing delays by over 30 days in working capital term loan
instalment repayments along with servicing of interest
obligations.
Telangana-based VL Farms (VLF) is a partnership firm established in
2007 by Mr. Malla Reddy and his wife Mrs. Shireesha Reddy. The firm
is engaged in layer poultry farming and wholesale trading of eggs.
The firm has existing installed capacity of 2,30,000 birds. The
firm sells its products, eggs, cull birds, and manure majorly to
customers in Andhra Pradesh, Telangana and Maharashtra. The firm
purchases inputs for feeding of birds like maize, soya, broken
rice, shell grit and minerals from local traders. The day to day
operations of the firm are managed by Mr. Malla Reddy.
VRV ENGINEERS: Insolvency Resolution Process Case Summary
---------------------------------------------------------
Debtor: V R V Engineers Private Limited
Door No. 4/889, (New No. 4/423)
3rd Main Road
Swaminathan Nagar
Kotivakkam
Chennai 600041
Tamil Nadu
Insolvency Commencement Date: January 29, 2021
Court: National Company Law Tribunal, DIvision Bench-1, Chennai
Estimated date of closure of
insolvency resolution process: July 28, 2021
Insolvency professional: Chandrasekhar Sagutoor
Interim Resolution
Professional: Chandrasekhar Sagutoor
No. 333/17, G5 & G6 Ground Floor
Salma Arcade Complex
Arcot Road, Trustpuram
Chennai 600024
E-mail: sagutoor@gmail.com
Last date for
submission of claims: February 26, 2021
===============
M A L A Y S I A
===============
AIRASIA GROUP: Proposes Incentive Scheme for Directors, Employees
-----------------------------------------------------------------
The Sun Daily reports that AirAsia Group Bhd (AAGB) has proposed to
establish and implement a long-term incentive scheme (LTIS) of up
to 10% of the issued shares of the company for eligible employees
and directors and its subsidiaries which consists of an employee
share option scheme (ESOS) and a share grant scheme (SGS).
In the event that any foreign laws, regulatory requirements and/or
administrative constraints prevent or restrict the ability of AAGB
to allow the eligible employees of overseas subsidiaries to
participate in the proposed LTIS, an alternative, such as a cash
settled performance-based scheme, may be made available to them,
the report relays.
According to Sun Daily, the proposed LTIS will be in force for six
years. It may be extended for up to four years immediately from the
expiry of the first six years at the discretion of the board. Any
extension of the proposed LTIS will not, in aggregate with the
initial term, exceed 10 years.
Sun Daily relates that the proceeds from the exercise of the ESOS
options will be used, among others, for the group's working capital
purposes, including but not limited to payment of trade and other
payables, employee costs, marketing and administrative expenses.
Such proceeds are expected to be utilised within a period of 12
months, as and when received throughout the duration of the
proposed LTIS.
"The proposed LTIS is intended to align the motivation of the
eligible persons to the corporate goals of the group and the
shareholders' interests, by allowing them to participate in the
scheme and benefit from the increase in the share price of the
company," AAGB said in a stock exchange filing, Sun Daily relays.
In addition, the exercise is intended to enable AAGB to pay
competitively in the market to attract the best talent to drive the
transformation of the company; retain and reward the eligible
persons based on their performance to create a high performance
culture; create a good balance between the various components of
the employee compensation scheme with the proposed LTIS driving the
long-term shareholder value creation.
Driven by its need to control cost over the next few years, the
exercise allows AAGB to compensate eligible persons through shares,
in lieu of their cash bonuses to some extent thereby saving cost in
the short term.
"The vesting conditions of the share options will ensure that the
eligible persons will stand to benefit only if the share price
reaches a certain threshold ensuring the shareholders' interests
are protected. The proposed LTIS will also ensure that the
leadership of all the AirAsia group companies strive towards
collaboration and creating synergies between the various lines of
businesses to maximise shareholder value," it said.
Sun Daily adds that the proposed LTIS is subject to approvals being
obtained from Bursa Malaysia Securities and shareholders of AAGB at
the an EGM to be convened.
The application to Bursa Securities is expected to be made within
one month and the exercise is expected to be implemented by the
second quarter of this year, the report notes.
About AirAsia
AirAsia Berhad provides low-cost air carrier service. The company
provides services on short-haul, point-to-point domestic and
international routes. AirAsia, headquartered in Malaysia, operates
from hubs in Malaysia, Thailand, Indonesia, Philippines and India.
As reported in the Troubled Company Reporter-Asia Pacific on July
9, 2020, auditor Ernst & Young said the carrier's ability to
continue as a going concern may be in "significant doubt." In a
statement to the Kuala Lumpur stock exchange, Ernst & Young said
AirAsia's current liabilities already exceeded its current assets
by MYR1.84 billion at the end of 2019, a year when it posted a
MYR283 million net loss, Bloomberg News disclosed. That was before
the coronavirus crisis, which has further hit the carrier's
financial performance and cash flow.
=================
S I N G A P O R E
=================
XIHE CAPITAL: Court Puts Subsidiaries Under Judicial Management
---------------------------------------------------------------
The High Court of Singapore entered an order on Feb. 10, 2021, to
place several Xihe Capital Pte Ltd subsidiaries under judicial
management.
The subsidiaries are:
- An Ding Shipping Pte Ltd;
- An Rong Shipping Pte Ltd;
- An Shun Shipping Pte Ltd;
- Da Hai Shipping Pte Ltd;
- Da Shun Shipping Pte Ltd; and
- Nan Fang Shipping Pte Ltd
A petition to place the companies under Judicial Management was
filed on October 20, 2020.
The Petitioner's solicitors are:
Wong Partnership LLP
21 Bukit Batok Crescent
#22-70 WCEGA Tower
Singapore 658065
=====================
S O U T H K O R E A
=====================
SSANGYONG MOTOR: Extends Plant Suspension Until Middle of This Week
-------------------------------------------------------------------
Yonhap News Agency reports that SsangYong Motor Co. said on Feb. 19
it will extend the suspension of its local plant until the middle
of this week due to a lack of parts from contractors.
SsangYong Motor already halted its plant in Pyeongtaek, 70
kilometers south of Seoul, on Dec. 24, Dec. 28, Feb. 3-5, Feb.
8-10, and Feb. 15-19 as its subcontractors refused to deliver parts
due to outstanding payments, Yonhap says.
The Pyeongtaek plant will be suspended from Feb. 22-24, the company
said in a regulatory filing.
According to Yonhap, SsangYong said it will continue negotiations
with subcontractors to resume the halted supply of auto
components.
It filed for court receivership on Dec. 21 after it failed to
obtain approval for the rollover of existing loans from its
creditors, Yonhap notes.
Yonhap says SsangYong received a two-month suspension of its
obligation to pay its debts as it aims to find a new investor
before the court-led restructuring begins on Feb. 28.
The debt payment grace period can be extended depending on the
court's decision, the report states.
Yonhap adds that SsangYong's Indian parent firm Mahindra & Mahindra
Ltd. is in the process of selling its controlling stake in the
Korean unit but reportedly faced difficulty in narrowing terms of
the deal with a potential buyer.
About Ssangyong Motor
Headquartered in Kyeonggi-Do, South Korea, Ssangyong Motor Co. Ltd.
engages in the manufacture and sale of automobiles. The Company
mainly manufactures and sells recreational vehicles (RVs), sports
utility vehicles (SUVs), multi-purpose vehicles (CDVs) and
passenger cars under the brand name of rexton sports, korando,
korando sports, korando turismo, tivoli, tivoli air and others. The
Company also provides automobile parts. The Company distributes its
products within domestic market and to overseas markets.
SsangYong Motor Co. on Dec. 21, 2020, filed for court receivership
as it struggles with snowballing debts amid the COVID-19 pandemic,
according to Yonhap News Agency. The decision comes after SsangYong
Motor, the South Korean unit of Indian carmaker Mahindra & Mahindra
Ltd., failed to pay KRW60 billion (US$54.8 million) worth of debts
to its three creditor banks.
The company received a three-month suspension of its obligation to
pay its debts, as it aims to find a new investor during the period
before the court-led restructuring begins on Feb. 28, Yonhap said.
*********
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 2021. 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
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TCR-AP subscription rate is US$775 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance
thereof are US$25 each. For subscription information, contact
Peter Chapman at 215-945-7000.
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