/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/160331.mbx T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Thursday, March 31, 2016, Vol. 19, No. 63 Headlines A U S T R A L I A ADORE TEA: First Creditors' Meeting Scheduled For April 7 AIRLINE ACADEMY: First Creditors' Meeting Scheduled For April 7 DICK SMITH: Set to Close All Stores by April 30 MEREDITH & MOORE: Placed Into Voluntary Administration ROYAL QUEENSLAND: First Creditors' Meeting Set For April 7 ST BARBARA: S&P Raises CCR to 'B'; Outlook Stable STEELE HOTELS: First Creditors' Meeting Set For April 8 WATERMARC RESTAURANT: First Creditors' Meeting Set For April 7 C H I N A AOXIN TIANLI: Sept. 19 NASDAQ Listing Compliance Deadline Set CHINA CERAMICS: Has Until Sept. 19 to Regain Listing Compliance GUANGZHOU R&F: Moody's to Retain Ba3 CFR on Consent Solicitation ORIENT PAPER: Gets Audit Opinion With Going Concern Qualification YINGDE GASES: Moody's Confirms B1 CFR; Outlook Negative YINGDE GASES: Fitch Cuts Long-Term Issuer Default Rating to 'B+' I N D I A ALPHA MARINE: ICRA Assigns B+ Rating to INR12cr Fund Based Loan ANNPOORNA OVERSEAS: ICRA Reaffirms B+ Rating on INR13cr Loan ARIHANT DREAM: ICRA Lowers Rating on INR14.90cr Loan to 'D' ASB PROJECTS: ICRA Reaffirms B+ Rating on INR12.5cr Term Loan BALDVA TEXTILES: ICRA Suspends 'B' Rating on INR8.9cr Loan BALE BABU: ICRA Reaffirms 'B' Rating on INR6.64cr Loan BHARAT CONSTRUCTIONS: CRISIL Assigns B Rating to INR65MM Loan BHUPINDER ALLOYS: ICRA Lowers Rating on INR7cr Loan to D BINDU FOOD: CRISIL Reaffirms 'D' Rating on INR50MM Cash Loan CEL PACKAGING: CRISIL Assigns 'B' Rating to INR30MM Cash Loan DARWIN PHARMA: ICRA Assigns 'B' Rating to INR10cr LT Loan E-SHOPPE: Ind-Ra Assigns 'IND B+' Long-Term Issuer Rating EARTHCON DEVELOPERS: ICRA Revises Rating on INR12cr Loan to B+ GOPAL KRISHNA: CRISIL Assigns B+ Rating to INR70MM Cash Loan GOPALAKRISHNA TEXTILE: CRISIL Suspends D Rating on INR97.5MM Loan GREENLAND PAPER: CRISIL Suspends B+ Rating on INR32.5MM Loan GROW WELL: ICRA Lowers Rating on INR240cr Loan to 'D' H B OIL: ICRA Suspends 'B' Rating on INR5.03cr Loan HINDUSTAN FIBRE: ICRA Assigns B- Rating on INR8.60cr Loan I.P. COMPLEX: CRISIL Reaffirms 'B' Rating on INR35MM Loan IG SOLAR: Weak Financial Strength Cues ICRA 'SP4D' Grading INDEPENDENT MINERAL: CRISIL Reaffirms B+ Rating on INR100MM Loan INDIA SOLAR: Weak Financial Strength Cues ICRA SP4D Grading INDORE TABLE: Ind-Ra Assigns 'IND B' Rating to INR72.2MM Loan JIA AUTO: ICRA Lowers Rating on INR17cr Cash Loan to 'C' KAMAKSHI COTTON: CRISIL Cuts Rating on INR82.5MM Loan to 'D' KAMAL PRESSING: CRISIL Reaffirms B- Rating on INR50MM Cash Loan KAVERI GINNING: ICRA Suspends B+ Rating on INR13.28cr Loan KEAUM ORGANICS: CRISIL Lowers Rating on INR41.7MM Loan to 'D' LAXMI GRITS: ICRA Suspends B Rating on INR5.65cr Loan M.M. ISPAT: ICRA Assigns 'B' Rating to INR6cr Cash Loan MADHUCON AGRA: ICRA Reaffirms D Rating on INR230cr Term Loan MAINI CONSTRUCTION: Ind-Ra Assigns 'IND BB-' LT Issuer Rating MANILA RESORTS: ICRA Suspends 'D' Rating on INR6cr Loan MULTIDESIGNS INFRAWORKS: CRISIL Suspends D Rating on INR55MM Loan NIRMALA RICE: CRISIL Assigns 'B' Rating to INR35MM Cash Loan OMEGA NATURAL: Weak Financial Strength Cues ICRA SP 3D Grading PARASMAL PAGARIYA: CRISIL Reaffirms B+ Rating on INR60MM Loan POWER SPINNING: CRISIL Reaffirms B+ Rating on INR110MM Loan PRAFFUL EXPORTS: Ind-Ra Assigns 'IND B' Long-Term Issuer Rating RAFFLES GREEN: CRISIL Cuts Rating on INR49.5MM Term Loan to 'C' RAHUL TEXO: ICRA Reaffirms B+ Rating on INR5.80cr LT Loan RANGPUR TEA: CRISIL Assigns B- Rating to INR95.5MM Term Loan ROYAL INFRASTRUCTURE: Ind-Ra Assigns 'IND BB-' LT Issuer Rating SAHASRALINGESHWARA POWER: ICRA Reaffirms B Rating on INR64cr Loan SAHYADRI HEALTHCARE: CRISIL Reaffirms B+ Rating on INR105MM Loan SAMALESWARI EDUCATION: CRISIL Reaffirms B- Rating on INR98MM Loan SANDHYA POULTRY: CRISIL Assigns 'B' Rating to INR104.5MM Loan SHIVAM PIPE: ICRA Assigns B- Rating to INR5.5cr Cash Loan SHREE ASHAPURA: CRISIL Suspends C Rating on INR50MM Cash Loan SHREE COTEX: ICRA Reaffirms B Rating on INR7cr Cash Loan SHREE RENUKA: ICRA Lowers Rating on INR2,949cr Loan to 'D' SHRI BANKE: ICRA Assigns B- Rating to INR5.0cr Cash Loan SNQS INTERNATIONAL: ICRA Reaffirms B+ Rating on INR5cr LT Loan SOHAM MANNAPITLU: ICRA Reaffirms B+ (SO) Rating on INR54.4cr Loan SOHAM PHALGUNI: ICRA Reaffirms 'B' Rating on INR35.23cr Loan SOHAM RENEWABLE: ICRA Reaffirms 'B' Rating on INR38.7cr Loan SRI RAMA: CRISIL Suspends B+ Rating on INR129MM LT Loan SRI VYJAYANTHI: CRISIL Suspends 'D' Rating on INR25MM Term Loan SYSTEM CONTROL: ICRA Assigns B+ Rating to INR3.75cr Cash Loan T. ASOKAN: CRISIL Reaffirms B+ Rating on INR50MM Cash Loan TANEJA VIDYUT: ICRA Lowers Rating on INR3.5cr Loan to B+ TIRUPATI IRON: CRISIL Lowers Rating on INR65MM Loan to B+ URJA TECH: CRISIL Reaffirms B Rating on INR160MM Cash Loan VISHWAS COTTON: ICRA Assigns 'B' Rating to INR5.0cr Cash Loan VISUELL CREATIONS: ICRA Suspends B- Rating on INR5cr Loan WEST INDIA: Ind-Ra Assigns 'IND BB+' Long-Term Issuer Rating YKM ENTERTAINMENT: Ind-Ra Affirms 'IND B' Long-Term Issuer Rating Z. F. FILAMENTS: CRISIL Assigns B- Rating to INR41.3MM Term Loan J A P A N TAKATA CORP: Estimates Worst-case Recall Costs at $24 Billion S O U T H K O R E A HYUNDAI MERCHANT: Gets Debt Extension From Creditors V I E T N A M VIET NAM OIL: Biofuel Factory Halts Operations Due to Losses - - - - - ================= A U S T R A L I A ================= ADORE TEA: First Creditors' Meeting Scheduled For April 7 --------------------------------------------------------- Simon Thorn and Bradley Tonks of PKF were appointed as administrators of Adore Tea Australia Pty Ltd on March 29, 2016. A first meeting of the creditors of the Company will be held at PKF, Level 7, 28 University Avenue, in Canberra City, on April 7, 2016, at 12:00 p.m. AIRLINE ACADEMY: First Creditors' Meeting Scheduled For April 7 --------------------------------------------------------------- Nigel Robert Markey -- nmarkey@pilotpartners.com.au -- and Ann Fordyce -- afordyce@pilotpartners.com.au -- of Pilot Partners were appointed as administrators of Airline Academy of Australia Pty Ltd on March 24, 2016. A first meeting of the creditors of the Company will be held at Classroom 1, Administration Building, Archerfield Aerodrome, in Archerfield, Queensland, on April 7, 2016, at 11:00 a.m. DICK SMITH: Set to Close All Stores by April 30 ----------------------------------------------- Broede Carmody at SmartCompany reports that all Dick Smith stores will close their doors for the final time next month, as the collapsed electronics chain enters the final stages of its nation-wide fire sale. According to SmartCompany, Dick Smith receivers Ferrier Hodgson told staff on March 30 that 22 stores will shut down on April 16. The stores include stores in suburban Sydney, as well as regional areas such as Wollongong in New South Wales and Sale and Mildura in Victoria. Seven stores in New Zealand will close their doors on April 9, the report adds. SmartCompany relates that Ferrier Hodgson said all remaining Dick Smith stores are expected to close by April 30, however, this is an indicative date only. All affected employees will be given a formal notice of termination once the exact closure date for their store is finalized, the report says. In a statement, receiver James Stewart thanked Dick Smith employees for their patience during the controlled closure process, relates SmartCompany. "This is a difficult and uncertain time for them and we have really appreciated their commitment," Mr. Stewart, as cited by SmartCompany, said. About Dick Smith Dick Smith Holdings Limited Ltd (ASX:DSH) -- http://dicksmithholdings.com.au/-- is a retailer of consumer electronics products. The Company sells a range of products across four categories: office, mobility, entertainment, and other products and services. The Company has two segments: Dick Smith Australia and Dick Smith New Zealand. The Company connects with its customers through four physical store formats, catering for three distinct consumer demographics: Dick Smith, MOVE, David Jones Electronics Powered by Dick Smith and MOVE by Dick Smith Sydney International Airport. The Company's store network consists of approximately 393 stores across Australia and New Zealand, which include approximately 351 Dick Smith stores, approximately 10 MOVE stores, approximately four MOVE by Dick Smith stores and approximately 28 David Jones Electronics Powered by Dick Smith stores. As reported in the Troubled Company Reporter-Asia Pacific on Jan. 6, 2016, Dick Smith Holdings Ltd was placed in receivership on Jan. 5 following the appointment of Voluntary Administrators. Ferrier Hodgson partners Mr James Stewart, Mr Jim Sarantinos and Mr Ryan Eagle were appointed Receivers and Managers over DSH and an number of associated entities. The appointment was made by a syndicate of lenders which hold security over the group. MEREDITH & MOORE: Placed Into Voluntary Administration ------------------------------------------------------ Broede Carmody at SmartCompany reports that a women's clothing business with 19 retail stores across Australia and New Zealand has collapsed into voluntary administration but is continuing to trade. Meredith & Moore was founded in 1962 under the name Meredith and specialises in women's knitwear, jackets and coats. The Melbourne-based brand operates 17 stores across Australia, with stores in New Zealand. The brand's operating company, Meredith Australia Pty Ltd, appointed external managers on March 29. A related company Meredith Clothing Group Pty Ltd is also under external management, SmartCompany says. Daniel Walley, Allan Walker and Nicholas Martin from PPB Advisory are acting as joint voluntary administrators for both companies, SmartCompany discloses. A creditors' meeting is scheduled to be held on April 6 in Melbourne. Mr. Walley told SmartCompany that the Meredith & Moore stores are continuing to trade. "The initial strategy is to keep it open at the moment while we seek a purchaser for the business," SmartCompany quotes Mr. Walley as saying. "We're interesting in talking to any parties interested in picking up the brand or the stores." SmartCompany relates that Mr. Walley said the retailer ran into cashflow problems following a turnaround process. ROYAL QUEENSLAND: First Creditors' Meeting Set For April 7 ---------------------------------------------------------- Nigel Robert Markey and Ann Fordyce of Pilot Partners were appointed as administrators of Royal Queensland Aero Club Limited on March 24, 2016. A first meeting of the creditors of the Company will be held at Classroom 1, Administration Building, Archerfield Aerodrome, in Archerfield, Queensland, on April 7, 2016, at 11:00 a.m. ST BARBARA: S&P Raises CCR to 'B'; Outlook Stable ------------------------------------------------- Standard & Poor's Ratings Services said that it has raised its long-term corporate credit rating and senior secured debt rating on St Barbara Ltd. (SBM) to 'B' from 'B-'. The recovery rating remains unchanged at '3', reflecting S&P's view of average recovery prospects (50%-70%) in the event of a default. The outlook on the long-term rating is stable. "The upgrade reflects the improvement in the company's credit metrics, driven by increasing earnings from its Simberi mine and record production from its Gwalia mine," said Standard & Poor's credit analyst May Zhong. Simberi has developed a track record of generating positive operating cash flows since the second half of fiscal 2015. This, together with record production in Gwalia and a higher gold price (in Australian-dollar terms), have enabled the company to generate A$123 million of cash flows from its operating activities in the first half of fiscal 2016. More importantly, SBM has repaid A$159 million of its debt in the nine months to February 2016, ahead of its debt amortization schedule. S&P views the company's deleveraging effort as supportive to the rating. S&P expects that increased earnings, along with the reduction in debt, should materially improve SBM's financial risk profile in the year ending June 30, 2016. "We continue to view SBM's business risk profile as vulnerable, reflecting its smaller scale of operations (378,000 ounces of production in fiscal 2015) and relatively short mine life compared with peers globally. SBM is also exposed to volatile gold and foreign exchange rate movements. Further, SBM's Simberi operations in Papua New Guinea could increase the group's operating and country risks, notwithstanding the asset diversification benefits and growth potential. Nonetheless, we note that SBM's biggest earnings contributor, its Gwalia operations in Australia, has a relatively low cost profile. Gwalia's all-in sustaining costs (AISC) were A$765 per ounce (oz) for the half-year ended Dec. 31, 2015. On the other hand, Simberi's AISC was higher at A$1,285 per oz in the first half of 2016. SBM's portfolio now consists of the two mines, Gwalia and Simberi, following the sale of its underperforming Gold Ridge operation in fiscal 2015," S&P said. "The improving financial performance has underpinned our revised assessment of SBM's financial risk profile to significant, from highly leveraged. We expect the company's adjusted debt-to- EBITDA ratio to approach 1.5x in fiscal 2016, falling from 2.2x in fiscal 2015. The relatively stable gold prices, together with SBM's deleveraging, will likely boost the credit metrics. We understand that SBM plans to repay the remaining Red Kite debt by June 2016. However, we remain mindful that given SBM's asset concentration risk, the company's credit metrics could deteriorate materially if there were any operational issues at either of its two mining operations," S&P noted. SBM is exploring investment options on deep drilling Gwalia's gold deposits and extracting Simberi's sulphides ore, with the aim of extending Gwalia's (currently six years) and Simberi's mine lives (currently three years for oxide ore). Final investment decision has not yet been made. In S&P's view, if the company incurs large capital expenditure for these growth projects, it could weaken the currently strong free operating cash flows. However, without the investments, SBM's mine life is relatively short compared to its peers globally, resulting in S&P's negative assessment for SBM compared to its peers. Ms. Zhong added: "The stable outlook reflects our expectation that SBM's operations, namely its Gwalia and Simberi mines, will maintain steady performance. We forecast the company's debt to EBITDA will remain less than 2x in the next two years based on our price assumption of US$1,100 per oz for gold and the Australian dollar averaging US$0.68. We also expect the company to maintain adequate liquidity." S&P could lower the rating if SBM's credit metrics were to deteriorate, for example, if its debt to EBITDA approaches 3.5x. Given S&P's expectation of stable gold prices in the next two years, this downside scenario would likely occur if SBM faces any unforeseen major operational issues at its Simberi or Gwalia mines or it incurs substantial capital expenditure for its operations. Given SBM's scale and scope and the relatively short lives of its mines compared to global peers, S&P considers rating upside to be unlikely. STEELE HOTELS: First Creditors' Meeting Set For April 8 ------------------------------------------------------- Moira Kathleen Carter and Robert Humphreys of BRI Ferrier were appointed as administrators of Steele Hotels & Apartments Pty Ltd, trading as Itara & Jacana Apartments, on March 29, 2016. A first meeting of the creditors of the Company will be held at BRI Ferrier, Level 1, 19 Stanley Street, in Townsville, Queensland, on April 8, 2016, at 10:30 a.m. WATERMARC RESTAURANT: First Creditors' Meeting Set For April 7 -------------------------------------------------------------- Domenic Calabretta at Mackay Goodwin was appointed as administrator of Watermarc Restaurant Pty Ltd on March 24, 2016. A first meeting of the creditors of the Company will be held at Ammber Court, 18-20 Ashenden Street, in Shepparton, Victoria, on April 7, 2016, at 11:00 a.m. ========= C H I N A ========= AOXIN TIANLI: Sept. 19 NASDAQ Listing Compliance Deadline Set ------------------------------------------------------------- Aoxin Tianli Group, Inc., a producer of breeder hogs, market hogs and black hogs, as well as specialty processed black hog pork products sold through retail and the internet, on March 23 disclosed that it received a letter from NASDAQ (the "NASDAQ Notice"), granting the Company an additional 180-day period, or until September 19, 2016, to regain compliance with NASDAQ's minimum $1.00 bid price per share rule (the "Bid Price Rule") for continued listing on the NASDAQ Capital Market. The NASDAQ Notice, dated March 22, 2016, granted the Company an additional 180-day period, or until September 19, 2016, to regain compliance with NASDAQ's minimum $1.00 bid price per share rule for continued listing on the NASDAQ Capital Market. To regain compliance, the closing bid price of the Company's common shares must be at or above $1.00 per share for a minimum of 10 consecutive business days prior to September 19, 2016. About Aoxin Tianli Group, Inc. Aoxin Tianli Group, Inc. (NASDAQ: ABAC), previously known as Tianli Agritech, Inc., is in the business of breeding, raising and selling breeder and market hogs in China. The Company also sells specialty processed black hog pork products through supermarkets and other retail outlets, as well as the internet. The Company also owns an 88% equity interest in Hubei Hang-ao Servo-valve Manufacturing Technology Co., Ltd. ("Hang-ao"), which the Company acquired in July 2014 and currently is seeking to sell. CHINA CERAMICS: Has Until Sept. 19 to Regain Listing Compliance ------------------------------------------------------------- China Ceramics Co., Ltd., a Chinese manufacturer of ceramic tiles used for exterior siding and for interior flooring and design in residential and commercial buildings, on March 23 disclosed that its transfer application to list the Company's securities on The NASDAQ Capital Market has been approved, and that the Company's securities are currently being traded on The NASDAQ Capital Market, under the same trading symbol "CCCL". The NASDAQ Capital Market is a continuous trading market that operates in substantially the same manner as The NASDAQ Global Market. All companies whose securities are listed on The NASDAQ Capital Market must meet certain financial requirements and adhere to NASDAQ's corporate governance standards. In connection with the listing transfer to the NASDAQ Capital Market, the Company was granted an additional 180 days, or until September 19, 2016 (the "Compliance Date"), to regain compliance with the minimum bid price rule by maintaining a minimum closing bid price of at least $1.00 for ten consecutive business days. In connection with the transfer application and securing of the additional 180-day period to regain compliance, the Company's undertook to cure the deficiency during such additional compliance period by effecting a reverse stock split, if necessary. At its upcoming meeting of its stockholders, the Company intends to recommend for consideration and vote of its shareholders, among other things, a proposal to authorize a charter amendment to effect a reverse stock split of the Company's issued and outstanding common shares that may be implemented by the Company's Board at its discretion at any time prior to the Compliance Date to cure the minimum bid price deficiency, if necessary. If this proposal is approved by the Company's shareholders, the Board could approve and implement a reverse stock split that could allow the closing bid price of the Company's common shares on NASDAQ to be at least $1.00 per share for at least 10 consecutive business days prior to the Compliance Date, which would allow the Company to maintain the listing of its common shares on the NASDAQ Capital Market. If at any time before the Compliance Date, the closing bid price of the Company's common shares is at least $1.00 per share for the requisite period, the Company will regain compliance and the effecting of a reverse stock split may not be necessary. If the Company cannot demonstrate compliance by the Compliance Date or the Company does not comply with the terms of the extension granted by NASDAQ, the Company's common shares may then be subject to delisting. About China Ceramics Co., Ltd. China Ceramics Co., Ltd. (NASDAQ: CCCL) -- http://www.cceramics.com/-- is a manufacturer of ceramic tiles in China. The Company's ceramic tiles are used for exterior siding, interior flooring, and design in residential and commercial buildings. China Ceramics' products, sold under the "Hengda" or "HD", "Hengdeli" or "HDL", the "TOERTO" and "WULIQIAO" brands, and the "Pottery Capital of Tang Dynasty" brands, are available in over 2,000 style, color and size combinations and are distributed through a network of exclusive distributors as well as directly to large property developers. GUANGZHOU R&F: Moody's to Retain Ba3 CFR on Consent Solicitation ---------------------------------------------------------------- Moody's Investor Service says Guangzhou R&F Properties Co., Ltd.'s consent solicitation and technical breach are credit negative. However, there is no immediate impact on Guangzhou R&F's Ba3 corporate family rating, R&F Properties (HK) Company Limited's B1 corporate family rating, the B1 backed senior unsecured ratings assigned to the notes issued by Trillion Chance Limited and Caifu Holdings Limited, or on their stable outlook. On March 24, 2015, Guangzhou R&F announced that it is soliciting consent from its 2016, 2019, and 2020 noteholders for certain waivers, including for a technical breach to limitations on restricted payments, as well as to amend certain terms of the notes, such as the terms for debt incurrence, restricted payments, permitted investments and certain defined terms. "The technical breach, which resulted from the interim dividend payment in October 2015, is credit negative as it would increase the risk of acceleration in the repayment of the USD notes. The breach also suggests weak financial management and internal compliance controls," says Kaven Tsang, a Moody's Vice President and Senior Credit Officer. However, Moody's does not expect the breach to materially affect Guangzhou R&F's business fundamentals. Its operating performance has been improving, as evidenced by its moderately improved financial metrics, with revenue/adjusted debt rising to 47% at end-2015 from 40% at end-2014, and EBIT/interest to 2.3x in 2015 from 2.0x in 2014. Guangzhou R&F also had cash of around RMB21.3 billion as of December 2015. Additionally, it raised RMB9.6 billion from the domestic bond markets in 1Q 2016. Moody's expects Guangzhou R&F to obtain the required consent from the bondholders to pass the proposed waivers within the solicitation period. "The proposed amendments will allow Guangzhou R&F more flexibility in paying dividends and in incurring debt. However, we do not expect the company to aggressively change its financial and dividend policies to an extent that would materially affect its credit profile," adds Tsang. Any deviation from such expectation that results in a material deterioration in the company's liquidity, or an absence of further improvement in Guangzhou R&F's financial profile over the next 6-12 months, would result in negative rating action. The principal methodology used in these ratings was Homebuilding And Property Development Industry published in April 2015. Established in 1994 and listed on the Hong Kong Exchange in 2005, Guangzhou R&F Properties Co., Ltd. is a mid-sized developer in China's residential and commercial properties sector. As of Dec. 31, 2015, the company had a total land bank of 39.76 million sqm in 29 cities and areas -- 26 cities and areas in China, one in Malaysia and two in Australia. Mr. Li Sze Lim and Mr. Zhang Li are its co-founders and own 33.36% and 32.02% in equity interests, respectively. ORIENT PAPER: Gets Audit Opinion With Going Concern Qualification ------------------------------------------------------------- Orient Paper, Inc, a manufacturer and distributor of diversified paper products in North China, on March 29 disclosed that its independent registered public accounting firm included a going concern qualification in its audit opinion relating to the Company's audited consolidated financial statements for the fiscal year ended December 31, 2015, which were included in the Company's Annual Report on Form 10-K filed on March 23, 2016 with the Securities and Exchange Commission. This announcement is made pursuant to NYSE MKT LLC Company Guide Section 610(b), which requires a public announcement of the receipt of an audit opinion containing a going concern qualification. About Orient Paper, Inc. Orient Paper (NYSE MKT: ONP) -- http://www.orientpaperinc.com/-- is a paper manufacturer in North China. Using recycled paper as its primary raw material (with the exception of its digital photo paper and tissue paper products), Orient Paper produces and distributes three categories of paper products: corrugating medium paper, offset printing paper, and other paper products, including digital photo paper and tissue paper products. With its production based in Baoding and Xingtai, cities in Hebei Province in North China, Orient Paper is located strategically close to the Beijing and Tianjin region, home to a growing base of industrial and manufacturing activities and one of the largest markets for paper products in the country. Orient Paper's production facilities are controlled and operated by its wholly owned subsidiary Shengde Holdings Inc, which in turn controls and operates Baoding Shengde Paper Co., Ltd., and Hebei Baoding Orient Paper Milling Co., Ltd. Founded in 1996, Orient Paper has been listed on the NYSE MKT under the ticker symbol "ONP" since December 2009. YINGDE GASES: Moody's Confirms B1 CFR; Outlook Negative ------------------------------------------------------- Moody's Investors Service has confirmed Yingde Gases Group Co Ltd's B1 corporate family rating, as well as the B2 senior unsecured rating on the bonds issued by Yingde Gases Investment Limited and guaranteed by Yingde Gases. The ratings outlook is negative. This action concludes the ratings review initiated on Jan. 25, 2016. RATINGS RATIONALE "The ratings confirmation reflects our expectation that Yingde Gases can withstand the negative impact from the current very weak steel industry conditions in China," says Gerwin Ho, a Moody's Vice President and Senior Analyst. "The company improved its cash flow management in 2015, a trend we expect to continue this year and that supports its rating," adds Jiming Zou, a Moody's Vice President and Senior Analyst, as well as the Local Market Analyst for Yingde Gases. Yingde Gases has a high exposure to the steel industry, which accounted for 70% of its revenues in 2015. Moody's expects the company will continue to be affected by the negative impact from cash-strapped steel companies, as China (Aa3 negative) is removing excess and inefficient steel capacity. The company increased its allowances for doubtful debt to RMB377 million in 2015 from RMB233 million in 2014. The challenges the company faces can be illustrated by one of its major on-site clients, Hebei Jingye Steel and Iron Company Limited (unrated), taking over the operating rights of Yingde Gases' gas supply facilities in December 2015 without its consent. Trade receivables from this single client amounted to RMB86 million at end-2015. Despite the difficult operating environment, Yingde Gases reported some improvements in 2015: (1) its operating cash flow rose to RMB1.37 billion in 2015, up 48.5% from 2014; (2) it lowered its capital expenditures by 44.2% from 2014 to RMB 1,123 million in 2015; (3) it got back RMB400 million deposits from China Coal (unrated); and (4) demonstrated its ability to tap the domestic debt market by issuing RMB980 million 5-year bonds in October 2015. Moody's expects the company will continue these improvements, supporting its B1 corporate family rating. Yingde Gases' B1 corporate family rating reflects the company's: (1) strong position in China's on-site gas supply market, where it holds competitive advantages; and (2) good profitability and recurring cash flows, supported by its long-term contracts with on-site customers. Such contracts account for the majority of its revenues. On the other hand, the corporate family rating is constrained by: (1) the company's small revenues when compared with its international peers and high exposure to the weak domestic steel industry; (2) the challenges it faces in its receivables collections which weigh on its operating cash flow and liquidity position. The company's liquidity position is weak. As of end-December 2015, its cash and pledged deposits covered 55% of short-term debt. Moody's expects the company to raise debt to fund the part of the dividends and capital expenditures not covered by operating cash flow. Moody's expects the company to increase its borrowings in the next 12-18 months, and for its debt/EBITDA to rise to 3.8x-4.0x in 2016 from 3.7x in 2015. Such levels still support its B1 rating. The negative outlook reflects Moody's expectation that the company's financial profile will remain under pressure from the weak operating environment for its customers in the steel and chemical industries. A ratings upgrade is unlikely, given the negative outlook. However, the outlook could return to stable if Yingde Gases (1) demonstrates sustained growth its positive operating cash flow; (2) improves its liquidity profile, with cash to short-term debt of at least 1x; and (3) improves its accounts receivable collection, as reflected by reducing bad debt allowances and accounts receivable days on hand. The ratings would be downgraded if: (1) Yingde Gases' liquidity position or operating cash flow deteriorates further; (2) challenges in its accounts receivable collection escalates; or (3) its credit metrics weaken, such that adjusted debt/EBITDA rises above 4.5x. The principal methodology used in these ratings was Global Chemical Industry Rating Methodology published in December 2013. Yingde Gases Group Co Ltd is one of the largest players in the independent onsite industrial gas market in China, with RMB7.9 billion in revenues in 2015. As of end-2015, it had a total of 68 production facilities in operation and another 10 under development. Onsite gas production accounted for about 80%-90% of Yingde Gases' revenues, with the remainder from merchant sales. YINGDE GASES: Fitch Cuts Long-Term Issuer Default Rating to 'B+' ---------------------------------------------------------------- Fitch Ratings has downgraded Yingde Gases Group Company Limited's (Yingde) Long-Term Issuer Default Rating (IDR) to 'B+' from 'BB'. The Outlook is Stable. The agency has also downgraded the senior unsecured debt ratings of Yingde and Yingde Gases Investment Limited to 'B+' from 'BB'; with Recovery Rating of 'RR4'. A full list of rating actions is at the end of this commentary. The downgrade reflects the increase in Yingde's customer risk and weakening bargaining power, especially in the steel sector, where financial positions have deteriorated due to persistent industry weakness. The higher risks are evident in Yingde's recent announcement that it has lost control of its Pingshan Plant after the customer occupied it; its inability to collect payments fully from Shaanxi Longmen Iron and Steel Co., Ltd. since 2013; and steelmakers accounting for around 70% of Yingde's customers. Yingde's receivable days have lengthened and the proportion of delinquent receivables has remained large, which have led to deterioration in its leverage position. "The Stable Outlook reflects our expectation that its FFO- adjusted net leverage would remain at around 5.0x, which is commensurate with its current ratings. The Stable Outlook assumes there is no substantial increase in both its account receivable days and trade receivable delinquency rate; and Yingde will not lose control over its other assets." KEY RATING DRIVERS Sustained High Receivables Risk: Yingde's accounts receivable days rose to 103 days in 2015 from around 99 days in 9M15. However, its accounts payable days decreased to 37 days from around 52 days. This drove an increase in cash collection days to 73 days in 2015 (9M15: 52 days), which is above the level that would trigger Fitch to consider negative rating action. The deterioration in collection is partly mitigated by its bills receivable, which account for 31% of net accounts receivables and can be readily converted into cash at a discount. Meanwhile, the company's delinquent receivables increased by 10% yoy in 2015 to account for 59% of total net trade receivables. Yingde's bad debt provision jumped by 62% yoy to CNY377m. The company has not yet collected the overdue receivable in full from Shaanxi Longmen Steel even after filing lawsuits. In addition, Yingde said on 22 March that one of its plants that operates three on-site facilities was occupied by its client Hebei Jingye Steel and Iron Company Limited. This happened after Yingde planned to stop supplying gas to the client, which had not paid Yingde a substantial amount for its gas. Challenges for On-Site Business: Yingde's business model of focusing on on-site plants is exposed to rising uncertainties and challenges during the current sluggish operating environment. Normally, the on-site business has much lower exposure to economic cycles compared with the merchant segment because the former contains take-or-pay terms and exclusive contracts with very long periods. However, most of Yingde's on-site plants are running around the minimum take-or-pay level due to low utilisation by its clients. In 2015, revenue from the on-site business edged up 2.7% yoy to CNY6,886m compared to 10.9% yoy increase in 2014. Heavy Reliance on Steel: It is unlikely Yingde's operations will recover in the short term because around 70% of its customers are in the steel sector, which continues to be plagued with overcapacity, low utilisation rates and soft average selling prices. Fitch expects the industry to undergo major restructuring in the medium term, particularly the small and medium-sized companies, as China moves to reduce steel capacity and address the tight liquidity and high leverage of the industry. "Near-Term Deleveraging Not Likely: Fitch expects Yingde's 2015 FFO-adjusted net leverage to rise above 4.6x from 4.4x in 2014, breaching our negative trigger of 4.0x. In the near term, we expect its leverage to remain high at around 5x, mainly due to weakness in the steel and chemical sectors. Slower revenue growth and rising cash interest costs have resulted in smaller FFO, even though its operating EBITDA margin has been stable. The company has had to increase debt to fund its capex and common dividend payment." Negative Free Cash Flow: "We expect Yingde's free cash flow to remain negative due to the sluggish steel sector, even though it has reduced capex. The company's capex spending will be for diversifying its customer base to non-steel sectors, such as non- ferrous metal, glass, coal chemical and petrochemical. However, these sectors are also subject to overcapacity and weak demand in China. Yingde has been generating negative free cash flow over past few years due to its aggressive investments to add capacity, and the current weak operating environment means payback will take much longer than expected. Free cash flow is unlikely to turn positive until the company collects on its substantial accounts receivable." ========= I N D I A ========= ALPHA MARINE: ICRA Assigns B+ Rating to INR12cr Fund Based Loan --------------------------------------------------------------- ICRA has assigned a long-term rating of [ICRA]B+ to INR12.00 crore fund based facilities of Alpha Marine. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based limits 12.00 [ICRA]B+ assigned The assigned rating is constrained by project implementation risk with the firm yet to incur INR11.00 crore of the total project cost of INR19.99 crore; and significant funding risk with pending cost to be funded by INR4.00 crore of partner's capital and remaining INR7.00 crore from undrawn portion of term loan. The rating is further constrained by inherent risks associated with the sea food industry like susceptibility to disease, climate change risk, vulnerability to regulations proposed by importing nations and export benefits provided by the Indian government and the susceptibility of earnings to raw material prices and exchange rate volatility as well as risks of capital withdrawals that are inherent in a partnership firm. The rating, however positively factors in more than two decade of partner's experience in sea food industry and established relationships with farmers ensuring raw material availability to some extent. The ratings also consider advance stage of construction with ~80% of the civil work completed as on February 29, 2016 and expected commercial operation date (COD) of the project is from May 2016. Going forward, ability of the firm to execute the project without time and cost overrun and generation of sufficient cash accruals for term loan repayments by achieving sufficient capacity utilisation would be key rating sensitivities from credit perspective. Founded in 2015, as a partnership firm, Alpha Marine (AM) is into business of processing and export of cultured and sea caught shrimp. The firm is promoted and managed by Mr. Dudala Sudhakar, Mr. Anshuman Chand, Mr. K subba Rajendra Bhatt and D. Ankineedu Sudhakar. Each of the promoters have more than 20 years of experience in the shrimp processing and export business. The firm is setting up a shrimp processing unit with a capacity of 12 tons per day (TPD) at Nellore. ANNPOORNA OVERSEAS: ICRA Reaffirms B+ Rating on INR13cr Loan ------------------------------------------------------------ ICRA has reaffirmed its long-term rating of [ICRA]B+ on the INR13.00 crore fund-based bank facilities of Annpoorna Overseas. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit 13.00 [ICRA]B+; reaffirmed ICRA's rating continues to factor in the moderate scale of operations of the firm, which coupled with the low value additive nature of business and high intensity of competition in the rice milling industry, has resulted in low profitability and weak debt coverage indicators. The rating also takes into account the working capital intensive nature of rice milling business arising out of the need to maintain substantial inventories, in line with the industry trends. The funding of working capital requirements, primarily through bank borrowings has led to relatively high gearing for the firm. The rating is also constrained by agro- climatic risks, which can affect the availability of paddy in adverse conditions. However, the rating is supported by the firm's long track record of operations and the experience of the promoters in the rice industry, proximity of the mill to a major rice growing area, which results in easy availability of paddy and stable demand outlook with rice being an important part of the staple Indian diet. Going forward, the ability of the firm to scale up its revenues while maintaining adequate profitability, optimally manage its working capital cycle and maintain a prudent capital structure, will be the key rating sensitivities. Mr. Neeraj Batra and his brother established Annpoorna Overseas as a partnership firm in 2003. The partners and their family members have been involved in the rice milling business since 1968. The firm's plant located in Karnal (Haryana) has a milling capacity of ~15 metric tonnes per hour. Recent Results The firm reported a net profit of INR0.26 crore on an operating income of INR23.53 crore in FY2015 as against a net profit of INR0.26 crore on an operating income of INR41.67 crore in the previous year. ARIHANT DREAM: ICRA Lowers Rating on INR14.90cr Loan to 'D' ----------------------------------------------------------- ICRA has revised its long term rating on the INR14.90 crore long term bank facilities of Arihant Dream Infra Projects Ltd (AIDPL) to [ICRA] D from [ICRA] BB- (Stable). Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loans 14.90 [ICRA] D; Revised The rating revision is driven by delays in debt servicing of the bank sanctioned term loan. Going forward the ability of the company to resolve its operational problems and demonstrate a track record of timely debt servicing will be the key rating sensitivity. ADIPL is the flagship company of the group and was incorporated in May 2011. It is promoted by Mr. Rakesh Goel and Mrs. Reena Goel and is a closely held company by the Goel family. Apart from having real estate as his business, Mr. Rakesh Goel also has an established name as the leading trader of the TMT steel coke and pig iron in the entire Jaipur region. Mr. Goel has set up a business house in the name of Arihant Group of Companies, which has 20 years of track record in the real estate business and has established itself in commercial development, hospitality, food and property management in the Jaipur region. ASB PROJECTS: ICRA Reaffirms B+ Rating on INR12.5cr Term Loan ------------------------------------------------------------- ICRA has reaffirmed its long-term rating of [ICRA]B+ to the INR15.00 crore bank facilities of ASB Projects Pvt Ltd. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Bank Facilities Term loan 12.50 [ICRA]B+; reaffirmed Unallocated Bank facilities 2.50 [ICRA]B+; reaffirmed ICRA's ratings factor in the increased occupancy in the company's mall (up from 52% in FY14 to 62% in FY15), and satisfactory tenant profile which has resulted in better cash accruals in FY2015.The rating also takes comfort from the tie up for hotel operations with Marriott group which is expected to lend brand recognition and operational support. ICRA takes note of the delay in the commencement of operations in multiplex by a year, and will be operational from 1QFY17 onwards, given the completion certificate from the concerned authorities have been received. The rating however remains constrained by upcoming debt funded capex for hotel construction which is expected to exert pressure on ASB's coverage indicators pending the ramp up of cashflows from leasing and hotel business. The pending loan tie up and equity funding exposes the company to funding risks for this portion, though ICRA notes that promoters have been supported the company in the form of unsecured loans in the past. The rating further continues to remain constrained by market risks for the unleased portion given the weak market scenario. In ICRA's view, the ability of the company to improve its monthly lease rental income through leasing out of the vacant space in the property, commencement of operations by the multiplex as envisaged, will be the key rating monitorables. Further, the company's ability to fund and execute the hotel portion as planned will be a key rating sensitivity. Incorporated in 2005, ASB is a single asset company and is currently managing the operations of a mall-Ashok Cosmos Mall in Agra (Uttar Pradesh). This mall became operational in 2010 and has a covered area of 3.36 lakh sq ft. Currently, of the total area of 336,404 sq ft, 90,592 sq ft of area pertaining to shopping and office complexes has been leased to 6 tenants. The company is a part of the Ashok Group of Agra, which is present in diversified sectors spanning across auto dealerships, petroleum products dealership and hire-purchase, finance and leasing business. Recent results ASB reported a net profit of INR0.42 crore on an operating income of INR5.28 crore in FY 2015, as compared to a net profit of INR1.04 crore on an OI of INR4.18 crore in the previous year. BALDVA TEXTILES: ICRA Suspends 'B' Rating on INR8.9cr Loan ---------------------------------------------------------- ICRA has suspended the [ICRA]B rating assigned to the INR8.90 crore bank lines of Baldva Textiles Private Limited. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. Baldva Textile Pvt Ltd was incorporated in 1985 by Mr. Anil Baldva. BTPL is in the manufacturing of woven clothes and manufactures cotton, blends, lycra and polyester fabrics. The company has total of 54 looms and has an installed capacity of producing 42 lac meters of woven clothes per annum. The company is located in Bhilwara, Rajasthan. BALE BABU: ICRA Reaffirms 'B' Rating on INR6.64cr Loan ------------------------------------------------------ ICRA has reaffirmed its long term rating of [ICRA]B on the INR6.64 crore non-fund-based bank limits of Bale Babu Estates Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Non-Fund Based Limits-BG 6.64 [ICRA]B; reaffirmed ICRA's rating continues to remain constrained on account of the continued delay in its maiden project due to pending approvals. In addition to execution risks, given the large scale of the project, the company remains exposed to funding and marketing risks, which are accentuated by the limited clarity on execution. The rating however continues to take comfort from the promoter group's experience in developing and leasing commercial real estate in Delhi. ICRA notes that the promoters continue to fund the External Development Charges against which the rated bank guarantee has been extended. The company's ability to commence execution of the project and launch the same will remain the key rating sensitivity. Incorporated in 2006, BBEPL is developing a commercial project at Sector-109, Gurgaon, Haryana. While the company has obtained the license for developing this project, some approvals are still awaited. The project is yet to be launched. BHARAT CONSTRUCTIONS: CRISIL Assigns B Rating to INR65MM Loan ------------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings on the bank facilities of Bharat Constructions - Jammu (BC). The ratings reflect modest scale of operations and susceptibility of topline and profitability to tender-based nature of operations. These weaknesses are mitigated by an established track record in the civil construction industry. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 25 CRISIL A4 Cash Credit 65 CRISIL B/Stable Outlook: Stable CRISIL believes BC will continue to benefit over the medium term backed by the promoters' extensive experience in the construction industry. The outlook may be revised to 'Positive' if significant improvement in scale of operations along with prudent management of working capital requirement leads to improvement in accrual and financial risk profile. Conversely, the outlook may be revised to 'Negative', in case of any major costs or time over run incurred in projects being executed or if a large, debt- funded capital expenditure leads to weak financial risk profile. Incorporated in early 1970's as a partnership firm, BC undertakes construction of roads and buildings for Government authorities in North India. The firm is promoted by Mr. Bharat B Sharma and family. BHUPINDER ALLOYS: ICRA Lowers Rating on INR7cr Loan to D -------------------------------------------------------- ICRA has revised its ratings on the INR7.00 crore long term fund based bank limits of Bhupinder Alloys Private Limited to [ICRA]D from [ICRA]B+. ICRA has also revised its rating on the INR0.50 crore non fund based bank limits of BAPL to [ICRA]D from [ICRA]A4. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund based limits 7.00 Revised to [ICRA]D from [ICRA]B+ Non Fund based limits 0.50 Revised to [ICRA]D from [ICRA]A4 The rating revision is driven by delays in debt servicing by BAPL on account of its stretched liquidity position. ICRA takes note of the cyclical nature of the steel industry and its intensely competitive nature, translating into low profitability and thin coverage indicators. ICRA also takes cognizance of the extensive experience of the promoters and their long standing relationships with clients. Going forward a sustained improvement in the liquidity position and a track record of timely debt servicing will be the key rating sensitivities. Incorporated in 2004, Ludhiana (Punjab) based Bhupinder Alloys Pvt. Ltd. (BAPL), was promoted by the late Mr Surinder Kumar Arora. BAPL is primarily engaged in manufacturing Mild Steel (MS) ingots. BINDU FOOD: CRISIL Reaffirms 'D' Rating on INR50MM Cash Loan ------------------------------------------------------------ CRISIL's rating on the long-term bank facilities of Bindu Food Processors Private Limited (BFPPL) continues to reflect its delay in servicing its term debt obligations; the delays have been caused by the company's weak liquidity. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 50 CRISIL D (Reaffirmed) Long Term Loan 32.5 CRISIL D (Reaffirmed) Working Capital Loan 9.7 CRISIL D (Reaffirmed) BFPPL has a weak financial risk profile, marked by a small networth, high gearing, and weak debt protection metrics. However, the company benefits from its promoters' extensive experience in the cold-storage business. BFPPL was established in 1997 by Mr. Inder Raj Agrawal and his cousins, Mr. Hanuman Sahay Agrawal and Mr. Anil Agrawal. The company operates a 21,000 tonne cold storage unit (primarily for storing potatoes) in Paschim Medinipur. It also provides funding to farmers against the potatoes stored, which is in turn re- financed by banks. BFPPL sometimes trades in potatoes to ensure optimum capacity utilisation of its cold storage unit. The company is managed by Mr. Inder Raj Agrawal and Mr. Rajendra Kumar Agrawal. CEL PACKAGING: CRISIL Assigns 'B' Rating to INR30MM Cash Loan ------------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the bank facilities of Cel Packaging Private Limited (CPPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 30 CRISIL B/Stable Letter of Credit 67.5 CRISIL A4 The ratings reflect the company's low operating profitability and working capital intensive operations. The ratings also factor average financial risk profile of the company marked by average debt protection metrics. This weakness is partially offset by the extensive experience of promoters in the packaging industry and their established relationships with customers. Outlook: Stable CRISIL believes CPPL will continue to benefit over the medium term from the promoters' extensive industry experience and their established customer relationships. The outlook may be revised to 'Positive' in case of higher than expected revenue while maintaining the profitability leading to higher-than-expected cash accrual. Conversely, the outlook may be revised to 'Negative' on account of a substantial increase in working capital requirement or lower-than-expected cash accruals, or any large debt-funded capital expenditure weakens the financial risk profile, particularly liquidity. Incorporated in 2007, CPPL is an Ahmedabad-based company that manufactures corrugated boxes and wooden pellets. The Company is promoted by Mr. Sunil Handa and Ms. Divya Deepti Handa. The total installed capacity for producing corrugated boxes is 2000 tons per month, whereas the installed capacities for wooden pellets are 15000 units per month. DARWIN PHARMA: ICRA Assigns 'B' Rating to INR10cr LT Loan --------------------------------------------------------- ICRA has assigned the long term rating of [ICRA]B to the INR10.00 crore unallocated limits of Darwin Pharma Pvt. Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term un- allocated Limits 10.00 [ICRA]B; Assigned The assigned rating is constrained by the project implementation risk for setting up the formulation unit given that ~69% of the project cost is yet be incurred; significant funding risk with financial closure yet to be achieved for INR12.90 crore of term loan; and marketing risk in the absence of any customer agreements and highly competitive formulation industry which might put pressure on the margins. The debt servicing is highly sensitive to the timely completion of the project and the ability of the company to achieve the envisaged capacity utilizations in the near term. The rating is also constrained by the regulatory risk in obtaining required licenses in a timely manner for commencing operations; and debt funded nature of the project with debt to equity ratio of ~1.84:1. However, the assigned rating positively factors in the experience of promoters in establishing pharma manufacturing unit and medical shops in Coastal Andhra region with wide established networks. The ability of the company to complete the project with in timeline and without any cost over-runs and stabilize, the operations would be critical rating sensitivity. Darwin Pharma Pvt. Limited (DPPL), was incorporated in the year 2009, is setting up an Oral therapeutic formulation unit at Nuziveed, Krishna district of Andhra Pradesh with a total capacity of 90,000 litres per day. The syrups proposed to be manufactured by the company include Nystatin Oral Suspension, A-Z Multi Vitamin Syrup, Aristozyme Syrup and also cough & cold preparations. Mr. Devineni Ravi Kiran, Mr. China Venkata Ratnam and Mr. Rajashekhar Reddy are the current Directors of the company. The total cost of the proposed manufacturing facility is INR19.89 crore which will be part funded by the term loan of INR12.90 crore and remaining INR6.99 crore of promoters' equity. As per management, the commercial production is expected to start in last week of May'16. E-SHOPPE: Ind-Ra Assigns 'IND B+' Long-Term Issuer Rating --------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned E-Shoppe a Long- Term Issuer Rating of 'IND B+'. The Outlook is Stable. KEY RATING DRIVERS The ratings reflect E-Shoppe's lack of an operating track record as the company has started operating from May 2015. The ratings also consider the company's moderate scale of operations as reflected in its estimated revenue of INR100.79 million in 9MFY16. The ratings, however, are supported by E-Shoppe's founders' decade-long experience in the trading line of business. RATING SENSITIVITIES Positive: A substantial improvement in the scale of operations along with stabilisation of operations will be positive for the ratings. Negative: Failure to stabilise the operations will be negative for the ratings. COMPANY PROFILE Incorporated in December 2014, E-Shoppe is engaged in the trading of mobile phones and tablets. The entity was set up by Padam Nagwani and Mukesh Mohanlal Ahuja with its office situated in Kharghar, Maharashtra. EShoppe's ratings: -- Long-Term Issuer Rating: assigned 'IND B+'/Stable -- INR1 million fund-based limits: assigned 'IND B+'/Stable -- INR50 million non-fund based limits: assigned 'IND A4' EARTHCON DEVELOPERS: ICRA Revises Rating on INR12cr Loan to B+ -------------------------------------------------------------- ICRA has upgraded its long term rating on the INR12 crore term loans of Earthcon Developers Pvt Ltd to [ICRA]B+ from [ICRA]B. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loan 12.00 [ICRA]B+;revised The rating upgrade takes into account the satisfactory progress in the execution of EDPL's project (~66% of the construction cost had been incurred as of February, 2016, compared to ~20% as of December, 2014). With steady execution and bank loan funding available, the project has witnessed improvement in committed receivable to pending outflow ratio to 0.46x as of February, 2016 from 0.26x as of December, 2014. ICRA's rating continues to factor in the experience of the promoters in the real estate sector and the low approval risk for the company's project. However, the rating remains constrained by the modest sales for the project as only ~26% of area has been sold as of February, 2016, as compared to 17% as of December, 2014. While prices have remained under pressure, the collection efficiency also remains at 62% as of February, 2016, although better than 55% as of December 2014, owing to a weak market scenario. The ratings are further constrained by the steep repayments for the company in FY18, which warrant a ramp up in sales and collection in order to manage cash flows. The ability of the company to execute the project within the scheduled time and cost, successfully market the unsold inventory and collect receivables in a timely manner will be the key rating sensitivities. EDPL is a special purpose vehicle floated by Earthcon Construction Private Limited and ISP Construction Private Limited, with respective stakes of 50.002% and 49.998%. It was incorporated on May 3, 2013 and is developing a residential project, 'Rajpur Greens', in Dehradun, Uttarakhand. The project comprises saleable area of 96,720 square feet and consists of 52 two and three BHK flats spread over two towers, of six floors each. The construction started in January, 2014 and as of February, 2016, ~66% of the construction cost had been incurred and ~26% area had been sold. The total project cost is estimated at INR31.78 crore, with INR12 crore being funded through bank loans and the balance through promoter's contribution and customer advances. GOPAL KRISHNA: CRISIL Assigns B+ Rating to INR70MM Cash Loan ------------------------------------------------------------ CRISIL has assigned its rating of 'CRISIL B+/Stable' to the short-term bank facility of Gopal Krishna Oil-Tech Industries Private Limited (GKPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 70 CRISIL B+/Stable The rating reflects GKPL's modest scale of operations in the highly fragment edible oil industry. The rating also reflects the below-average financial risk profile because of weak capital structure and moderate debt protection metrics. These weaknesses are partially offset by the promoter's extensive experience in the edible oil industry. Outlook: Stable CRISIL believes that GKPL will maintain its business risk profile backed by the promoter's extensive experience in the edible oil industry. The outlook may be revised to 'Positive' if there is higher-than-expected growth in revenue and profitability while improving its working capital management. Conversely, the outlook may be revised to 'Negative' if financial risk profile weakens because of a significant increase in working capital requirements, or a sharp decline in revenue and operating margin. Incorporated in 2001, GKPL manufactures and trades in edible oil and coconut oil. The company, based in Mumbai, sells edible oil and coconut oil under its Ruchira and Cococlear brand, respectively. The operations are managed by Mr. Dilip Pol. GOPALAKRISHNA TEXTILE: CRISIL Suspends D Rating on INR97.5MM Loan ----------------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of Gopalakrishna Textile Mills Private Limited (GTPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 2.6 CRISIL D Cash Credit 97.5 CRISIL D Term Loan 49.9 CRISIL D The suspension of ratings is on account of non-cooperation by GTPL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, GTPL is yet to provide adequate information to enable CRISIL to assess GTPL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings'. Incorporated in 1953, GTPL is engaged in manufacture of cotton yarn. Its day-to-day operations are managed by Mr. Y G Madhusudan. GREENLAND PAPER: CRISIL Suspends B+ Rating on INR32.5MM Loan ------------------------------------------------------------ CRISIL has suspended its rating on the bank facilities of Greenland Paper Mills Ltd. (GPML). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 32.5 CRISIL B+/Stable Long Term Loan 27.5 CRISIL B+/Stable The suspension of rating is on account of non-cooperation by GPML with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, GPML is yet to provide adequate information to enable CRISIL to assess GPML's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings' Incorporated in 1995 and based in Kollam (Kerala), GPML manufactures Kraft paper. The company also owns a windmill in Tirupur (Tamil Nadu); it is promoted by Mr. A M Ashraf and his brother Mr. A M Dasthageer. GROW WELL: ICRA Lowers Rating on INR240cr Loan to 'D' ----------------------------------------------------- ICRA has downgraded the short-term rating from [ICRA]A3 to [ICRA]D outstanding on the INR240 crore non fund based bank facilities of Grow Well Mercantile Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Non Fund Based 240.0 [ICRA]D (Downgraded from Limits [ICRA]A3) The rating downgrade takes into account the recent delay in debt servicing obligations by the company owing to the stretched liquidity position on account of delays in receivables from its debtors. The stretched liquidity position in turn resulted in delayed payments to creditors as evidenced by high creditors (143 days as of Mar-15). The TOL/TNW (Total Outside Liabilities/ Total Networth) remains high at 14.9 times as of Mar-15, up from 10.0 times as of Mar-14. The rating continues to be impacted by GWMPL's low operating profitability and cash accruals resulting from low value addition in the business; intense competition in the steel trading industry owing to a high degree of fragmentation; and the volatility inherent in the steel trading business. The rating also accounts the exposure of the business to regulatory risks, along with the cyclicality in investment patterns of its key end- user industries. ICRA has taken into account the experience of the promoters in the steel industry and the operational and financial support from the Uttam Galva Group, which has an established track record in steel manufacturing. Incorporated on January 21, 1997, GWMPL is a closely-held private limited company of the Uttam Galva Group, promoted by the Miglani family. The company is engaged in trading steel products such as hot rolled coils, cold rolled coils and sheets, as well as galvanized products such as galvanized plain and galvanized corrugated coils and sheets. GWMPL also has a steel processing centre at Taloja for minor fabrication of steel products for supply in the vicinity. Uttam Galva Group has been engaged in manufacturing and trading various steel products for close to five decades. The Group has considerable expertise and linkages to both suppliers and customers across various geographical locations Recent Results For the year ended March 31, 2014, the company reported a Profit after Tax (PAT) of INR6.00 crore on an operating income (OI) of INR659.24 crore. For the year ended March 31, 2015, the company reported a PAT of INR2.46 crore on an OI of INR1168.53 crore. H B OIL: ICRA Suspends 'B' Rating on INR5.03cr Loan --------------------------------------------------- ICRA has suspended the [ICRA]B rating assigned to the INR5.03 crore limits of H B Oil Industries. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. According to its suspension policy, ICRA may suspend any rating outstanding if in its opinion there is insufficient information to assess such rating during the surveillance exercise. H B Oil Industries was established in June 2013 as a proprietorship firm to engage in crushing of cotton seeds to produce cottonseed oil and cottonseed oil cake and is promoted and managed by Mr. Haresh N Jani. The manufacturing unit located in Mehsana, is equipped with 10 expellers having total installed capacity of crushing 60 MT of cottonseeds per day. HINDUSTAN FIBRE: ICRA Assigns B- Rating on INR8.60cr Loan --------------------------------------------------------- ICRA has assigned a long term rating of [ICRA]B- to the INR0.40 crore1 term loan, INR8.60 crore cash credit and INR5 crore bank guarantee facility of Hindustan Fibre Glass Works. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Term Loan 0.40 [ICRA]B- assigned Fund Based Cash Credit 8.60 [ICRA]B- assigned Non-Fund Based Bank Guarantee 5.00 [ICRA]B-assigned The assigned rating is constrained by HFGW's weak financial profile as reflected byhigh gearing, weak coverage indicators and subdued return on capital employed. The rating further takes into consideration HFGW's highly working capital intensive nature of operations due to high stock holdings that adversely impacted its liquidity position in 2014-15, as also reflected by the frequent overutilization of its cash credit facilities. ICRA notes the risks associated with the legal status of HFGW as a partnership firm, including the risk of withdrawal of capital by the partners. The rating takes note of the experience of the partners in the railway coach furnishing business. The increasing focus of the Government to improve railway infrastructure is likely to lead to higher demand for the firm's products in the near future. Going forward, the ability of the firm to increase its scale of operations while managing its working capital requirements efficiently would be the key rating sensitivities. HFGW was founded in 1984 as a partnership firm by Mr. Govindbhai Patel and Mr. Shankar Patel at Kolkata. Later in 1998, the firm started its new unit at Vadodara, Gujarat. HFGW is engaged in interior furnishing work for railway coaches. The firm manufactures all types of fibre-reinforced polymer (FRP) products -- such as paneling, gear case, door paneling, modular toilet and partition frames, seats and components, and driver's cabin, among others -- which are fitted to railway coaches. The firm, being an approved vendor, participates in tenders floated by various railway departments. Recent Results HFGW has reported a net profit of INR1.09 crore on an operating income of INR40.61 crore during 2014-15, as compared to a net profit of INR1.01 crore on an operating income of INR41.39 crore during 2013-14. I.P. COMPLEX: CRISIL Reaffirms 'B' Rating on INR35MM Loan --------------------------------------------------------- CRISIL's rating on the long-term bank facilities of I.P. Complex Private Limited (IPCPL) continues to reflect the company's weak financial profile because of a high total outside liabilities to tangible net worth (TOLTNW) ratio and below-average debt protection metrics, and a small scale of operations in the intensely competitive automobile dealership market. These rating weaknesses are partially offset by the extensive industry experience of IPCPL's promoters. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 30 CRISIL B/Stable (Reaffirmed) Electronic Dealer Financing Scheme (e-DFS) 35 CRISIL B/Stable (Reaffirmed) Term Loan 15 CRISIL B/Stable (Reaffirmed) Outlook: Stable CRISIL believes IPCPL will continue to benefit over the medium term from its promoters' extensive industry experience and their financial support. The outlook may be revised to 'Positive' in case of a significant and sustainable increase in scale of operations along with healthy profitability, leading to larger- than-expected cash accrual and a better capital structure. Conversely, the outlook may be revised to 'Negative' in case of less-than-expected cash accrual or any debt-funded capital expenditure, resulting in further weakening of the company's capital structure, or an increase in working capital requirement, leading to stretched liquidity. Update Operating revenue was INR320 million in 2014-15 (refers to financial year, April 1 to March 31) and INR285.10 million in the eight months through November 2015. Revenue is expected to remain at around INR400 million per annum over the medium term. Operating margin was lower-than-expected at 2.12 percent in 2014- 15, but is likely to improve to 2.50-2.75 percent over the medium term. Financial risk profile remains weak because of a small net worth of INR4.4 million as on March 31, 2015, a decline from INR6.4 million a year earlier. The decline was driven by a net loss of INR2.0 million in 2014-15. Due to a small net worth and higher dependence on external funding, the TOLTNW ratio was high at 24.16 times as on March 31, 2015, but expected to improve to around 18.00 times over the medium term on account of healthy accretion to reserves. The company's interest coverage ratio was also weak at 0.7 time in 2014-15, but is expected to improve and remain at 1.1-1.3 times over the medium term. Liquidity is expected to remain average due to working capital- intensive operations as indicated by high inventory of 94 days as March 31, 2015. Inventory days were higher mainly due to a spill over of some sales to the next financial year. However, in general, the company maintains inventory of 50-60 days. Bank limit utilisation has remained low at around 50 per cent over the 12 months through November 2015 due to support from promoters in the form of unsecured loans as well as credit period of 10-12 days from the company's principal, Honda Car India Ltd (HCIL); this provides sufficient cover for working capital requirement. Incorporated in 2009, IPCPL is an exclusive dealer for the passenger cars of HCIL in the Varanasi region of Uttar Pradesh. Commercial operations started in February 2014. Operations are managed by Mr. Sachin Kumar Talwar. The company has a showroom in Varanasi, which is run under the name of Hans Honda. IG SOLAR: Weak Financial Strength Cues ICRA 'SP4D' Grading ---------------------------------------------------------- ICRA has assigned its SP4D grading to IG Solar Private Limited (IGSPL). The grading indicates 'Weak performance capability' and 'Weak financial strength' of the channel partner to undertake solar projects. The grading is valid for a period of two years from March 11, 2016 after which it will be kept under surveillance. Grading Drivers Strengths * Directors long experience in running business. * Demonstrated execution capability by installing around 118Kw in Solar PV and installation of water heater of 1000 litre in thermal space. * Positive feedback from customers, suppliers and banker. Risk Factors * Small scale of operations * Decline in sales witnessed in FY2015. * Less number solar projects executed during the last 2 years * Large number of unorganized players indicating high level of competition may lead to pressure on margins. * Negative networth ; however networth at group level is quite comfortable at INR10.15 crore. Fact Sheet Year of Establishment December 2009 Office Address A-12 Vikaspuri, New Delhi Managing Director Mr Yogesh Sachdeva IG Solar Private Limited was incorporated in 2009 to supply PV products in off grid space including home lighting systems. The company has already installed 118 kw of the solar PV power plants for private customers. Apart from this the company has also installed solar water heater having capacity of 1000 liter in thermal power space. The company is promoted by Mr Yogesh Sachdeva and his family members who have been engaged in the business of Marble stones for the past 3 decades. The directors of the company are well qualified and they have hired technically sound persons in the top management who have long experience in the solar industry. They have another group companies Ramson Organics Limited and Savitri Overseas which are engaged in the trading of Marble stones. SI Related Business - Weak Performance Capability Directors' Track Record The directors of the firm are from varied fields with Mr Yogesh Sachdeva and his son along with other Directors. Directors have strong experience in running the business and are well supported by other top level management. Technical competence and adequacy of manpower: The firm is primarily engaged in the assembling of manufacturing of solar off grid plants at the client site. Apart from that it is also engaged in the manufacturing of Solar PV products such as solar street lights lanterns etc. It has already executed 118 Kw of the solar power projects. The company has also installed solar water heater having capacity of 1000 liter in thermal power space. The firm is having technical tie up with Germany based company Sonnen Systeme Gmbh to provide technical assistance in the solar power projects going forward. As on February 2016 the firm has 10 people comprising 3 people in the directors group and, 6 skilled workers. The company hires contractual labors as and when required. Quality of suppliers and tie ups The firm sources key material such as Panels, batteries from the vendors and then installs the plant at the client site. Some of the key suppliers include Statcon Power Controls Limited, Waree, Sukam etc. Most of these suppliers are holding standard quality certifications required. Customer and O&M Network: In the PV space it has been supplying the solar products to commercial segments mainly. At present it has supplied to its group company, marble traders and educational institutes who are satisfied with the delivery and maintenance as per the agreed terms. The firm offers free service for the first year, 4 year warranty on all the products In addition to this the firm also offers annual maintenance contract till the expiration of the guarantee. Revenues Revenues of INR2 lakh as on FY15 Return on Capital Employed (RoCE) 0.43% in FY15 Total Outside Liabilities / Tangible Net worth Less than 1 times if we take into account promoter net worth, however since company net worth is negative it also turns out negative. Interest Coverage Ratio 32 times as on FY15 Net-Worth Net worth of INR10.15 crore in FY15 including group companies Current Ratio More than 2 times in FY15 Relationship with bankers Bankers are satisfied with firm's conduct The overall financial profile of the firm is moderate. INDEPENDENT MINERAL: CRISIL Reaffirms B+ Rating on INR100MM Loan ---------------------------------------------------------------- CRISIL's rating on the long term bank loan facilities of Independent Mineral Resources Private Limited (IMRPL) reflects IMRPL's below-average financial profile marked by modest debt protection measures and net worth, exposure to customer concentration risks in revenue profile and its small scale of operations. These ratings weaknesses are partially offset by the benefits IMRPL derives from its promoter's extensive experience in the steel industry and its established relationships with its suppliers and customers. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Export Packing Credit 100 CRISIL B+/Stable (Reaffirmed) Proposed Long Term 50 CRISIL B+/Stable (Reaffirmed) Bank Loan Facility Outlook: Stable CRISIL believes that IMRPL will continue to benefit from the extensive industry experience of the promoters. The outlook may be revised to 'Positive' in case IMRPL enhances its scale of operations, mainly by diversifying its product mix and markets, while it maintains its profitability, resulting in higher-than- expected accruals. Conversely, the outlook may be revised to 'Negative' if IMRPL's financial risk profile weakens, most likely because of any large debt-funded capex or decline in revenues and profitability margins. IMRPL is a Hyderabad based company engaged in trading of mill scale. The day-to-day operations are managed by its promoter director Mr. M Charan. IMRPL reported, a profit after tax (PAT) of INR4.2 million on operating income of INR322 million for 2014-15 (refers to financial year, April 1 to March 31); the company reported a PAT of INR4.7 million on operating income of INR322 million for 2013- 14. INDIA SOLAR: Weak Financial Strength Cues ICRA SP4D Grading ----------------------------------------------------------- ICRA has assigned SP4D grading to India Solar Limited (ISL). The grading indicates Weak performance capability and Weak financial strength of the channel partner to undertake off-grid solar projects. The grading is valid for a period of two years from March 17, 2016 after which it will be kept under surveillance. Grading Drivers Strengths * Technically sound promoters with long experience in running business * Positive feedback from customer and supplier Risk Factors * Relatively small scale of operations * Large number of unorganized players indicating high level of competition leading to low profitability margins * Geographical concentration risk due to limited presence in Haryana and Punjab only * Nascent stages of operations as reflected by low installations in the solar PV space * High working capital intensity Fact Sheet Year of Establishment 2012 Office Address SCO 93, Inner Market, Sector 11, Panchkula Directors Mr. Chander Mukhi Sharma Mr. Jasbir Singh Mr. Anil Mehta Started in year 2012 ISL is a private limited company and is into manufacturing of solar water heaters/geysers, solar luminaries, solar light and other solar equipments. It is also involved in installation erection and commissioning of solar power plants. The company has installed approximately 50 KW in the solar PV space. The company has done its projects mainly in Haryana and Punjab. The ranges of services provided by the company are as follows: * Design, engineering and construction of off grid integrated solar installations * Solar products like LED solar lighting systems, solar water heating systems SI Related Business - Weak Performance Capability Promoter Track Record: The management has sound experience in solar PV space. The firm has been started by Mr. Chander Mukhi Sharma, Mr. Jasbir Singh and Mr. Anil Mehta in 2012. The firm started its operations in December 2012. Technical competence and adequacy of manpower: The company has installed approximately 25 KW solar power plants and approximately 25 KW of solar products like street and home lightning systems. The technical competence is moderate as represented by positive feedback from the customers and well qualified management profile. The firm presently has 4 employees including directors. The company also employs contractual labor for executing orders as and when required. Quality of suppliers and tie ups: The company procures solar panels and solar lights from local suppliers based near Chandigarh like Safedot Innovative Auotmation Pvt. Ltd., Aggarwal Trader and its group company Andy Solar Pvt. Ltd. Customer and O&M Network: In the PV space it has been supplying the solar products to commercial segment. The clients are satisfied with the after sale services of the company. INDORE TABLE: Ind-Ra Assigns 'IND B' Rating to INR72.2MM Loan ------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Indore Table Tennis Trust's (ITTT) INR72.2 million term loans and INR0.54 million working capital facility an 'IND B' rating. The Outlook is Stable. KEY RATING DRIVERS The rating is constrained by ITTT's high debt burden. In FY15, its debt/current balance before interest and depreciation (CBBID) was 41.66x. The rating factors in ITTT's low debt service coverage ratio (FY15: 0.09x) and interest service coverage ratio (2.53x). Since interest during the construction phase is being capitalised, the interest service coverage ratio has been overstated. However, debt is serviced in a timely manner, using the donations that come into the trust. The rating also factors in the trust's weak-though-improving liquidity; memberships at ITTT's facilities began in FY13 and it currently has 342 members. Its available funds (cash and unrestricted investments) of INR17.52 million as at FYE15 provided a comfortable financial cushion to its operating expenditure (FY15: 179.85%) and moderate cushion to debt (FY15: 18.59%). ITTT's operating margins have remained comfortable, albeit with slight fluctuations throughout FY11-FY15. Its total income has remained stable, with minor fluctuations over FY11-FY15, declining at a CAGR of 2.77% during the period. Major revenue contributors have been rental income from ITTT's facilities and annual membership fees. Its total expenditure increased at a CAGR of 7.27% over FY11-FY15, with major contributors being operating expenditure and staff costs. ITTT is soon slated to complete the construction of a 1,000- seater auditorium, which will also be open for hiring, along with its existing facilities. It has already incurred debt for the construction. RATING SENSITIVITIES Positive: A sustained increase in membership numbers and increasing use of ITTT's facilities, without negatively affecting operating and administrative costs, will be positive for the rating. Negative: A deteriorating financial profile resulting from a lower-than-expected rise in membership numbers and weakening demand for its facilities, along with a disproportionate increase in debt, could be negative for the rating. COMPANY PROFILE ITTT was formed in December 1994. It runs the Abhay Prashal Sports Club, which provides table tennis and other indoor game facilities; it also has a swimming pool, banquet halls and an upcoming auditorium. It recently began accepting members and is working on expanding its facilities. JIA AUTO: ICRA Lowers Rating on INR17cr Cash Loan to 'C' -------------------------------------------------------- ICRA has revised the long-term rating assigned to INR17.00 crore cash credit facility and INR9.50 crore term loans of Jia Auto Sales Private Limited from [ICRA]C+ to [ICRA]D and simultaneously reassigned the long-term rating of [ICRA]C. ICRA has also revised the short term rating assigned to the non fund based limits of INR5.50 crore from [ICRA]A4 to [ICRA]D and simultaneously reassigned the short term rating of [ICRA]A4. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Cash 17.00 [ICRA]C (downgraded Credit from [ICRA]C+ to [ICRA]D and then reassigned to [ICRA]C Fund Based Term 9.50 [ICRA]C (downgraded Loans from [ICRA]C+ to [ICRA]D and then reassigned to [ICRA]C Non Fund Based Limit 5.50 [ICRA]A4 (downgraded from [ICRA]A4 to [ICRA]D and then reassigned to [ICRA]A4 The rating action follows the delay in repayment of its term loan during the period May, 2014 to May, 2015. However, following the full repayment of term loan in May, 2015, leading to regularization of the company's debt obligations, ICRA has revised the rating long term rating from [ICRA]D to [ICRA]C and the short term rating from [ICRA]D to [ICRA]A4. The ratings continue to take into account the net losses and cash losses incurred by the company over the period FY2013 to FY2015, leading to a significant erosion in the tangible net worth of the company, which declined from INR14.98 crore in FY2013 to INR5.07 crore in FY2014 and further to INR2.45 crore during FY2015. The losses have been primarily on account of decline in income from the dealership business resulting from lower vehicle sales over the years and the high interest costs resulting from the debt undertaken to fund its operations. The high working capital intensity of the company's operations as reflected by NWC/OI of around 56% in FY2015 continue to exert pressure on the liquidity position of the company, as also reflected by the high utilisation of the bank limits of the company. The ratings further take into account the company's exposure to the inherent cyclicality of the Indian passenger car industry, intense competition from other passenger car dealers given the highly competitive environment in the passenger car segment with aggressive launches and expansion of service networks. The ratings, however, also take into consideration the long standing experience of the promoters in the passenger vehicles dealership business. JASPL was taken over by the Kolkata based Modi family, during FY08. The company is an authorized dealer for the sale of passenger cars as well as for services and sale of spares in for Skoda cars within the State of West Bengal. JASPL has one showroom and a service centre in Kolkata, West Bengal. Recent Results JASPL recorded a net loss of INR4.49 crore on operating income of INR28.40 crore during FY2015 as against a net loss of INR4.01 crore on operating income of INR31.81 crore during FY2014. KAMAKSHI COTTON: CRISIL Cuts Rating on INR82.5MM Loan to 'D' ------------------------------------------------------------ CRISIL has downgraded its rating on the long-term bank facilities of Kamakshi Cotton Industries Ginning and Pressing Unit (KCI) to 'CRISIL D' from 'CRISIL B+/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 82.5 CRISIL D (Downgraded from 'CRISIL B+/Stable') Proposed Long Term 32.5 CRISIL D (Downgraded from Bank Loan Facility 'CRISIL B+/Stable') Term Loan 10. CRISIL D (Downgraded from 'CRISIL B+/Stable') The downgrade reflects instances of delay by KCI in servicing its debt. The delays have been caused by weakening in liquidity. KCI's scale of operations in the highly fragmented cotton ginning industry remains modest, and its financial risk profile continues to be constrained by high gearing, small networth, and weak debt protection metrics. However it benefits from its promoters' extensive industry experience. Established in 2008 as a partnership concern, KCI gins and presses raw cotton, and sells cotton lint and cotton seeds. The firm also undertakes extraction of cottonseed oil. It is promoted by J. Bhaskar Rao and his family members and is based in Karimnagar (Telangana). KAMAL PRESSING: CRISIL Reaffirms B- Rating on INR50MM Cash Loan --------------------------------------------------------------- CRISIL's rating on the long-term bank facility of Kamal Pressing Factory (KPF) continues to reflect KPF's modest scale of operations with low profitability, susceptibility to volatility in cotton prices, and below-average financial risk profile because of small networth, high gearing, and weak debt protection metrics. These weaknesses are mitigated by the proprietor's extensive experience in the cotton industry. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 50 CRISIL B-/Stable (Reaffirmed) Outlook: Stable CRISIL believes KPF's financial risk profile will remain weak over the medium term owning to weak capital structure. The outlook may be revised to 'Positive' if capital structure and liquidity significantly improve through capital infusion. Conversely, the outlook may be revised to 'Negative' if low cash accrual, large working capital requirement, or substantial debt- funded capital expenditure constrains liquidity. Established in 1998 and based in Hingoli (Maharashtra), KPF presses cotton and sells cotton bales and seeds. Its pressing unit has installed capacity of 400 cotton bale per day. KPF is a sole proprietorship firm owned and managed by Mr. Anil Lahoti. KAVERI GINNING: ICRA Suspends B+ Rating on INR13.28cr Loan ---------------------------------------------------------- ICRA has suspended [ICRA] B+ assigned to INR13.28 crore fund based limits and INR6.72 crore unallocated limits of Kaveri Ginning Mills Private Limited. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. Kaveri Ginning Mills Private Limited (KGMPL), located in Karimnagar district of Andhra Pradesh was incorporated in the year 2008 by Mr. K. Ramesh. The company is primarily engaged in ginning and oil extraction. KGMPL has 60 ginning machines and 10 expellers. It is a TMC (Technology mission on Cotton) unit. Mr. Ramesh has more than 25 years of experience in the field of cotton ginning and trading. KEAUM ORGANICS: CRISIL Lowers Rating on INR41.7MM Loan to 'D' ------------------------------------------------------------- CRISIL has downgraded its ratings on the bank facilities Keaum Organics Private Limited (Keaum) to 'CRISIL D/CRISIL D' from 'CRISIL B-/Stable/CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 3.3 CRISIL D (Downgraded from 'CRISIL A4') Cash Credit 10.0 CRISIL D (Downgraded from 'CRISIL B-/Stable') Term Loan 41.7 CRISIL D (Downgraded from 'CRISIL B-/Stable') The rating downgrade reflects consistent delays by Keaum in servicing its debt owing to liquidity constraints. The ratings also reflect Keaum's modest scale of operations and exposure to risks arising from volatility in crude oil prices. These rating weaknesses are partially offset by the experience of the promoters in the industry. Incorporated in July 2009, Keaum is promoted by Mr Ketan Joshi and Mr Bipin Shah for setting up a solvent distillation unit in India to cater to the pharmaceutical and chemical industries for their requirements of rectifying/purifying/distilling solvents and speciality chemicals. The company commenced manufacturing in July 2011. LAXMI GRITS: ICRA Suspends B Rating on INR5.65cr Loan ----------------------------------------------------- ICRA has suspended the [ICRA]B rating for the INR5.65 Crore bank facilities of Laxmi Grits Private Limited. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. M.M. ISPAT: ICRA Assigns 'B' Rating to INR6cr Cash Loan ------------------------------------------------------- ICRA has assigned a long term rating of [ICRA]B to the INR6.00 crore fund based cash credit facility and the INR4.0 crore unallocated limits of M.M. Ispat Pvt. Ltd. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term Cash Credit Facility 6.00 [ICRA]B assigned Long term Unallocated limits 4.00 [ICRA] B assigned The assigned rating takes into account MMIPL's weak financial profile characterized by nominal profits, low cash accruals, depressed debt coverage indicators and high working capital intensity of operations, as reflected by net working capital relative to its operating income of 42% as on March 31, 2015. ICRA notes that this adversely impacts its liquidity position, as also reflected by the high utilization of bank limits sanctioned to the company. The rating also considers the limited value addition in MMIPL's business and a highly fragmented nature of the industry characterized by intense competition, both of which result in thin operating and net profitability. The rating, however, draws comfort from the long experience of the promoters with over three decades in the steel trading business and its diversified product mix including hot rolled sheets, cold rolled sheets, galvanized plain, galvanized corrugated sheets, M.S. angles, M.S. channels, M.S. pipes, etc. Going forward, MMIPL's ability to grow its business and improve its profitability with effective management of working capital would remain the key rating sensitivities. M.M. Ispat Private Limited, incorporated in the year 2009, is engaged in trading of iron and steel products, such as hot rolled sheets, cold rolled sheets, galvanized plain, and galvanized corrugated sheets, among other products, primarily in Raipur, Chhattisgarh. Recent Results MMIPL reported a net profit of INR0.15 crore on an operating income of INR25.62 crore during FY2015, in comparison to a net profit of INR0.14 crore on an operating income of INR22.99 crore during FY2014. MADHUCON AGRA: ICRA Reaffirms D Rating on INR230cr Term Loan ------------------------------------------------------------ ICRA has re-affirmed the long-term rating assigned to INR230.00 crore1 fund based facilities of Madhucon Agra Jaipur Expressways Limited at [ICRA]D. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term loans 230.00 [ICRA]D Re-affirmed The rating reaffirmation takes into account continued delays in repayment of debt obligations. The operations grant payable by NHAI is withheld for more than seven quarters pending completion of major maintenance works (Rs. 18.52 crore receivable as on March 31, 2015). This coupled with ongoing major maintenance works on the project stretch has resulted in stretched liquidity resulting in delays in debt servicing. The project is also exposed to the inherent risks in Build-Operate-Transfer (BOT) toll road projects, including political acceptability of rate hikes linked to WPI year after year over the concession period and likelihood of toll leakages. Nevertheless, comfort can be drawn from the fact that the SPV had been able to revise the toll rates since COD successfully. The project stretch remains an important route providing connectivity between NH-8 and NH-2, which is part of the Golden Quadrilateral road network. Due to its high dependence on commercial traffic (accounts for more than 70% of traffic in PCU terms), the toll revenues on this project stretch is highly co-related with general economic conditions. During 10M FY 16, traffic witnessed healthy growth of 11% in PCU terms. ICRA notes that the sponsors have entered into a definitive agreement with M/s.Cube Highways and Infrastructure Pte Limited3 for sale of 100% equity in MAJEL. Approval from NHAI and few lenders in the consortium is in place, the stake sale process is expected to be completed in next few months. Going forward, MAJEL's ability to service its debt obligations in a timely manner will be the key rating sensitivity. MAJEL is a special purpose vehicle (SPV) promoted by Madhucon Projects Limited (MPL along with associates) and SREI Infrastructure Finance Limited. MAJEL has been formed to strengthen and widen the existing 57 km stretch between Bhartapur and Mahwa (both in Rajasthan) on NH-11. The project has been awarded by National Highway Authority of India (NHAI) on a Build- Operate-Toll (BOT) basis, and has a concession period of 25 years starting October 31, 2005. The scheduled commercial operation date (COD) of the project was October 2008, but tolling commenced in May 2009. The project highway along with the other sections of NH-11 provides connectivity between NH-8 (connecting Mumbai- Delhi) and NH-2 (connecting Kolkata-Delhi), which are a part of Golden Quadrilateral. Recent Results The company has reported 9% growth in toll collections to INR52.41 crore during FY 15. The operating income stood at INR64.07 crore including the operations grant of INR11.67 crore. The company reported a net loss of INR47.88 crore during FY 15 when compared to a net loss of INR11.34 crore in FY 14. MAINI CONSTRUCTION: Ind-Ra Assigns 'IND BB-' LT Issuer Rating ------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Maini Construction Equipments Private Limited (MCEPL) a Long-Term Issuer Rating of 'IND BB-'. The Outlook is Stable. A full list of rating actions is at the end of this commentary. KEY RATING DRIVERS The ratings reflect MCEPL's moderate scale of operations as indicated by revenue of INR753.15 million in FY15 (FY14: INR394.03 million) coupled with narrow EBITDA margins of 2.08% (3.47%). The ratings also reflect the company's moderate credit profile with net financial leverage (total adjusted net debt/operating EBITDA) of 5.35x and gross interest coverage (operating EBITDA/gross interest expense) of 2.19x in FY15. Its liquidity position has been moderate, with 93.7% average utilisation of its fund-based working capital limits during the 12 months ended February 2016. The ratings are also constrained by MCEPL's presence in the highly fragmented and intensely competitive steel industry, susceptibility to cyclicality in steel industry and raw material price volatility. The ratings, however, are supported by the over 10 years of experience of MCEPL's promoters in the steel industry and the company's more than 18 years long operating history. RATING SENSITIVITIES Negative: A sustained deterioration in the profitability leading to sustained deterioration in the credit metrics will be negative for the ratings. Positive: A significant improvement in the revenue with improving operating profitability will be positive for the ratings. COMPANY PROFILE Incorporated in 1997, MCEPL manufactures aluminium formwork, cuplock scaffolding and wall formwork. The company also manufactures solar structures. MCEPL's ratings: -- Long-Term Issuer Rating: assigned 'IND BB-'; Outlook Stable -- INR90 million fund-based Limits: assigned 'IND BB- '/Stable/'IND A4+' -- INR19 million non-fund-based limits: assigned 'IND A4+' MANILA RESORTS: ICRA Suspends 'D' Rating on INR6cr Loan ------------------------------------------------------- ICRA has suspended the [ICRA]D rating for the INR6.00 Crore bank facilities of Manila Resorts Private Limited. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. MULTIDESIGNS INFRAWORKS: CRISIL Suspends D Rating on INR55MM Loan ----------------------------------------------------------------- CRISIL has suspended its rating on the bank facility of Multidesigns Infraworks Pvt Ltd (MIPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 55 CRISIL D The suspension of rating is on account of non-cooperation by MIPL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, MIPL is yet to provide adequate information to enable CRISIL to assess MIPL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings' MIPL, incorporated in 2011, is engaged in civil construction activities such as construction of tunnels, laying of pipes, and other activities related to irrigation. The company's promoters, Mr. Anil Amencheria, Mr. Haleem, and Mr. Raju Palani, oversee its day-to-day operations. NIRMALA RICE: CRISIL Assigns 'B' Rating to INR35MM Cash Loan ------------------------------------------------------------ CRISIL has assigned its 'CRISIL B/Stable/CRISIL A4' ratings to the bank facilities of Nirmala Rice Private Limited (NRPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 15 CRISIL B/Stable Bank Guarantee 10 CRISIL A4 Cash Credit 35 CRISIL B/Stable The ratings reflect NRPL's below-average financial risk profile because of weak capital structure and constrained debt protection measures, modest scale of operations in the highly fragmented rice industry, and large working capital requirement. The ratings also factor in susceptibility of its operating margin to changes in government regulations and volatility in raw material prices. These weaknesses are partially offset by its promoter's extensive experience in rice milling and his funding support. Outlook: Stable CRISIL believes NRPL will benefit over the medium term from its promoter's extensive industry experience and established relationships with customers. The outlook may be revised to 'Positive' if accrual increases significantly and sustainably or if considerable fund infusion by promoter leads to improved liquidity. Conversely, the outlook may be revised to 'Negative' in case of stretch in working capital cycle, weakening liquidity, or sizeable debt-funded capital expenditure, resulting in deterioration in financial risk profile. NRPL, incorporated in 2006 and promoted by Mr. Shivpujan Gupta, mills and processes paddy into rice, rice bran, and broken rice. Its rice mill is at Abhanpur in Raipur, and has installed milling capacity of 8 tonne per hour. OMEGA NATURAL: Weak Financial Strength Cues ICRA SP 3D Grading ------------------------------------------------------------- ICRA has assigned a 'SP 3D' grading1 to Omega Natural Polarity Private Limited, indicating the 'Moderate Performance Capability' and 'Weak Financial Strength' of the channel partner to undertake on-grid solar projects. The grading is valid for a period of two years from March 18, 2016 after which it will be kept under surveillance. Grading Drivers Strengths * Proven experience of promoters in the solar business * Healthy order book in place Risk Factors * Small scale of operations * Cumulative Solar installations at present remains at modest level * Low net worth of the company * Competitive pressure from other players in the industry Fact Sheet Year of Formation August 2010 Office Address #34 A, Gokul Nagari 2, "E" Wing Ground floor, Next to Hathway, Thakur Village, Kandivali (East), Mumbai - 400101 Partnership Pattern Mr. P Krishna Prasad - 90% Mrs. P Shruthy - 10% Incorporated in August 2010, ONPPL is primarily engaged in designing, implementation, commissioning and maintenance of PV based solar power projects. Till date the company has executed 0.3 MW of solar PV projects and has an order book of 10.02 MW. PARASMAL PAGARIYA: CRISIL Reaffirms B+ Rating on INR60MM Loan ------------------------------------------------------------- CRISIL's rating on the bank facilities of Parasmal Pagariya and Sons (PPS) continue to reflect PPS's modest business risk profile marked by vulnerability of operating margin to volatility in agricultural commodity prices and small scale of operations. The ratings also factor in the firm's large working capital requirements. These rating weaknesses are partially offset by the extensive experience of PPS's proprietor in the business of trading in food grains, edible oils, and spices. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 60 CRISIL B+/Stable (Reaffirmed) Proposed Long Term Bank Loan Facility 40 CRISIL B+/Stable (Reaffirmed) Outlook: Stable CRISIL believes that PPS will benefit over the medium term from its proprietor's extensive industry experience. The outlook may be revised to 'Positive' in case of significant increase in revenue with sustained operating margin, resulting in improvement in its liquidity. Conversely, the outlook may be revised to 'Negative' in case of decline in PPS's turnover or operating margin, or elongation of its working capital cycle, leading to deterioration of its financial risk profile. Update PP & Sons's revenue grew by 60 per cent to INR598.5 million in 2014-15 (refers to financial year, April 1 to March 31) driven by the firm receiving large one time orders. The revenue is expected to reduce to 2013-14 levels over the medium term. The firm's operating margin declined marginally to 9.7 per cent in 2014-15 from 11.1 per cent in the previous year. The firm's operations remained working capital intensive as reflected in its gross current asset (GCA) of around 168 days as on March 31, 2015. The large working capital requirements emanate from an elongated receivables cycle of 140 to 160 days, as the firm supplies food grains under the Integrated Child Development Scheme. As a result, the firm's reliance on external debt remains high reflected in the high utilization of bank lines at 97 per cent for the 12 months ended September 2015. The firm's net worth increased to INR132 million as on March 31, 2015 from INR77 million a year ago on account of infusion of funds into the firm to meet its increased working capital requirements. This led to moderation in the capital structure with total outside liabilities to tangible net worth (TOL/TNW) ratio improving to 2.84 times as on March 31, 2015 from 4.09 times a year ago. However, the financial profile continues to be constrained by PPS' exposure to group companies. The capital withdrawals of the firm and exposure to group companies will remain key rating sensitivity factors over the medium term. PPS was set up by Mr. Ulhas Pagariya in 1994 as a proprietary firm in Maharashtra. The firm undertakes wholesale trading of food grains, spices, and edible oils. PPS is a part of the Pagariya group, which has been in engaged in wholesale trading of food grains, spices, and edible oils for 40 years. POWER SPINNING: CRISIL Reaffirms B+ Rating on INR110MM Loan ----------------------------------------------------------- CRISIL's ratings on the bank facilities of Power Spinning Mills (PSM) continue to reflect the firm's modest scale of operations in the intensely competitive and highly fragmented textile industry and the working capital-intensive operations. These rating weaknesses are partially offset by the extensive experience of promoters in the textile industry and the above- average financial risk profile because of healthy gearing. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 110 CRISIL B+/Stable (Reaffirmed) Letter of Credit 20 CRISIL A4 (Reaffirmed) Outlook: Stable CRISIL believes PSM will continue to benefit over the medium term from the promoters' extensive industry experience. The outlook may be revised to 'Positive' if a sustainable increase in revenue and profitability results in large cash accrual and an improved financial risk profile. Conversely, the outlook may be revised to 'Negative' in case of low revenue or profitability, or if the working capital management weakens resulting in stretched liquidity, or if any large, debt-funded capital expenditure weakens the financial risk profile. Update PSM reported operating income and profitability of INR402 million and 11 percent, respectively, for 2014-15 (refers to financial year, April 1 to March 31), driven by steady offtake sales from an established customer base. The operating performance for the nine months through December 2015, was INR270 million. The firm is likely to sustain its stable operating performance over the medium term, given its established relationships with customers. The operating profitability is expected remain at 10-11 percent over the medium term, aided by healthy capacity utilisations. The cash accrual is expected to be at INR20-23 million over this period. The financial risk profile is healthy because of gearing of 1.10 times as on March 31, 2015. The networth was moderate at INR112 million. The debt protection metrics are comfortable, as reflected in net cash accrual to total debt and interest coverage ratios at 0.12 time and 1.82 times, respectively, for 2014-15. The capital structure is expected to improve on account of expected equity infusion of around INR20 million in 2015-16 by promoters. The financial risk profile is expected to remain above average, supported by moderate accretion to reserves. The liquidity is moderate, with expected annual cash accrual of INR20-23 million for 2016-17 and 2017-18, respectively, against debt obligation of INR7 million per annum, respectively. However, the working capital requirement is large, with gross current assets of 135 days as on March 31, 2015. Hence, the bank limits are normally utilised at high levels of around 90 percent. The liquidity is further supported by the absence of debt-funded capex plans, and need-based fund support from promoters. Established in 2003 as a partnership firm, PSM manufactures cotton yarn. The firm is based in Tirupur and is managed by Mr. Murugaswamy and Mr. Swaminathan. PRAFFUL EXPORTS: Ind-Ra Assigns 'IND B' Long-Term Issuer Rating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Prafful Exports (PE) a Long-Term Issuer Rating of 'IND B'. The Outlook is Stable. A full list of rating actions is at the end of this commentary. KEY RATING DRIVERS The ratings reflect PE's small scale of operations, tight liquidity position and weak credit metrics. Revenue was INR426 million in FY15 (FY14: INR402 million), net leverage was 6.3x (7.3x) and EBITDA interest coverage was 1.4x (1.5x). EBITDA margin fluctuated between 3.2% and 6.4% during FY12-FY15. The company's fund based facilities were fully utilised over the 12 months ended February 2016. The ratings factor in the partnership form of organisation. The ratings are supported by over two decades of experience of the company's promoter in the textile industry. RATING SENSITIVITIES Positive: A significant increase in the scale of operations and profitability leading to a sustained improvement in the credit metrics would be positive for the ratings. Negative: A decline in the profitability resulting in a further stretch in the liquidity profile could be negative for the ratings. COMPANY PROFILE Started in 1993, PE exports fabrics and ready-to-stitch dress materials to Europe, the US, and the Middle East. PE's ratings are as follows: -- Long-Term Issuer Rating: assigned 'IND B', Outlook Stable -- INR60 million fund-based facilities: assigned 'IND B'/Stable/'IND A4' -- INR35 million non-fund based facilities: assigned 'IND A4' RAFFLES GREEN: CRISIL Cuts Rating on INR49.5MM Term Loan to 'C' --------------------------------------------------------------- CRISIL has downgraded its rating on the long-term bank facilities of Raffles Green Pet India Private Limited (RGP) to 'CRISIL C' from 'CRISIL B-/Stable', and reaffirmed its rating on the short- term facility at 'CRISIL A4'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 9.5 CRISIL A4 (Reaffirmed) Cash Credit 40.0 CRISIL C (Downgraded from 'CRISIL B-/Stable') Proposed Long Term 1.0 CRISIL C (Downgraded from Bank Loan Facility 'CRISIL B-/Stable') Term Loan 49.5 CRISIL C (Downgraded from 'CRISIL B-/Stable') The downgrade reflects CRISIL's belief that RGP's business and financial risk profiles will remain constrained over the medium term on account of low offtake due to delay in operationalisation of its PET-recycling manufacturing facility. With sales of around INR20 million in the six months through February 2016. Liquidity will remain stretched over the medium term due to tightly matched cash accrual against debt obligations. The rating reflects RGP's nascent stage and small scale of operations in the highly competitive PET recycling industry, large working capital requirement along with weak financial risk profile marked by high gearing and below average debt protection metrics. These rating weaknesses are partially offset by the extensive industry experience of the company's promoters, and the favourable location of its plant ensuring availability of raw materials and labour. Incorporated in 2013, RGP, based in Kadi, Gujarat, is engaged in manufacturing pet flakes by recycling used PET bottles. The company is promoted by Mr. Jerambhai Chhaganbhai Kalathiya and his younger brother, Mr. Ankitbhai Mansukhbhai Ajani. RAHUL TEXO: ICRA Reaffirms B+ Rating on INR5.80cr LT Loan --------------------------------------------------------- ICRA has reaffirmed its long term rating of [ICRA]B+ on the INR5.8 crore long-term fund-based bank facilities of Rahul Texo Print. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long Term; Fund Based Limits 5.80 [ICRA]B+; reaffirmed ICRA's rating of Rahul Texo Print (RTP) continues to factors in the intensely competitive nature of the fabric processing industry, with low value addition and the fragmented nature of industry, which keeps the operating margins low. Further, the leveraged capital structure with a gearing of 4.31 times as on March 31, 2015 along with declining operating margins has suppressed the debt protection metrics. Further, the ratings also factor in the risks inherent to its proprietorship constitution, in terms of risk of capital withdrawal etc. However, the rating favourably takes into account the established track record and extensive experience of the promoters in the textile industry and the favourable location of the facility in Balotra, Rajasthan, which is a hub for processing poplin, rubia etc, thereby facilitating easy access to raw material and labour. The recently incurred capital expenditure on effluent treatment plant will help in seamless production. The ability of the firm to improve the profitability of its operations and prudently manage its working capital cycle along with increase in scale of operations will be the key rating sensitivities. Any major debt-funded capital expenditure will also be a key monitorable. Mr Vinod Singhvi set up Rahul Texo Print, a proprietorship firm, in 2009 and it is engaged in fabric processing at its unit in Jasol near Balotra, Rajasthan. Mr. Singhvi has been in this line of business for more than two decades. The firm has an installed capacity for processing around 1.5 million meters of fabric per month. Recent Results The firm reported a net profit of INR0.58 crore on an operating income of INR55.09 crore in 2014-15 as against net profit of INR0.25 crore on an operating income of INR29.43 crore in the previous year. RANGPUR TEA: CRISIL Assigns B- Rating to INR95.5MM Term Loan ------------------------------------------------------------ CRISIL has assigned its 'CRISIL B-/Stable/CRISIL A4' ratings to the bank facilities of Rangpur Tea Association Limited (RTAL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Term Loan 95.5 CRISIL B-/Stable Proposed Long Term Bank Loan Facility 0.5 CRISIL B-/Stable Bank Guarantee 4.0 CRISIL A4 Cash Credit 50.0 CRISIL B-/Stable The ratings reflect RTAL's modest scale of operations in the highly fragmented tea industry and vulnerability of its operating profitability to seasonality in production of tea. The ratings also reflect a below average financial risk profile marked by moderate capital structure and weak debt protection metrics. These rating weaknesses are partially offset by the extensive experience of RTAL's promoters in the tea industry. Outlook: Stable CRISIL believes that RTAL will continue to benefit over the medium term from its promoters' extensive industry experience. The outlook may be revised to 'Positive' in case of substantial and sustained improvement in the company's scale of operations and accruals along with improved working capital management. Conversely, the outlook may be revised to 'Negative' in case of low operating income and accruals, stretch in working capital cycle, or large debt-funded capital expenditure. RTAL was incorporated in 1917 and was taken over by the present management in 2005. RTAL is engaged in the tea plantation and processing. Mr. Madan Lal Agarwal, Mr. Binod Kumar Agarwal, Mr. Raj Kumar Agarwal, and Mr. Bhagirath Madan Lal Agarwal are the company's directors. ROYAL INFRASTRUCTURE: Ind-Ra Assigns 'IND BB-' LT Issuer Rating --------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned Royal Infrastructure (Royal) a Long-Term Issuer Rating of 'IND BB-'. The Outlook is Stable. Ind-Ra has also assigned the company's INR100.00 million long-term loans an 'IND BB-' rating with a Stable Outlook. KEY RATING DRIVERS The ratings reflect the risks that would emanate from the large inventory that Royal plans to hold in its ongoing project, Roses & Crown-II. This project consists of 86 villas, out of which 47 have been booked. The management claims almost 80% completion on the villas that have been sold. The management plans to build and hold the remaining 39 villas to benefit from price appreciation. This Ind-Ra believes exposes the company to uncertainty as the quantum of price appreciation and the duration for which the inventory is required to be held cannot be known. The ratings factor in the more than two decades of experience of the proprietor in the real estate and construction segments. RATING SENSITIVITIES Positive: Sale of villas as planned, leading to strong visibility of cash flows could lead to a positive rating action. Negative: Any delay in the funding or time and cost overruns stressing cash flows for debt service could lead to a negative rating action. COMPANY PROFILE Incorporated in 2015, Royal is a special purpose vehicle set up for the construction of 86 villas in Dholka. The proprietorship firm is managed by Ms Kavita K. Mistry. SAHASRALINGESHWARA POWER: ICRA Reaffirms B Rating on INR64cr Loan ----------------------------------------------------------------- ICRA has reaffirmed the long-term rating of [ICRA]B assigned to INR64.00 crore term loan of Sahasralingeshwara Power Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loan 64.00 [ICRA]B reaffirmed The reaffirmation of rating remains constrained by the additional time and cost overruns in the Nekkiladi project due to rock strata issues which has resulted in increase in total project cost to INR120.78 crore with revised expected COD of June 2017. Further, the rating remains constrained by the exposure of the company's cash flows to hydrology risks in the absence of deemed generation clause in case of shortage of water resources. Also, the rating remains tempered by the moderately leveraged project funding with debt to equity mix of ~1.3:1 and corresponding financial risk involved in case of commencement of debt repayment prior to commencement of commercial operations. In addition, ICRA also notes that the company's ability to tie up customers, given that no Power Purchase Agreement (PPA) is in place as on date, is critical for the project's viability. The rating, however, continues to positively factor in the general supply-demand gap in the power sector which is likely to ensure healthy offtake notwithstanding the fact that PPA is not tied up at the moment; and location of the plant in Karnataka state where there are relatively more supportive regulations for open access and banking for hydro power projects. The rating also positively factors in the accessibility to the financial and managerial strengths and technical knowhow of Soham Group which ensures optimal usage of resources. Further, the project is also eligible for INR3.50 crore of capital subsidy which is expected to improve its viability to a certain extent. Going forward, ability of the company to commence commercial operations without any time and cost over runs remains the key rating sensitivity. In the event of shortfall in accruals to cater to debt obligations, the ability of the group to infuse funds on a timely basis remains critical going forward. Sahasralingeshwara Power Private Limited (SPPL) is part of the Soham group which was incorporated in the year 1991 with diverse interests in Renewable Energy Generation, Business Investments and Infrastructure Development. With 53.5 MW of operational hydel projects and one 12.5 MW of hydel project under construction, the main focus of the group is renewable power generation in India. SPPL is currently undertaking the construction of a mini hydel project-Nekkiladi Mini Hydel Scheme (NMHS)-near Nekkiladi Village in Karnataka. The project is a gated diversion weir being built across Kumaradhara River with a capacity of 12.5 MW of power generation per annum. The total project cost is INR120.78 crore(includes cost overrun of ~Rs. 30 crore), with the civil works being undertaken by Mukthar Infrastructure Private Limited, Electro Mechanical Works provided by BFouress Private Limited and Hydro Mechanical works by Meclin Infrastructure Private Ltd. The project is expected to be operational by June 2017(time overrun of ~3 years). SPPL is a 100% subsidiary of Ambuthirtha Power Private Limited (rated [ICRA]BBB(Stable)), another Soham group entity which is also into generation of hydro power with its 22 MW Mahatma Gandhi Hydro electric (MGHE) Tail race scheme. SAHYADRI HEALTHCARE: CRISIL Reaffirms B+ Rating on INR105MM Loan ---------------------------------------------------------------- CRISIL's rating on the long-term bank facilities of Sahyadri Healthcare and Diagnostics Private Limited (SHD) continues to reflect its below-average financial risk profile because of weak debt protection metrics, small networth, stretched liquidity, and moderate gearing. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Long Term Bank Loan Facility 20.5 CRISIL B+/Stable (Reaffirmed) Term Loan 105.0 CRISIL B+/Stable (Reaffirmed) This rating weakness is partially offset by the benefits SHD derives from its association with Narayana Health Pvt Ltd (NHPL) for management of its hospital venture; the rating also factors in the support received from its promoters. Outlook: Stable CRISIL believes SHD will continue to benefit over the medium term from its association with NHPL. The outlook may be revised to 'Positive' if significantly high accrual and additional infusion by promoters result in improvement in the financial risk profile, especially liquidity. Conversely, the outlook may be revised to 'Negative' if sizeable, debt-funded capital expenditure or considerably lower than expected accrual weakens its ability to service debt. SHD was incorporated in 2009, and is promoted by Mr. Raghavendra Yeddyurappa and Mr. Vijayendra Yeddyurappa. The company has set up a multi-speciality hospital in Shimoga. SHD has tied up with NHPL (promoted by Dr. Devi Prasad Shetty) for management of its hospital, which commenced operations in November 2012. SAMALESWARI EDUCATION: CRISIL Reaffirms B- Rating on INR98MM Loan ----------------------------------------------------------------- CRISIL's rating on the long-term bank facilities of Samaleswari Education Trust (SET) continues to reflect the trust's average financial risk profile because of average gearing and modest debt protection metrics, small scale of operations, and susceptibility to regulatory changes in the education sector. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Proposed Long Term Bank Loan Facility 98 CRISIL B-/Stable (Reaffirmed) Rupee Term Loan 80 CRISIL B-/Stable (Reaffirmed) The rating also factors in weak liquidity owing to insufficient cash accrual from operations to meet term debt obligations, and moderately utilised working capital limit. These rating weaknesses are partially offset by the extensive experience of the trust's promoters in the education sector, and benefits expected from the favourable demand prospects for the sector over the medium term. Outlook: Stable CRISIL believes SET's liquidity will remain constrained over the medium term due to inadequate cash accrual to meet debt obligations. The outlook may be revised to 'Positive' if there is a substantial increase in occupancy at the trust's institute, thereby significantly improving its surplus and cash accrual. Conversely, the outlook may be revised to 'Negative' if liquidity deteriorates significantly because of inadequate funding support from promoters, a decline in surplus resulting in low cash accrual, or major debt-funded capital expenditure. Set up in 2008, SET operates an engineering institute, Silicon Institute of Technology, which provides an engineering degree (Bachelor of Technology) in five streams: computer science, civil, electrical, electronics and communication, and mechanical. The institute is located in Sambalpur. It is affiliated to the Biju Patnaik University of Technology and all its courses are approved by the All India Council for Technical Education. Currently, the trust is managed by Mr. Ramanand Mishra, managing trustee, and Mr. Sanjeev Nayak, vice chairperson. SANDHYA POULTRY: CRISIL Assigns 'B' Rating to INR104.5MM Loan ------------------------------------------------------------- CRISIL has assigned its 'CRISIL B/Stable' rating to the long-term bank facilities of Sandhya Poultry Farms (SPF) Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 20 CRISIL B/Stable Rupee Term Loan 104.5 CRISIL B/Stable The rating reflects SPF's modest financial risk profile because of low networth, high gearing and weak debt protection metrics, exposure to project risk and average scale of operations. These weaknesses are mitigated by the partners' experience in the poultry industry. Outlook: Stable CRISIL believes SPF will continue to benefit from the partners' experience. The outlook may be revised to 'Positive' if significant growth and sustenance in revenue and operating margin result in better-than-expected cash accrual. Conversely, the outlook may be revised to 'Negative' if significantly low cash accrual, stretched working capital cycle, or large, debt-funded capital expenditure weakens financial risk profile. Registered in 1997, SPF is a family-run poultry farm in Telangana. It is managed by the Narsi family and was started by Mr. A Narsimulu. The firm had a poultry farm consisting of 1 lac chickens; it has been recently expanded to 4 lac chickens. SHIVAM PIPE: ICRA Assigns B- Rating to INR5.5cr Cash Loan --------------------------------------------------------- ICRA has assigned a long-term rating of [ICRA]B- to the INR3.50 crore1 term loan, the INR5.50 crore cash credit facility and the INR2.00 crore non-fund based facility of Shivam Pipe Industries. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loan 3.50 [ICRA]B- assigned Cash Credit 5.50 [ICRA]B- assigned Non-Fund Based Limit 2.00 [ICRA]B- assigned The rating takes into account SPI's high working capital intensity due to a high receivable period and high inventory holding, leading to a stretched liquidity position as reflected by a high utilization of working capital limits. ICRA notes the expected large debt funded capital expenditure, which is likely to keep cash flows under pressure in the near term. ICRA also notes that the early stage of execution of the project undertaken by SPI exposes it to project execution risks. The rating further takes cognizance of SPI's improving, but low capacity utilization, leading to a moderate scale of current operations as well as an adverse impact on business returns. Another rating concern is the inherent cyclicality in the steel industry, which is likely to keep profitability and cash flows volatile in future. In addition, ICRA takes note of the risks associated with the partnership nature of the firm, which includes the risk of capital withdrawal. The rating, however, derives comfort from the moderate experience of the promoters in the mild steel (MS) pipe manufacturing industry. ICRA also notes SPI's eligibility for fiscal incentives under the North Eastern Industrial and Investment Promotion Policy (NEIIPP) 2007 scheme, which is likely to support profitability, going forward, and the promoter's demonstrated support in extending interest free unsecured loans. SPI is a partnership firm promoted by the Guwahati-based Mr. Ratan Lal Bhati. It commenced operations from 2012. SPI has a manufacturing capacity of 12,000 metric tons per annum (mtpa) of mild steel pipes and steel tubular poles at its facility at Kamalpur in Guwahati, Assam. Recent Results In FY2015, SPI reported a profit after tax (PAT) of INR1.14 crore on an operating income (OI) of INR28.09 crore, as compared to a PAT of INR0.05 crore on an OI of INR18.48 crore in FY2014. SHREE ASHAPURA: CRISIL Suspends C Rating on INR50MM Cash Loan ------------------------------------------------------------- CRISIL has suspended its rating on the bank facility of Shree Ashapura Stevedores and Cargo Carriers Private Limited (SASCC). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 50 CRISIL C The suspension of rating is on account of non-cooperation by SASCC with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, SASCC is yet to provide adequate information to enable CRISIL to assess SASCC's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings'. Incorporated in 2010, SASCC is engaged in providing various kinds of shipping solutions such as cargo handling, custom clearances, stevedoring activities, and inland/external transportation of cargo. The operations are carried out at the Kandla (Gujarat) and Visakhapatnam (Andhra Pradesh) ports. The company has its registered office located at Gandhidham (Gujarat). SHREE COTEX: ICRA Reaffirms B Rating on INR7cr Cash Loan -------------------------------------------------------- ICRA has reaffirmed the [ICRA]B rating assigned to the INR8.78 crore long term fund based facilities of Shree Cotex. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit facility 7.00 [ICRA]B reaffirmed Term Loan 1.78 [ICRA]B reaffirmed The reaffirmation of rating factors in Shree Cotex's (SC) small scale and limited track record of operations and weak financial profile as is reflected in its low net profitability, stretched capital structure and weak coverage indicators. The rating is further constrained by the highly competitive and fragmented industry structure owing to low entry barriers and vulnerability to raw material prices, which are subject to seasonality, crop harvest and regulatory risks with regard to MSP for raw cotton fixed by GoI. ICRA also notes that SC is a partnership concern and any substantial withdrawal from capital account in future could adversely impact the credit profile of the firm. The rating however, continues to favourably factor in the long standing experience of the partners in the business and favourable location of SC's manufacturing facility in Rajkot giving it easy access to raw cotton. Shree Cotex (SC) was set up as a partnership firm in the year 2013 with the operating commencing from July 2014. It is engaged in the business of manufacturing cotton bales and cotton seeds through the ginning and pressing of raw cotton (kapas). The firm's manufacturing facility is located at Rajkot, Gujarat and is equipped with 30 ginning and 1 pressing machine with the processing capacity of ~13,759 Metric Tonnes (MT) of raw cotton annually (Considering 182 working days in a year). Recent Results For the year ended on March 31, 2015, the firm reported an operating income of INR23.76 cr. and profit after tax of INR0.17 cr. Further, the firm has achieved a turnover of INR18.34 crore in current financial year till 31st December 2015 (provisional numbers). SHREE RENUKA: ICRA Lowers Rating on INR2,949cr Loan to 'D' ---------------------------------------------------------- ICRA has downgraded the long-term rating of [ICRA]BB with Negative outlook and the short-term rating of [ICRA]A4 to [ICRA]D outstanding on the bank facilities of Shree Renuka Sugars Limited (SRSL) aggregating to INR6,513.47 crore (revised from INR6,299.92 crore). Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loans 1,744.47 [ICRA]D downgraded Fund Based Limits 2,949.00 [ICRA]D downgraded Non-Fund Based Limits 1,820.00 [ICRA]D downgraded The downgrade of ratings takes into account the delays in debt servicing by the company in recent past owing to stretched liquidity position arising from inadequate accruals from core operations and high debt repayment obligations. The depressed sugar prices prevalent during Sugar Year (SY)3 2015 coupled with the high sugarcane costs have widened the company's PBIT4 level losses in the sugar business to INR210.8 crore for 9m-FY2016 as against losses of INR84.4 crore for 9m-FY2015. With high interest burden along with forex losses, the company's net losses too increased sharply. A Joint Lenders' Forum (JLF) has been formed to review the company's refinancing package wherein it has sought additional term loans. While most of the banks have approved the package, the timely disbursement of the same would remain important from a credit perspective. The ratings continue to remain impacted by the weak consolidated financial profile of the company as poor weather conditions in Brazil and increased liabilities on USD denominated loans due to depreciation of the Brazilian currency have affected the company's plans of turning around its Brazilian subsidiaries in the sugar business. In September 2015, the Brazilian subsidiaries had filed for bankruptcy protection and the management is currently in discussions with the lenders for restructuring of the loans on the books of the Brazilian subsidiaries. The ratings also take into account the risks arising out of the inherent cyclicality in sugar business, exposure to agro-climatic risks and vulnerability to regulatory policies, apart from the exposure to price fluctuations for the company's trading business. ICRA has also taken note of the sizeable amount of corporate guarantees extended by SRSL to its subsidiaries. ICRA however positively notes the recovery in the sugar prices seen over the past 4-5 months supported by the reduced estimates on domestic sugar production for SY2016 along with the higher export quantity of 40 lakh MT mandated by the Central Government. At the current prevailing sugar prices and cane costs, the sugar business is profitable for the company which would aid in improving its liquidity position. Nonetheless, a prolonged period of healthy sugar realisations would remain important for a turnaround in the company's financial profile. ICRA also positively notes the company's complete forward integration into distillery and co-generation operations and advantage of being located in Maharashtra and Karnataka states that are regions with high recovery rates, long crushing season and relatively flexible Fair & Remunerative Price (FRP) based cane price regime. Shree Renuka Sugars Limited (SRSL) is one of the largest private sector sugar manufacturers in the country, promoted by first generation entrepreneurs, viz. Murkumbi family, with a combined crushing capacity of about 42,000 TCD (across seven units) in India and 59,520 TCD (across four units) in Brazil. The plants in India are located in the states of Maharashtra and Karnataka. The company has significant presence in South Brazil through acquisitions of Renuka Vale do Ivai in March 2010 (100% owned) and Renuka do Brasil (formerly Euipav Acucar e Alcohol) in July 2010 (50.34% stake, which was increased to 59.4%5 by March 2012). SRSL has been one of the first mills to be fully forward integrated into distillery (using molasses, a by-product of sugar) and co-generation (based on bagasse) operations. SRSL mainly manufactures fuel grade ethanol that can be blended with petrol. Global distillery capacity of SRSL is 4,160 KL per day (KLPD) with Indian distillery capacity at 930 KLPD (630 KLPD from molasses to ethanol and 300 KLPD from rectified spirit to ethanol) and Brazil distillery capacity at 3,230 KLPD. The company has a total co-generation capacity of 584 MW with a total exportable surplus of 356 MW. The company also carries out refining activity, i.e. conversion of raw sugar to white sugar, from its 2,500 TPD unit at Haldia (West Bengal) and 3,000 TPD unit at Kandla (Gujarat). Renuka Vale do Ivai was previously a distressed Brazilian sugar and ethanol producer with a total crushing capacity of 3.1 million MT per annum and it has strategic stake in warehouses and loading facilities at Paranagua port in Brazil. Renuka do Brasil has sugar/ethanol mills with integrated co-generation facilities. It has about 10.5 million MT annual crushing capacity along with co-generation capacity of 295 MW. For FY2015, SRSL reported net loss of INR295.1 crore on an operating income of INR5,744.2 crore. For 9m-FY2016, SRSL has reported net loss of INR505.5 crore on an operating income of INR4,044.2 crore (unaudited). On a consolidated basis, for FY2015, SRSL reported net loss of INR1,813.6 crore on an operating income of INR10,087.6 crore. SHRI BANKE: ICRA Assigns B- Rating to INR5.0cr Cash Loan -------------------------------------------------------- ICRA has assigned a long term rating of [ICRA]B- to the INR5.00 crore1 cash credit facility, the INR0.35 crore non-fund based facilities and the INR4.65 crore unallocated limit of Shri Banke Bihari Polyfab Private Limited. The above unallocated limit of INR4.65 crore has also been rated on a short term scale for which an [ICRA]A4 rating has been assigned. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit 5.00 [ICRA]B- assigned Non Fund Based facilities 0.35 [ICRA]B- assigned Unallocated limit 4.65 [ICRA]B-/[ICRA]A4 assigned The ratings take into consideration the significant decline witnessed in operating profitability during FY2014 and FY2015 owing to adverse market conditions and adverse financial profile characterized by nominal profit and cash accrual from core operations leading to weak debt coverage indicators. This is reflected by an interest cover of around 0.06 time and net cash accruals relative to total debt of 17% as on March 31, 2015. ICRA notes that the expected debt funded capacity expansion is also likely to deteriorate capital structure and interest cover. The ratings also take cognizance of the high working capital intensive nature of SBBP's operations, which adversely impacts its liquidity position. Its high sectoral concentration risk is another concern, since almost the entire revenue is generated by the cement industry. The ratings also take into account the highly fragmented nature of the industry, characterized by a large number of players; the limited product differentiation, which in turn leads to intense competition and keeps margins under check; and the small scale of operations of the company at present. The ratings, however, derive comfort from the moderate experience of the promoters in the plastic packaging industry. ICRA notes the established relationships enjoyed by SBBP with its reputed clients that result in repeat orders and minimizes counterparty risks to a large extent. The demonstrated ability of the promoters to regularly infuse equity to support business operations is another rating comfort. ICRA also notes that trading of PP granules is likely to support profitability to an extent during FY2016. Shri Banke Bihari Polyfab Private Limited (SBBP), incorporated in 2008, began operations from April 2010 as a manufacturer of High Density Polyethylene (HDPE) woven sacks and cement bags. At present, the company has an installed production capacity of 3,100 MTPA for HDPE woven fabric at its manufacturing facility at Burdwan, West Bengal. The company also trades in various commodities based on market opportunities. In FY2015, SBBP also started trading in Polypropylene (PP) granules. Recent Results In FY2015, SBBP reported a profit after tax (PAT) of INR0.10 crore on an operating income (OI) of INR27.61 crore, as compared to a PAT of INR0.18 crore on an OI of INR26.10 crore in FY2014. SNQS INTERNATIONAL: ICRA Reaffirms B+ Rating on INR5cr LT Loan -------------------------------------------------------------- ICRA has reaffirmed the long term rating at [ICRA]B+ outstanding on the INR3.00 crore (revised from nil) term loans, INR5.00 crore (revised from INR10.00 crore) fund based facilities and INR6.00 crore fund based sub-limits facilities of SNQS International Socks Private Limited. ICRA has also withdrawn the short-term rating of [ICRA]A4 outstanding on the INR2.00 fund based facilities of the Company. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Long term: Term loan facilities 3.00 [ICRA]B+ reaffirmed Long Term: Fund Based Facilities 5.00 [ICRA]B+ reaffirmed Long term: Fund based (sublimit) facilities (6.00) [ICRA]B+ reaffirmed Short term: Non- Nil [ICRA]A4 withdrawn fund based (revised from 2.00) facilities The ratings continue to factor in the significant experience of the promoters in the textile industry and the Company's strong ties with established retail chains in Europe through S.N.Q.S International (parent), a key sourcing agency which provides revenue visibility in the medium term. The ratings favorably consider the growth in revenues of the company in 2014-15 aided by the healthy growth in volumes and scale up of trading operations, and the improvement in profitability on the back of various cost control measure undertaken by the management. The rating also factors in the improvement in debt metrics following the reduction in debt levels, though the same continue to be stretched. The ratings are however, constrained by the small scale of operations with earnings being vulnerable to fluctuations in raw material prices and power costs. The ratings are also constrained by the stretched liquidity position owing to the working capital intensive nature of operations with high inventory and receivable periods. Going forward, the ability of the company to improve its scale of operations and subsequently improve its earnings and liquidity position would be the key rating sensitivities. SNQS International Socks Private Limited was formed by the take- over of a company called M/s Jeyalakshmi Associates, which was started in 1993 and was part of Lakshmi Machine Works (LMW) group. Post take-over in 2001, Mr. Elangovan, the Managing Director decided to convert the company into a 100% export oriented unit to manufacture and export socks. The company has its production unit in Coimbatore with an installed capacity of ~ two million dozen pairs of knitted socks per annum The company exports mainly to major brands/retailers in US and Europe and also to some domestic branded manufacturers. The Company has begun trading operations since 2013-14. Recent Results SNQS Socks reported a net profit of INR0.4 crore on an operating income of INR27.8 crore in 2014-15, as against a net loss of INR0.9 crore on an operating income of INR19.0 crore for 2013-14. SOHAM MANNAPITLU: ICRA Reaffirms B+ (SO) Rating on INR54.4cr Loan ----------------------------------------------------------------- ICRA has reaffirmed the long-term rating of [ICRA]B+(SO) assigned to INR54.40 crore term loan of Soham Mannapitlu Power Private Limited. The letters SO in parenthesis suffixed to a rating symbol stands for Structured Obligation. An SO rating is specific to the rated issue, its terms, and its structure. SO rating does not represent ICRA's opinion on the general credit quality of the issuers concerned. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loan 54.40 [ICRA]B+(SO) reaffirmed ICRA has factored in the comfort drawn from the pledge of 30% of SMPPL's shares held by the parent Ambuthirtha Power Private Limited (APPL rated [ICRA]BBB(Stable)) in favour of the lender and also from the Non-Disposal Undertaking-Power of Attorney (NDU-POA) on balance 70% of SMPPL's shares held by APPL to the lender. The pledge agreement and NDU POA covers the principal and interest payment obligations on the rated debt. Soham Mannapitlu Power Private Limited (SMPPL) is promoted by the Soham Group which was incorporated in the year 1991 and currently has interests in Renewable Energy Generation, Business Investments and Infrastructure Development. With 53.5 MW of operational hydel projects and one 12.5 MW hydel project under construction, the main business activity of the group has been renewable power generation in India. SMPPL is an Independent Power Producer (IPP) which operates a 15 MW run of the river hydel power plant on River Puchamugaru, in the Dakshina Kannada District of Karnataka. Earlier, SMPPL was 100% held by Soham Renewable Energy India Private Limited (SREIPL rated [ICRA]B) which is the flagship company of the Soham group. However, in October 2011, the entire stake of SMPPL was bought by Ambuthirtha Power private Limited (APPL rated [ICRA]BBB(Stable)) for INR20.78 crore, pursuant to which SMPPL became a 100% subsidiary of APPL.In FY 2015, the company generated a PLF of 21.7% as against 24.9% in FY 2014. About Ambuthirtha Power Private Limited: Ambuthirtha Power Private Limited(APPL) operates a 22 MW containment run of the river hydel power plant located near Jog Falls in the Shimoga district of Karnataka under the Mahatma Gandhi Hydro electric (MGHE) Tail race scheme. Soham Renewable Energy India Private Limited holds 100% stake in APPL. The company has two 100% subsidiaries namely SMPPL and Sahasralingeshwara Power Private Limited(SPPL) which is into construction of a 12.5 MW hydel power plant in Karnataka. As per audited financials for FY2015, APPL achieved Operating Income (OI) of INR46.39 crore and Profit after Tax (PAT) of INR16.73 crore as against OI of INR37.29 crore and PAT of INR10.51 crore in FY2014. SOHAM PHALGUNI: ICRA Reaffirms 'B' Rating on INR35.23cr Loan ------------------------------------------------------------ ICRA has reaffirmed the long-term rating of [ICRA]B assigned to INR35.23 crore term loan of Soham Phalguni Renewable Energy Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loan 35.23 [ICRA]B reaffirmed The reaffirmation of rating is constrained by the lower than expected performance of the Mulibettu project post commencement of operations in June 2015 owing to subdued monsoons during the year. While ICRA notes that repayment of debt obligations commenced in July 2015 for the company, the same was catered to through funding support from the Soham group. Further, the rating remains constrained by the relatively high capital cost of the project, and the exposure of the company's cashflows to hydrology risks due to absence of deemed generation clause in case of shortage of water resources. The rating, however, continues to positively factor in the presence of Power Purchase Agreement (PPA) of the company with Mangalore Electricity Supply Company Limited (MESCOM) which ensures healthy off take of power; and the location of the plant in Karnataka state where there are relatively more supportive regulations for open access and banking for hydro power projects. In addition, the rating continues to positively factor in access of SPREPL to the financial and managerial strengths and technical knowhow of Soham Group which ensures optimal usage of resources. Further, the project is also eligible for INR3.10 crore of capital subsidy which is expected to improve its viability to a certain extent. The ability of the company to generate commensurate accruals for repayments by generating healthy quantum of power remains the key rating sensitivity from credit perspective. In the event of shortfall in accruals to cater to debt obligations, the ability of the group to infuse funds on a timely basis remains critical going forward. Soham Phalguni Renewable Energy Private Limited (SPREPL) is part of the Soham group which was incorporated in the year 1961 with diverse interests in Renewable Energy Generation, Business Investments and Infrastructure Development. With 53.5 MW of operational hydel projects and one 12.5 MW hydel project under construction, the main business activity of the group has been renewable power generation in India. SPREPL is currently operating the Mulibettu Mini Hydel Scheme (MMHS)-located 1 km east from the village of Mannapitlu, Karnataka. The project is a gated diversion weir being built across the river Phalguni with a capacity of 10.5 MW of power generation per annum and has commenced commercial operations in June 2015. SOHAM RENEWABLE: ICRA Reaffirms 'B' Rating on INR38.7cr Loan ------------------------------------------------------------ ICRA has reaffirmed the long-term rating of [ICRA]B assigned to INR38.70 crore1 term loan of Soham Renewable Energy India Private Limited. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Term Loan 38.70 [ICRA]B reaffirmed The reaffirmation of rating is constrained by the lower than expected performance of the Mahadevapura Mini Hydel Scheme (MMHS) in the on-going FY 2016 due to subdued monsoons and delay in completion of left bank weir work in September 2015(as against expected timeline of June 2015). While ICRA notes that repayment of term obligations for the project has been supported by equity infusion despite lower revenue in-flow in the project, the ability of the group to infuse funds on a timely basis going foward in case of a shortfall in accruals to cater to repayments remains crucial, given that the project is yet to demonstrate consistent performance in terms of power generation. Further, the rating continues to remain constrained by the high capital cost(Rs.11.28 crore/MW) of the project, and exposure of SREIPL's cashflows to hydrology risks as the project is not covered under any deemed generation clause in case of loss of generations due to shortage of water. In addition, the rating remains tempered by the open tenor nature of the PPA with Tanglin Developments Limited (TDL), mitigated to a certain extent by the demand-supply gap in Karnataka; and the sizeable capacity expansion plan of the Soham group which is likely to entail fungibility of monetary resources across various entities in the group. The rating, however, positively factors in the receipt of INR25 crore equity in SREIPL from strategic investors in FY 2015 which has eased funding requirements for the group, and the eligibility of the MMHS project for receipt of capital subsidy of INR2.2 crore which is likely to improve its viability. The rating continues to positively consider the financial and managerial strengths and technical knowhow of Soham Group which ensures optimum usage of resources with in-house operation and maintenance activities, and the ability of the group to raise funds from various strategic investors in order to meet its funding requirements. Going forward, the company's ability to cater to debt repayment obligations in a timely manner by achieving consistent generations and thereby stable revenue in-flow remains the key rating sensitivity. Incorporated in November 1991, Soham Renewable Energy India Private Limited (SREIPL) is the flagship company of Soham group which has interests in Renewable Energy Generation, Business Investments and Infrastructure Development. With 53.5 MW of operational hydel projects and one 12.5 MW of hydel project under construction, the main business activity of the group has been renewable power generation in India. SREIPL operates a mini hydel power project (MMHS) located 2 km from the village of Mahadevapura, Mandya District, Karnataka. The project is a gated diversion weir being built across the river Cauvery with a capacity of 6 MW of power generation per annum. The project has achieved partial COD in March 2014 and full scale operations in September 2015 post completion of left bank weir work. SRI RAMA: CRISIL Suspends B+ Rating on INR129MM LT Loan ------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of Sri Rama Textile Spinning Mills Limited (SRTSML). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 40 CRISIL B+/Stable Letter of Credit 30 CRISIL A4 Proposed Long Term Bank Loan Facility 129 CRISIL B+/Stable The suspension of ratings is on account of non-cooperation by SRTSML with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, SRTSML is yet to provide adequate information to enable CRISIL to assess SRTSML's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings'. SRTSML, established in 2005, manufactures cotton yarn. Its day- to-day operations are managed by its director Mr. P Muthuswamy. SRI VYJAYANTHI: CRISIL Suspends 'D' Rating on INR25MM Term Loan --------------------------------------------------------------- CRISIL has suspended its ratings on the bank facilities of Sri Vyjayanthi Labs Private Limited (SVLPL). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 2.5 CRISIL D Cash Credit 20 CRISIL D Letter of Credit 10 CRISIL D Proposed Long Term Bank Loan Facility 10.5 CRISIL D Term Loan 25 CRISIL D The suspension of ratings is on account of non-cooperation by SVLPL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, SVLPL is yet to provide adequate information to enable CRISIL to assess SVLPL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key factor in its rating process as outlined in its criteria 'Information Availability - a key risk factor in credit ratings'. SVLPL is promoted by Mr. V Satyanarayana Raju and Mrs. M. Sridevi. The company has its manufacturing facility at Parvada (Andhra Pradesh). It manufactures mineral and drugs, which are supplied to various pharmaceutical companies. SYSTEM CONTROL: ICRA Assigns B+ Rating to INR3.75cr Cash Loan ------------------------------------------------------------- ICRA has assigned long term rating of [ICRA]B+ to INR3.75 crore cash credit facility, INR2.00 crore non-fund based facilities and INR0.25 crore term loan of System Control & Automation Private Limited. The non-fund based facilities have also been rated on short-term scale for which ICRA has assigned the short term rating of [ICRA]A4. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash credit 3.75 [ICRA]B+ assigned Non-fund based Facilities 2.00 [ICRA]B+/[ICRA]A4 assigned Term loan 0.25 [ICRA]B+ assigned The ratings take into account the fragmented nature of the industry and low entry barriers leading to intense competition from various organised and unorganised players which has adversely impacted the operating profitability of the company during the last three financial years and high dependence on creditor funding to manage stretched liquidity position which has resulted in high total outside liabilities relative tangible net worth ratio which stood at 4.78 time as on March 31, 2015. High utilisation of working limit further highlights the stretched liquidity position of the company. The ratings also consider vulnerability of the company to client concentration risk with high revenue dependence on a single entity, i.e CESC Ltd, and small scale of operations at present. However, long standing relationship with the client mitigates the client concentration risk to an extent. The ratings, however, derive comfort from significant growth in turnover of the company during the last two financial years owing to increase in order execution, established experience of the promoters with long track record of more than two decades in the control and relay panel board industry and long established relationship with reputed supplier base like Alstom India Ltd and Siemens Ltd. Incorporated in 1993, SCAPL is engaged in manufacturing of electrical relay and control panel. The manufacturing facility is located at Beleghata CIT more. SCAPL is authorised Original Equipment Manufacturer (OEM) of Alstom India Ltd and Value Added Reseller (VAR) partner of Siemens Ltd. The promoters have experience of more than two decades the control and relay panel board industry. SCAPL has reputed clientele comprising both public and private sector players. Recent Results In 2014-15, SCAPL reported a profit after tax (PAT) of INR0.37 crore on an operating income of INR26.39 crore as compared to a PAT of INR0.29 crore on an operating income of INR21.29 crore in 2013-14. T. ASOKAN: CRISIL Reaffirms B+ Rating on INR50MM Cash Loan ---------------------------------------------------------- CRISIL's ratings on the bank facilities of T. ASOKAN (TA) continue to reflect TA's modest scale of operations in the intensely competitive civil construction segment, and below- average financial risk profile marked by a small net worth. These weaknesses are mitigated by the proprietor's extensive experience. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 30 CRISIL A4 (Reaffirmed) Cash Credit 50 CRISIL B+/Stable (Reaffirmed) Proposed Working Capital Facility 40 CRISIL B+/Stable (Reaffirmed) Outlook: Stable CRISIL believes TA will benefit over the medium term from its proprietor's experience. The outlook may be revised to 'Positive' if scale of operations increases significantly while maintaining operating profitability, or working capital management improves, resulting in better financial risk profile. Conversely, the outlook may be revised to 'Negative' if decline in cash accrual or inefficient working capital management weakens financial risk profile, especially liquidity. TA is a Kozhikode-based civil contractor. Its operations are managed by its proprietor, Mr. T Asokan. TA reported, on a provisional basis, a profit after tax ( PAT) of around INR2 million on net sales of around INR63 million in 2014- 15(refers to FY April 1 to March 31) as against a PAT of INR 2 million on net sales of INR73 million for 2013-14. TANEJA VIDYUT: ICRA Lowers Rating on INR3.5cr Loan to B+ -------------------------------------------------------- ICRA has revised its long term rating on the INR3.50 crore fund based limits of Taneja Vidyut Control Pvt. Ltd. to [ICRA]B+ from [ICRA]BB-(Stable). ICRA has reaffirmed its short term rating on the company's INR3.50 crore non fund based limits at [ICRA]A4. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Fund Based Limits 3.50 [ICRA]B+; revised from [ICRA]BB- (Stable) Non Fund Based Limits 3.50 [ICRA]A4; reaffirmed The revision in the long term ratings is driven by the sharp increase in TVCPL's working capital intensity due to a build-up of receivables and high inventory days. ICRA has also taken note of the increase in receivables of more than 6 months, on account of delayed payments from TVCPL's clients-Unitech Developers and Projects Limited and JMD Limited. The inventory days are high on account of work being carried out at multiple sites. The increased working capital intensity has resulted in a stretched liquidity position, with the utilization of the bank limits at near full levels. The ratings also take into account the company's modest scale of operations and its dependence on customer clearances, resulting in volatility in revenues and working capital requirements. The ratings are further constrained by the low entry barriers and fragmented industry structure, coupled with competition from organized and unorganized players. The ratings, however, find support from the long standing experience of the promoters in the electrical industry, established relationships with its key customers and healthy order book position which provides future revenue visibility. Going forward, timely completion of the pending order book as well as TVCPL's ability to augment its scale of operations, while improving profitability and effective management of its working capital requirements, with timely realization from its customers, will be the key rating sensitivities. Taneja Vidyut Control Private Limited (TVCPL) was incorporated in 1999 by Mr. Anil Taneja and Ms. Ritu Taneja. TVCPL is engaged in executing Engineering, Procurement and Construction (EPC) projects on turnkey basis, for installation of sub-station transmission lines and distribution substations, HT/LT electrical wiring for hotels, hospitals, residential and commercial real estate etc. The company operates mainly in the National Capital Region (NCR), Punjab and West Bengal. Recent Results TVCPL has reported a net profit (PAT) of INR0.48 crore on an operating income of INR25.89 crore in FY 2014-15, as compared to net profit of INR0.50 crore on an operating income of INR29.39 crore in the previous year. TIRUPATI IRON: CRISIL Lowers Rating on INR65MM Loan to B+ --------------------------------------------------------- CRISIL has downgraded its rating on the long term bank facilities of Tirupati Iron India Private Limited (TIIPL) to 'CRISIL B+/Stable' from 'CRISIL BB-/Stable'. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 65 CRISIL B+/Stable (Downgraded from 'CRISIL BB-/Stable') Proposed Long Term 55 CRISIL B+/Stable (Downgraded Bank Loan Facility from 'CRISIL BB-/Stable') The rating downgrade reflects deterioration in TIIPL's liquidity and financial profiles on the back of a continued stretch in its working capital cycle. The company's working capital requirements have increased on account of growth in its scale of operations and continued elongation in its working capital cycle, which has led to full utilization in its bank lines. The company's revenue grew by 20 per cent in 2014-15 to INR425 million. The company had gross current assets of 141 days as on March 31, 2015 with debtor levels of 88 days. The growing scale of operations along with low cash accruals' generation led to an increased reliance on bank debt. As a result, company's total outside liabilities to tangible net worth (TOL/TNW) ratio increased to 5.12 times as on March 31, 2015 from 4.83 times a year ago. The working capital management will remain a key rating sensitivity factor affecting the liquidity and financial profiles over the medium term. CRISIL's rating on the bank facilities of TIIPL continues to reflect TIIPL's long-standing presence and its promoters' extensive experience in trading of iron and steel products. These rating strengths are partially offset by TIIPL's below-average financial risk profile marked by small net worth, weak capital structure and average debt protection metrics, driven by working- capital-intensive operations and low profitability. The ratings also factor in the company's modest scale of operation in the highly fragmented and intensely competitive industry. Outlook: Stable CRISIL believes that TIIPL will continue to benefit over the medium term from the extensive industry experience of its promoters. The outlook may be revised to 'Positive' if TIIPL demonstrates a material improvement in its liquidity and financial profiles most likely on the back of improvement in its working capital cycle or infusion of funds into the company. Conversely, the outlook may be revised to 'Negative' if company's financial risk profile particularly liquidity deteriorates further, most likely caused by pressure on profitability, and stretch in its working capital cycle. Incorporated in 2002 by Mr. Ashok Kumar Gupta, TIIPL trades in iron and steel products. The company's product profile comprises hot-rolled coils, thermo-mechanically treated (TMT) bars, MS angles, MS channels and other structural steel products. The company is based out of Bhopal (Madhya Pradesh) and has two warehouses of its own at Bhopal and one at Raipur (Chhattisgarh). URJA TECH: CRISIL Reaffirms B Rating on INR160MM Cash Loan ---------------------------------------------------------- CRISIL's ratings on the bank facilities of Urja Tech (UT; part of Urja Group) continues to reflect Urja Group's modest scale of operations, tender-based nature of business, and working-capital- intensive operations. These rating weaknesses are partially offset by the benefits that the extensive experience of Urja Group's promoters in the civil construction business. Amount Facilities (INR Mln) Ratings ---------- --------- ------- Bank Guarantee 60 CRISIL A4 (Reaffirmed) Cash Credit 160 CRISIL B/Stable (Reaffirmed) For arriving at the ratings, CRISIL has combined the business and financial risk profiles of UT and Urja Infrastructure (UI). This is because both these entities, together referred to as Urja Group, share the same management team, are in a similar line of business, and have significant operational and financial linkages with each other. CRISIL has also treated the unsecured loans extended to the group by its promoters as neither debt nor equity, as these loans are expected to remain in the business over the medium term till the currency of bank borrowings. Outlook: Stable CRISIL believes that Urja Group will continue to benefit over the medium term from its promoters' extensive industry experience and its strong revenue visibility. The outlook may be revised to 'Positive' in case the group significantly improves its working capital management, leading to healthy improvement in its liquidity, while it maintains its debt protection metrics. Conversely, the outlook may be revised to 'Negative' in case Urja Group's liquidity deteriorates because of further lengthening of its working capital cycle or if the group undertakes a debt- funded capital expenditure programme. UI set up in 2006, and UT set up in 2009 as partnership firms by the Mumbai (Maharashtra)-based Jadhav family and the Nagpur (Maharashtra)-based Pagariya family. It undertakes civil construction works, mainly related to irrigation projects in Maharashtra. Both the firms are registered contractors with VIDC, Government of Maharashtra. The group's day-to-day operations are managed by Mr. Pramod Pagariya. VISHWAS COTTON: ICRA Assigns 'B' Rating to INR5.0cr Cash Loan ------------------------------------------------------------- ICRA has assigned the [ICRA]B rating to the INR5.00 crore cash credit facility and INR1.00 crore term loan facility of Vishwas Cotton Industries. Amount Facilities (INR crore) Ratings ---------- ----------- ------- Cash Credit 5.00 [ICRA]B assigned Term loan 1.00 [ICRA]B assigned The assigned rating factors in Vishwas Cotton Industries' moderate scale of operations and weak financial profile as reflected by low profitability, high gearing levels and weak coverage indicators. The rating is further constrained by the highly competitive and fragmented industry structure owing to low entry barriers, and vulnerability of firm's profitability to movements in raw material prices on account of seasonality and crop harvest. The rating also takes into account the firm's exposure to regulatory risks. ICRA also notes that VCI is a partnership firm and any significant withdrawals from the capital account would affect its net worth and thereby its capital structure. The rating, however, positively factors in the location advantage enjoyed by the firm by virtue of its location in the cotton- producing belt of Gujarat giving it easy access to raw cotton. Established in 2013 as a partnership firm, Vishwas Cotton Industries (VCI) is engaged in the ginning and pressing of raw cotton. The firm's manufacturing unit located at Tankara, Rajkot, is equipped with 24 ginning machines and 1 pressing machine with total installed capacity to produce 100 bales per day (considering 12 hours of operations per day). Recent Results For the financial year FY15, the firm reported an operating income of INR34.98 cr. and profit after tax of INR0.02 cr. against an operating income of INR27.71 cr. and profit after tax of INR0.07 cr. for the financial year FY14. Further during the current fiscal, the firm has achieved an operating income of INR21.34 cr and profit before depreciation and tax of INR0.39 cr. till 31st December 2015 (as per unaudited provisional financials). VISUELL CREATIONS: ICRA Suspends B- Rating on INR5cr Loan --------------------------------------------------------- ICRA has suspended [ICRA]B- rating assigned to the INR5.00 Crore fund based limits of Visuell Creations. ICRA has also suspended [ICRA]A4 (pronounced as ICRA A four) to the INR5.00 crore non fund based limits of the company. The suspension follows ICRA's inability to carry out a rating surveillance in the absence of the requisite information from the company. WEST INDIA: Ind-Ra Assigns 'IND BB+' Long-Term Issuer Rating ------------------------------------------------------------- India Ratings and Research (Ind-Ra) has assigned The West India Power Equipments Private Limited (WIPE) a Long-Term Issuer Rating of 'IND BB+'. The Outlook is Stable. A full list of rating actions is at the end of this commentary. KEY RATING DRIVERS The ratings factor in WIPE's tight liquidity, as evidenced by its average working capital utilisation of about 96% during the 12 months ended February 2016. The ratings also factor in WIPE's high customer concentration risk (84% of its FY15 revenue came from its top 5 customers) and its presence in the highly competitive automobile industry. WIPE's scale of operations was moderate at INR1,580 million in FY15 (FY14: INR1,367 million). However, the ratings are supported by WIPE's comfortable credit metrics, as depicted by its gross interest coverage of 3.33x in FY15 (FY14: 2.99x) and net leverage of 1.92x (2.29x). The ratings further draw comfort from WIPE's long operational record and its promoters' experience of almost three decades in the auto parts business. RATING SENSITIVITIES Negative: Sustained deterioration in revenue and credit metrics would be negative for the ratings. Positive: Diversification in the customer base/product profile, leading to a sustained increase in revenue and credit profile, would be positive for the ratings. COMPANY PROFILE WIPE began operations in 1986 and manufactures wiper systems and other ancillaries primarily for passenger cars. Its plants are located in Sultanpur, Pune, Rewari and Kancheepuram. WIPE's ratings: -- Long-Term Issuer Rating: 'IND BB+'; Outlook Stable -- INR215 million fund-based working capital limits: assigned 'IND BB+'/Stable/'IND A4+' -- INR67.79 million long-term loans: assigned 'IND BB+'/Stable -- INR6 million non-fund-based limits: assigned 'IND A4+' YKM ENTERTAINMENT: Ind-Ra Affirms 'IND B' Long-Term Issuer Rating ---------------------------------------------------------------- India Ratings and Research (Ind-Ra) has revised YKM Entertainment & Hotels Private Limited's (YEHPL) Outlook to Stable from Negative and affirmed the Long-Term Issuer Rating at 'IND B'. A full list of rating actions is at the end of this commentary. KEY RATING DRIVERS The Outlook revision reflects the achievement of financial closure for the revised project cost. Project cost was revised primarily on a change in the project scope to make a five-star hotel while the original plan was for a four-star hotel. The project cost increased to INR2,280 million from the earlier revised level of INR1,910 million. Initial cost was INR1,302.5 million. With this, the launch date has also been revised again to April 2016 from the earlier revised estimated launch in April 2015 (initial April 2014). The affirmation reflects the revision in term loan repayment schedule by extending the moratorium according to the revised launch date. Ind-Ra believes that timely completion of the project and sufficient operational cash flows are critical for the company to meet interest servicing requirements which started from February 2016. The ratings also reflect the hotel's location advantage, as Tirupati is a leading pilgrimage centre and also an upcoming commercial hub after the bifurcation of the Andhra Pradesh. The ratings are supported by the hotel's association with a leading brand as InterContinental Hotels Group will be operating the hotel under their brand 'Holiday Inn'. RATING SENSITIVITIES Negative: Any further delays in the project leading to cost and time overruns and/or delays in servicing debt obligation would be negative for the ratings. Positive: Timely completion of the hotel project with no further cost overruns along with stabilisation of operations could result in a positive rating action. COMPANY PROFILE Incorporated in 2009, YEHPL is implementing a five-star hotel with an integrated development in Tirupati containing 215 rooms of different categories, international convention centre, health spa and open marriage garden. The proposed cost of the project is INR2,280 million. As of 22 February 2016, YEHPL has incurred capex of INR2,262 million. As at end-January 2016, around 96% of the overall project was completed and final finishing work was in progress. YEHPL's ratings are as follows: -- Long-Term Issuer Rating: affirmed at 'IND B'; Outlook revised to Stable from Negative -- INR1360.0 million term loans(increased from INR1110.0m): affirmed at 'IND B'/Stable -- INR27.0 million non-fund-based working capital limit: assigned 'IND A4' Z. F. FILAMENTS: CRISIL Assigns B- Rating to INR41.3MM Term Loan ---------------------------------------------------------------- CRISIL has assigned its 'CRISIL B-/Stable' rating to the long- term bank facilities of Z. F. Filaments (ZFF). Amount Facilities (INR Mln) Ratings ---------- --------- ------- Cash Credit 15.5 CRISIL B-/Stable Term Loan 41.3 CRISIL B-/Stable The rating reflects the firm's modest scale of operations, and below-average financial risk profile because of modest networth, high gearing, and subdued debt protection metrics. These weaknesses are partially offset by its promoter's extensive experience in the textile industry. Outlook: Stable CRISIL believes ZFF will continue to benefit from its promoter's extensive industry experience. The outlook may be revised to 'Positive' in case of higher-than-expected revenue or profitability leading to substantial cash accrual. Conversely, the outlook may be revised to 'Negative' in case of lower-than- expected cash accrual or significant incremental working capital requirement, leading to deterioration in liquidity. ZFF, set up in 2002 by Mr. Ashfaq Ansari, manufactures grey fabric. It is based in Dhule, Maharashtra, and has capacity of 450,000 metre per month. ========= J A P A N ========= TAKATA CORP: Estimates Worst-case Recall Costs at $24 Billion ------------------------------------------------------------- Bloomberg News reports that Takata Corp., the supplier behind the auto industry's biggest recall ever, estimated that a comprehensive callback of its air bag inflators would total about JPY2.7 trillion ($24 billion), according to a person familiar with the matter. The worst-case recall scenario would involve 287.5 million air bag inflators, said the person, who asked not to be identified because the company's deliberations are private, Bloomberg relates. Takata and the automakers still have to determine how the costs are shared, the person said. A representative for Tokyo-based Takata declined to comment. Takata shares plunged by 20 percent to close at JPY414 on March 30, hitting the lower daily limit in Tokyo trading, Bloomberg discloses. The shares have declined 49 percent this year, compared with the 12 percent decline for the benchmark Topix index. Bloomberg says the projection by Takata exceeds a February estimate by a Jefferies Group LLC analyst by about $7 billion. According to Bloomberg, the National Highway Traffic Safety Administration has said Takata air bag inflators caused nine fatalities by rupturing and spraying plastic and metal shards at motorists. Bloomberg relates that the regulator is investigating all Takata inflators that use a chemical propellant banned from future models and is giving the company until as long as the end of 2019 to determine the root cause of the flaw or prove the inflators are safe. Moisture seeping into Takata's inflators was determined to be the reason Takata air bags have ruptured by Orbital ATK, a researcher hired by a coalition of automakers that announced its findings last month, according to Bloomberg. Challenges with determining root cause of the rupture issue has held automakers and the supplier back from deciding how the companies will divvy costs, says Bloomberg. Expenses stemming from Takata air bag recalls have totaled about JPY607.8 billion, Takaki Nakanishi, an analyst with Jefferies, wrote in his Feb. 24 report, Bloomberg says. He estimated future expenses assuming an average cost of about JPY9,000 per unit. "It is not difficult to imagine how hard it will be for Takata to rebuild its financial standing if the expenses are apportioned," Nakanishi, as cited by Bloomberg, wrote. "The Japanese automotive industry cannot avoid seriously adopting an exit strategy from the Takata issue." As reported in the Troubled Company Reporter-Asia Pacific on Nov. 24, 2014, 24/7 Wall St. said Takata Corporation faces huge fines, and almost certainly lawsuits (which have already begun), over its defective airbags. The report related that some experts believe that the Japanese company was not forthcoming about the technical failure that caused several serious accidents and deaths. If Takata goes bankrupt, which could certainly happen, claims against the company would be in limbo, 24/7 Wall St. said. Takata Corporation (TYO:7312) develops, manufactures and sells safety products for automobiles. The Company offers seatbelts, airbags, steering wheels, child seats and trim parts. The Company has subsidiaries located in Japan, the United States, Brazil, Germany, Thailand, Philippines, Romania, Singapore, Korea, China and other countries. ==================== S O U T H K O R E A ==================== HYUNDAI MERCHANT: Gets Debt Extension From Creditors ---------------------------------------------------- Kyunghee Park at Bloomberg News reports that Hyundai Merchant Marine Co., South Korea's second-biggest container-shipping line, won more time from lenders to raise funds to repay KRW1.2 trillion ($1 billion) of debt as the cash-strapped company negotiates to get out of a financial crisis. Bloomberg relates that Korea Development Bank and other creditors including Woori Bank agreed to extend the maturity of Hyundai Merchant's debt by three months starting March 29, the state- owned lender said in an e-mailed statement March 29. The shipping line needs to convince bondholders and shipowners to join the restructuring plan, the lender said, Bloomberg relays. According to Bloomberg, Hyundai Merchant, which posted losses in five of the past seven years, has been selling assets to reduce debt that had ballooned to almost 800% of its equity. Bloomberg says shipping lines worldwide have also been cutting workers and considering consolidation to stem losses as years of slowing global trade and overcapacity bring down transportation rates. KDB said the creditors will end any support to Hyundai Merchant if the company fails to convince other stakeholders to join in the revival efforts, Bloomberg relays. The banks' decision will help the company's efforts to cut charter rates and talks with bondholders, Hyundai Merchant said in an e-mailed statement cited by Bloomberg. Hyundai Merchant Marine Co., Ltd., is a Korea-based company specializing in the provision of shipping services. The Company provides its services under two main segments: container and bulk. ============= V I E T N A M ============= VIET NAM OIL: Biofuel Factory Halts Operations Due to Losses ------------------------------------------------------------ BizHub reports that Bio-Ethanol Dung Quat, a bio-fuel factory owned by the Viet Nam Oil and Gas Group (PetroVietnam), has halted operations due to continuing losses. BizHub relates that the VND1.9 trillion (US$84.4 million) factory began operations in February 2012, after the PetroVietnam Central Bio-Fuels JSC (BSR-BF) began construction of the facility in central Quang Ngai Province's Dung Quat Economic Zone in September 2009. According to BizHub, the factory was expected to produce 100 million litres of ethanol per year, to be mixed with A92 gasoline to generate bio-fuel E5. In early 2013, PetroVietnam assigned its Binh Son Refining and Petrochemical Company Limited (BSR) to run the factory, in a bid to increase its overall business management, BizHub recalls. BizHub says director of the plant Pham Van Vuong told Nguoi lao dong (The Labourers) online recently that the facility ceased operations nearly one year ago, after maintaining modest activities for a considerable time. BizHub relates that Vuong explained that fewer than ten out of 63 provinces and cities nationwide uses E5 gasoline, consuming a combined quantity of 2,000 cubic metres of ethanol per month, on average. This volume represented only about one quarter of the factory's monthly production capacity. In addition, the cost of ethanol rolled out at the factory was higher than ethanol prices in the market, which averaged less than VND2,000 per litre, according to BizHub. "We have sought ways to export ethanol, yet failed to compete, as well," BizHub quotes Vuong as saying. Bao Quang Ngai, the newspaper of the provincial party committee, reported last September that the factory suffered losses amounting to billions of dong, since it was unable to compete, BizHub discloses. According to BizHub, Vuong said the pause in operations was a temporary measure for the factory to cope with its difficulties, as it was awaiting better market conditions. He added that 128 of the more than 200 engineers and workers at the factory have temporarily been let go and no longer receive salaries, as of this month, while some were shifted to other jobs at the Dung Quat Oil Refinery, another plant operated by PetroVietnam in the province, BizHub relays. Additionally, many employees had searched for seasonal work to earn their livings, a worker told Nguoi lao dong. BizHub further relates the Quang Ngai Department of Taxation reportedly said BSR-BF had asked for permission to postpone its responsibility to pay value-added taxes in 2016. An official with BSR-BF told VnExpress online, based upon remaining anonymous, that the company would address issues related to Bio-Ethanol Dung Quat at an upcoming shareholders' meeting, according to BizHub. BizHub meanwhile reports that Quang Ngai People's Committee requested prompt reports from both BSR-BF and BSR about the situation at the factory and their suggestions about taxes, loans and restructuring schemes. ********* Tuesday's edition of the TCR-AP delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-AP editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Tuesday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-AP constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-AP editor holds some position in the issuers' public debt and equity securities about which we report. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR-AP. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com Friday's edition of the TCR-AP features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Asia Pacific is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Valerie U. Pascual, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, and Peter A. Chapman, Editors. Copyright 2016. All rights reserved. ISSN: 1520-9482. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is US$775 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000 or Nina Novak at 202-362-8552. *** End of Transmission ***