/raid1/www/Hosts/bankrupt/TCRAP_Public/230616.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Friday, June 16, 2023, Vol. 26, No. 121
Headlines
A U S T R A L I A
HARVEY TRUST 2023-1: S&P Assigns BB (sf) Rating to Class E Notes
NYERSE CONSTRUCTIONS: Goes Into Liquidation
PACOM SECURITY: First Creditors' Meeting Set for June 21
PARAGON DCN: Second Creditors' Meeting Set for June 21
PORTER DAVIS: Builders Appointed to Finish Customers' Homes
PORTER DAVIS: Unsecured Creditors Expected to Get Nothing
RED RIVER: Second Creditors' Meeting Set for June 21
S & K GROUP: First Creditors' Meeting Set for June 22
SJB NO 2: First Creditors' Meeting Set for June 21
C A M B O D I A
NAGACORP LTD: S&P Places 'B' LT ICR on CreditWatch Negative
C H I N A
MISSFRESH LTD: Gets Delisting Notice from Nasdaq
SUNAC CHINA: HK Court Approves Withdrawal of Wind-Up Case
I N D I A
ADILABAD MUNICIPALITY: ICRA Keeps B+ Rating in Not Cooperating
AGGARWAL ASSOCIATES: CARE Keeps D Debt Rating in Not Cooperating
ATUL AUTOMOTIVES: ICRA Keeps B+ Debt Rating in Not Cooperating
BALBIR FOOD: ICRA Moves B Debt Ratings to Not Cooperating
BHARATI INDUSTRIES: CARE Keeps D Debt Ratings in Not Cooperating
CHIDANAND BASAPRABHU: Ind-Ra Affirms BB Long lolTerm Issuer Rating
CONSOLIDATED CONSTRUCTION: CARE Keeps D Ratings in Not Coop.
EDGE BRAND: Insolvency Resolution Process Case Summary
GANAPATI FISHING: ICRA Keeps B+ Debt Rating in Not Cooperating
GOLDEN AGRARIAN: Insolvency Resolution Process Case Summary
GUPTA BUILDERS: CARE Keeps D Debt Rating in Not Cooperating
HANUMAN RICE: CARE Keeps D Debt Rating in Not Cooperating Category
HEM CERAMICS: ICRA Keeps B+ Debt Ratings in Not Cooperating
JAGTIAL MUNICIPALITY: ICRA Keeps B+ Rating in Not Cooperating
JANA CAPITAL: Ind-Ra Affirms B- NonConvertible Debts Rating
JANA HOLDINGS: Ind-Ra Affirms B- NonConvertible Debts Rating
JAWAHARNAGAR MUNICIPAL: ICRA Keeps B+ Rating in Not Cooperating
KSK ENERGY: Liquidation Process Case Summary
MAA BHUASUNI: Ind-Ra Affirms BB Long Term Issuer Rating
MAHAK SYNTHETIC: Ind-Ra Affirms BB+ Long Term Issuer Rating
MINI CONSTRUCTION: ICRA Keeps B+ Debt Ratings in Not Cooperating
MODRINA AUTO: ICRA Keeps B+ Debt Ratings in Not Cooperating
NORTHERN ARC: ICRA Reaffirms D(SO) Rating for INR0.48cr PTCs
RELIGARE FINVEST: ICRA Reaffirms D Rating on INR120cr LT Bonds
RIYAN PAPER: ICRA Keeps B+ Debt Ratings in Not Cooperating
SAHDEV JEWELLERS: CARE Keeps D Debt Rating in Not Cooperating
SANGHI INDUSTRIES: Ind-Ra Cuts Long Term Issuer Rating to 'D'
SHYAM AGRO: ICRA Moves B+ Debt Rating to Not Cooperating Category
SHYAMALI COLD: CARE Keeps D Debt Ratings in Not Cooperating
SIDDHIVINAYAK COTFAB: Ind-Ra Affirms BB+ Long Term Issuer Rating
SONEX INDUSTRIES: ICRA Keeps B+ Debt Ratings in Not Cooperating
SPICEJET LTD: Two Aircraft-Leasing Cos. Get $15MM Summary Judgment
TALWALKARS HEALTHCLUBS: CARE Keeps D Ratings in Not Cooperating
TICEL BIO: CARE Keeps D Debt Rating in Not Cooperating Category
UNIVERSAL EXTRUSIONS: CARE Keeps D Debt Rating in Not Cooperating
USHA SHRIRAM: ICRA Lowers Rating on INR21cr LT Loan to D
VARANASI STP: Ind-Ra Moves 'D' Loan Rating to Non-Cooperating
VARIDHI COTSPIN: Ind-Ra Affirms BB- Bank Loan Rating
VATIKA INFRACON: CARE Keeps D Debt Rating in Not Cooperating
VIJAYANT AGENCIES: CARE Keeps C Debt Rating in Not Cooperating
VIRTUE MARKETING: CARE Keeps D Debt Rating in Not Cooperating
VIVID SOLAIRE: Ind-Ra Hikes Bank Loan Rating to 'BB+'
ZENITH PRECISION: CARE Keeps D Debt Rating in Not Cooperating
[*] INDIA: IBBI to Form 'Common Panel' of Insolvency Professionals
N E W Z E A L A N D
API FAKAKOLOA: Court to Hear Wind-Up Petition on June 23
ARYAN GURU: Creditors' Proofs of Debt Due on June 30
BL & PS HOLDINGS: Court to Hear Wind-Up Petition on June 20
BLACK STAG: Court to Hear Wind-Up Petition on June 23
GCB BUILDING: Creditors' Proofs of Debt Due on July 14
P A K I S T A N
PAKISTAN: IMF Dissatisfied With FY24 Budget Presented
S I N G A P O R E
JAVELIN INVESTMENTS: Creditors' Proofs of Debt Due on July 17
NO SIGNBOARD: Gets Letter of Demand from Orchard Gateway Landlord
WBL GLOBAL: Court to Hear Wind-Up Petition on June 23
- - - - -
=================
A U S T R A L I A
=================
HARVEY TRUST 2023-1: S&P Assigns BB (sf) Rating to Class E Notes
----------------------------------------------------------------
S&P Global Ratings assigned its ratings to six of the seven classes
of prime residential mortgage-backed securities (RMBS) issued by
Perpetual Trustee Co. Ltd. as trustee for Series 2023-1 Harvey
Trust. Series 2023-1 Harvey Trust is a securitization of prime
residential mortgage loans originated by Great Southern Bank (GSB;
a business name of Credit Union Australia Ltd.).
The ratings reflect:
-- S&P's view of the credit risk of the underlying collateral
portfolio at transaction close, including the fact that this is a
closed portfolio, which means that no further loans will be
assigned to the trust after the closing date.
-- S&P's view that the credit support is sufficient to withstand
the stresses it applies. The credit support for the rated notes
comprises note subordination and lenders' mortgage insurance on
20.0% of the portfolio.
-- S&P's expectation that the various mechanisms to support
liquidity within the transaction, including an excess revenue
reserve funded by available excess spread, principal draws, and a
liquidity facility equal to 1.0% of the aggregate invested amount
of the notes are sufficient under its stress assumptions to ensure
timely payment of interest.
-- The benefit of a fixed- to floating-rate interest-rate swap
provided by GSB to hedge the mismatch between receipts from any
fixed-rate mortgage loans and the floating-rate notes. National
Australia Bank Ltd. will act as standby swap provider.
Ratings Assigned
Series 2023-1 Harvey Trust
Class A, A$690.000 million: AAA (sf)
Class AB, A$30.000 million: AAA (sf)
Class B, A$12.750 million: AA (sf)
Class C, A$8.625 million: A (sf)
Class D, A$3.525 million: BBB (sf)
Class E, A$2.475 million: BB (sf)
Class F, A$2.625 million: Not rated
NYERSE CONSTRUCTIONS: Goes Into Liquidation
-------------------------------------------
SPLASH! reports that Nyerse Constructions Pty Ltd, trading as Pools
R Us, has gone into liquidation.
The company may also be known under other trading names including
Landscapes R Us, Oasis Poolscapes, Poolscapes R Us, Urban Oasis
Poolscapes and Urban Poolscapes.
It was resolved at a general meeting of the members of the company
on June 1, 2023 that the company be wound up and a liquidator
appointed, the report says.
SPLASH! understands that issues affecting the failure of the
company include the health of the principal, and that there is a
significant number of creditors including many customers with
unfinished pools.
Andrew Juzva, the company's liquidator, is currently working on the
liquidator's report and should have it ready within a week, SPLASH!
notes.
The liquidator may be reached at:
Andrew Juzva
GS Andrews Advisory
2 Drummond Street
Carlton, Vic 3053
Tel: (03) 9662 2666
PACOM SECURITY: First Creditors' Meeting Set for June 21
--------------------------------------------------------
A first meeting of the creditors in the proceedings of Pacom
Security Pty Ltd and Hills Group Operations Pty Ltd will be held on
June 21, 2023, at 10:00 a.m. via virtual meeting facility.
Sule Arnautovic and John Vouris of Hall Chadwick were appointed as
administrators of the company on June 9, 2023.
PARAGON DCN: Second Creditors' Meeting Set for June 21
------------------------------------------------------
A second meeting of creditors in the proceedings of Paragon DCN Pty
Ltd has been set for June 21, 2023 at 10:00 a.m. via virtual
meeting only.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by June 20, 2023 at 4:00 p.m.
Christopher Damien Darin of Worrells was appointed as administrator
of the company on May 16, 2023.
PORTER DAVIS: Builders Appointed to Finish Customers' Homes
-----------------------------------------------------------
The Sydney Morning Herald reports that there is light at the end of
the tunnel for about 1,800 customers left in limbo after the March
collapse of Porter Davis.
SMH relates that advisory firm KordaMentha has conducted an
independent review and audit of builders for the Victorian Managed
Insurance Authority (VMIA) and appointed a group of companies -
including Simonds and Metricon - deemed financially capable and
suitable to help complete the construction of unfinished Porter
Davis homes.
Porter Davis left 1,800 homes in Victoria and Queensland
unfinished. Another 779 customers who had signed a contract and
paid a deposit were also affected, while 410 employees were made
redundant.
According to SMH, the VMIA said in a statement that more than 1,100
claims decisions have been made and AUD3 million paid out to
affected Porter Davis customers in the nine weeks since the
building company collapsed. More than 1,800 claims have been
lodged, and the insurer is working through the list of remaining
clients.
"We've commissioned an independent assessment that confirms these
builders' financial strength and operational capacity to complete
the building works required, over and above their existing
projects," SMH quotes a VMIA spokesman as saying.
"We're ramping up quoting with many other builders, including those
preferred by our Porter Davis clients, based on a thorough due
diligence process".
SMH says hundreds of families who lost deposits to collapsed home
builder Porter Davis have been handed a AUD15 million lifeline.
"So far, we've conducted 1,350 site inspections and paid out some
AUD3 million in claims, and we expect to close out hundreds more
claims assessments over coming weeks," the spokesman said.
SMH relates that the VMIA said it would scrutinise each quote
received from a new builder to make sure it offers value for money
for the client, while meeting all the specifications and
requirements of the job.
Rhett Simonds, managing director of Simonds Homes – one of the
builders appointed to the panel – told radio station 3AW that his
company had already begun work on "about a dozen" former Porter
Davis builds, SMH relays.
"We're here to step in and . . . pick these jobs up from where
they've been left off," the report quotes Mr. Simonds as saying.
"We have been assessed as financially strong and have the capacity
to pick up hundreds of these homes."
SMH relates that Mr. Simonds said the appointment of a panel of
financially sound builders to complete unfinished Porter Davis
projects "should give the industry confidence".
Metricon Homes also confirmed it would complete 300 to 500 homes
left unfinished by Porter Davis, SMH notes.
SMH adds that the VMIA did not say if the claims payout included
560 families who were left uninsured after it was discovered Porter
Davis failed to acquire the mandatory builders' warranty insurance
(BWI) on their behalf.
Said Jahani, Matt Byrnes and Cameron Crichton of Grant Thornton
Australia were appointed liquidators of Porter Davis Homes (PDH) on
March 31, 2023.
PORTER DAVIS: Unsecured Creditors Expected to Get Nothing
---------------------------------------------------------
News.com.au reports that unsecured creditors of collapsed building
firm Porter Davis are unlikely to recover a single cent of their
lost funds.
Those are the sobering details released on June 14 according to a
credit report compiled by the liquidators from insolvency firm
Grant Thornton.
In March, Australia's 13th largest home builder Porter Davis Homes
went bust, placing 1,700 projects and another 779 empty blocks of
land in jeopardy across Victoria and Queensland.
At last count, the company owed a whopping AUD71 million to
unsecured creditors, news.com.au notes.
News.com.au relates that the liquidators have warned that these
funds are unlikely to ever be recovered.
Luckily most customers are set to be partially reimbursed by
insurance companies or a government bailout, news.com.au notes.
Of those homeowners, 560 of them had paid a deposit but Porter
Davis had never taken out building insurance, leaving them with no
automatic payout from the insurer.
Yet in an unprecedented step, Victorian Premier Daniel Andrews
agreed to refund them their lost money in a AUD15 million
government bailout in April.
However, all the other unsecured creditors – mostly tradies –
will have to wear the cost, news.com.au states. It could put many
out of business as they face financial ruin.
In total, the failed building firm owes AUD146.5 million to
creditors, news.com.au discloses.
Of that, AUD57.5 million was owed to two secured creditors, the
Commonwealth Bank and another company called Chesapeake, owed
AUD32.9 million and AUD24.6 million respectively.
Porter Davis also owes about AUD18 million to its employees in
unpaid wages, leave and superannuation.
Only the CBA is expected to get its money back "in full".
Chesapeake and employees will receive a "partial dividend" as they
are priority creditors.
Everyone else, estimated to be more 1,000 unsecured creditors, has
been warned that their status is "dividend unlikely," news.com.au
relays.
News.com.au adds that the liquidators also revealed that they still
plan to pursue some customers over debts to increase the amount of
cash they have to disperse to creditors.
According to news.com.au, Grant Thornton said around AUD16.77
million worth of building works had been carried out which had yet
to be paid for.
"These debts primarily relate to invoices issued to customers at
the completion of a stage in their build, i.e. the customer has
received the benefit of works undertaken to completion of that
particular stage and has been invoiced accordingly," the report
stated.
"Given we are still actively assisting some customers in achieving
occupancy, some of the above accounts receivable will be
recovered."
They said customers could try to "offset" their debts if they had
lost money as a result of the Porter Davis collapse.
"However, there will be instances where debts are due and payable
and the liquidators will seek to recover those amounts for the
benefit of creditors," they warned, news.com.au relays.
News.com.au previously reported that several customers – who had
incomplete homes and were thousands out of pocket – were worried
they would be personally pursued by the liquidators to pay more,
after receiving a stern email to that effect.
Porter Davis has more than 20 assets that "may be recoverable".
They have conducted 13 sales of furniture which has netted them
AUD142,000.
News.com.au adds that the report also found that Porter Davis had
been insolvent since at least February 2023. There were "indicators
of insolvency" prior to that.
Said Jahani, Matt Byrnes and Cameron Crichton of Grant Thornton
Australia were appointed liquidators of Porter Davis Homes (PDH) on
March 31, 2023.
RED RIVER: Second Creditors' Meeting Set for June 21
----------------------------------------------------
A second meeting of creditors in the proceedings of Red River
Resources Limited, Hillgrove Mines Pty Ltd, Forth Resources Pty
Ltd, and Hebrides Resources Pty Ltd has been set for June 21, 2023
at 12:30 p.m. at Mezzanine Level, 28 The Esplanade in Perth and via
virtual meeting technology.
The purpose of the meeting is (1) to receive the report by the
Administrator about the business, property, affairs and financial
circumstances of the Company; and (2) for the creditors of the
Company to resolve whether the Company will execute a deed of
company arrangement, the administration should end, or the Company
be wound up.
Creditors wishing to attend are advised proofs and proxies should
be submitted to the Administrator by June 20, 2023 at 4:00 p.m.
Thomas Birch, Jeremy Nipps, and Barry Wight of Cor Cordis were
appointed as administrators of the company on Nov. 29, 2022.
S & K GROUP: First Creditors' Meeting Set for June 22
-----------------------------------------------------
A first meeting of the creditors in the proceedings of S & K Group
Pty Ltd will be held on June 22, 2023, at 11:00 a.m. via online
video conference.
Sam Kaso and Daniel P Juratowitch of Cor Cordis were appointed as
administrators of the company on June 9, 2023.
SJB NO 2: First Creditors' Meeting Set for June 21
--------------------------------------------------
A first meeting of the creditors in the proceedings of SJB No 2 Pty
Ltd will be held on June 21, 2023, at 10:30 a.m. at the offices of
Worrells at 195 Hume Street in Toowoomba and via virtual meeting.
Adam Francis Ward of Worrells was appointed as administrator of the
company on June 9, 2023.
===============
C A M B O D I A
===============
NAGACORP LTD: S&P Places 'B' LT ICR on CreditWatch Negative
-----------------------------------------------------------
S&P Global Ratings placed its 'B' long-term issuer credit rating
and long-term issue rating on NagaCorp Ltd.'s senior unsecured
notes on CreditWatch with negative implications.
The CreditWatch placement reflects a heightened probability that
S&P could lower its ratings should Naga's liquidity further
deteriorate as the maturity of its senior unsecured notes in July
2024 draws near.
Refinancing risk is rising for Naga as the debt maturity
approaches, in S&P's view. Naga has less room for operational
missteps. Liquidity pressure is building ahead of the maturity date
for its US$472 million bond in July 2024.
S&P believes the impending lumpy debt maturity, Naga's lack of
established diversified funding sources, and tepid debt markets
accentuate the weakness in the company's capital structure.
That said, it is possible for Naga to accumulate sufficient cash to
address its refinancing needs, in its assessment. This considers
the company's reduced discretionary spending, and S&P's expectation
of higher earnings following the pandemic.
Extension of the Naga3 project timeline by four years is timely
relief for Naga's cash use. While the extension alleviates pressure
on cash outflows, it is insufficient to fully address S&P's view of
rising refinancing risk.
The company now expects to complete the project in September 2029,
compared with its previous target of September 2025. With the
remaining Naga3 capital expenditure (capex) spread out over a
longer time period, the company will likely be able to meet its
future capex requirements with internally generated cash flows over
the new project timeline.
S&P said, "We estimate capital expenditure of US$45 million-US$75
million in 2023. With operations still lagging pre-pandemic levels,
Naga is prioritizing cash conservation. For 2020-2022, the company
scaled back its annual capex to US$120 million-US$170 million. This
compares with our previous expectation of US$250 million-US$350
million in annual capex for the period. The company also declared
no cash dividends in 2021 and 2022.
"We expect Naga's gaming operations to recover to pre-pandemic
levels in 2026. A delayed operational recovery will pressure the
company's liquidity. EBITDA is unlikely to recover to pre-pandemic
levels before 2026. Our forecast considers domestic mass-market
demand and easing international travel restrictions.
"We estimate Naga's EBITDA will recover to 45%-50% of pre-pandemic
levels in 2023, and further to 70%-75% in 2024. Our recovery
assumptions for Naga trail those of regional peers. This reflects
the Naga3 project delay."
CreditWatch
The CreditWatch placement reflects a heightened probability that
S&P could lower its ratings should Naga's liquidity further
deteriorate as the maturity of its senior unsecured notes in July
2024 draws near.
S&P may lower the ratings if there is no solid progress on
refinancing, its unrestricted cash accumulation for the first half
of 2023 is lower than it expects, or if the company considers a
capital market transaction that it regards as distressed.
S&P aims to resolve the CreditWatch before the end of the third
quarter of 2023.
ESG credit indicators: E-2, S-4, G-3
=========
C H I N A
=========
MISSFRESH LTD: Gets Delisting Notice from Nasdaq
------------------------------------------------
Caixin Global reports that Missfresh Ltd. said June 12 that it
received a delisting notice from the Nasdaq as it failed to comply
with the bourse's minimum $10 million stockholders' equity
requirement for continued listing by June 5, 2023.
Caixin relates that Missfresh, which went public on the Nasdaq in
June 2021, said that the bourse has determined that the firm's
American depositary shares will be delisted unless it makes a
timely request for a hearing before the Nasdaq Hearing Panel. The
online grocer said it plans to make the request.
According to Caixin, Missfresh also said that it was notified last
month by the Nasdaq of its violation of a listing rule after it was
unable to make a timely filing of its full-year 2022 financial
report to the U.S. Securities and Exchange Commission.
Once a frontrunner in China's booming online grocery industry,
Missfresh's fall from grace was a result of the company's failure
to grow its core business amid financing woes and fierce
competition with rivals such as Alibaba Group Holding Ltd.'s
Freshippo and Dingdong (Cayman) Ltd.
In July, Missfresh announced the decision to suspend its mainstay
instant-delivery service after failing to secure a CNY200 million
($28 million) equity investment from a Chinese conglomerate, Caixin
recalls. That service aimed to deliver fresh meat, fruits and
vegetables in as little as 30 minutes from mini warehouses located
near residential compounds.
The company also faced nearly 1,400 separate lawsuits filed by
former employees and suppliers demanding nearly CNY813 million,
Caixin discloses citing the company's 2021 financial report.
In the first half of 2022, Missfresh's net loss attributable to
ordinary shareholders narrowed 53.6% year-on-year to around CNY1.1
billion despite revenue dropping 11.6% to about CNY2.7 billion,
according to its 2022 interim report published in December.
SUNAC CHINA: HK Court Approves Withdrawal of Wind-Up Case
---------------------------------------------------------
Bloomberg News reports that a Hong Kong court has granted an order
for the withdrawal of a winding-up lawsuit against Sunac China
Holdings Ltd., removing a hurdle to the developer's $9 billion debt
restructuring.
Bloomberg relates that the petition has been withdrawn and winding
up proceedings against the company "have been discontinued," Sunac
said in an exchange filing on June 14. The case was filed in
September last year by a bondholder who the builder previously said
is allegedly owed $22 million in principal plus interest on senior
notes.
Bloomberg says the petition withdrawal is a relief for Sunac after
three smaller peers were ordered by Hong Kong courts within the
past year to liquidate after losing winding-up cases in the city.
Those orders highlighted the unprecedented stress among Chinese
developers from a liquidity crunch that fueled record defaults on
offshore bonds. Sunac missed its first payment in May 2022.
According to Bloomberg, Sunac's restructuring proposal has secured
support from investors holding about 87% of the developer's
offshore debt. If the plan receives court approval, it will become
binding on all creditors. The restructuring terms feature
convertible bonds linked to its shares as well a debt swap into
equity of Sunac Services Holdings Ltd.
Shares of Sunac China have plunged nearly 70% since resuming
trading two months ago in Hong Kong, the report notes.
About Sunac China
Sunac China Holdings Limited (SEHK:1918) --
http://www.sunac.com.cn/-- engages in the sales of properties in
the People's Republic of China. The Company operates its business
through two segments: Property Development and Property Management
and Others. The Company's subsidiaries include Sunac Real Estate
Investment Holdings Ltd., Qiwei Real Estate Investment Holdings
Ltd. and Yingzi Real Estate Investment Holdings Ltd.
As reported in the Troubled Company Reporter-Asia Pacific in
October 2022, Moody's Investors Service has withdrawn Sunac China
Holdings Limited's Ca corporate family rating and its C senior
unsecured ratings. Prior to the withdrawal, the rating outlook was
negative. Moody's has decided to withdraw the ratings because it
believes it has insufficient or otherwise inadequate information to
support the maintenance of the ratings.
=========
I N D I A
=========
ADILABAD MUNICIPALITY: ICRA Keeps B+ Rating in Not Cooperating
--------------------------------------------------------------
ICRA has retained the Long-Term rating of Adilabad Municipality in
the 'Issuer Not Cooperating' category. The ratings are denoted as
[ICRA]B+(Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Issuer Rating - [ICRA]B+ (Stable); ISSUER NOT
COOPERATING; Rating Continues
to remain under the 'Issuer
Not Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Adilabad Municipality (AM) provides civic services to the Adilabad
town, located in the Adilabad district in Telangana. It is governed
by the provisions of the Telangana Municipalities Act 2019. The AM
covers an area of 50.69 square kilometre (sq. km.) and the
projected population is 1,80,390 for 2021 (1,55,968 as per Census
2011). The major functions of the AM involve water supply,
sewerage, solid waste management, repair and maintenance of roads
and street lighting in its area. An elected body, headed by a
Chairperson, administers the municipality. The Commissioner acts as
the executive head and oversees the day-to-day functioning of the
ULB.
AGGARWAL ASSOCIATES: CARE Keeps D Debt Rating in Not Cooperating
----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Aggarwal
Associates (AA) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 4.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated June 7, 2022,
placed the rating(s) of AA under the 'issuer non-cooperating'
category as AA had failed to provide information for monitoring of
the rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. AA continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
April 23, 2023, May 3, 2023, May 13, 2023.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Aggarwal Associates (AGA) is a partnership firm established in
1995. It is currently being managed by Mr. Amit Garg and Mrs.
Rimple Garg sharing profits and losses equally. AGA is engaged in
civil construction work in Haryana which includes infrastructure
development and road work. The firm is registered as a class 'A'
contractor with Public Work Department (PWD) of Punjab. The orders
undertaken by the firm are secured through the competitive bidding
process.
ATUL AUTOMOTIVES: ICRA Keeps B+ Debt Rating in Not Cooperating
--------------------------------------------------------------
ICRA has retained the Long-Term rating of Atul Automotives in the
'Issuer Not Cooperating' category. The ratings are denoted as
[ICRA]B+(Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 11.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Atul Automotives (AA) is a part of the Rajkot (Gujarat)-based Atul
Group of companies, owned by the Chandra family. The firm was
established in 2003 and is an authorised automobile dealer, spares
distributor and service provider for Mahindra & Mahindra Limited.
The firm has three showrooms in Lalpur, Jamnagar and Porbandar and
also has one salecum-service outlet across Jamnagar and Porbandar.
Besides, the firm also provides car finance and car insurance
facilities through reputed channel partners (leading banks and
insurance companies).
BALBIR FOOD: ICRA Moves B Debt Ratings to Not Cooperating
---------------------------------------------------------
ICRA has moved the ratings for the bank facilities of Shree Balbir
Food Product Private Limited in the 'Issuer Not Cooperating'
category. The rating is denoted as "[ICRA]B(Stable)/[ICRA]A4 ISSUER
NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 6.00 [ICRA]B (Stable) ISSUER NOT
Fund Based/CC COOPERATING; Rating moved to
the 'Issuer Not Cooperating'
category
Long-term 1.09 [ICRA]B (Stable) ISSUER NOT
Fund-based COOPERATING; Rating moved to
Term Loan the 'Issuer Not Cooperating'
category
Short-term 1.00 [ICRA]A4; ISSUER NOT
Non Fund based COOPERATING Rating moved to
Limits the 'Issuer Not Cooperating'
Category
The rating is based on limited cooperation from the entity since
the time it was last rated in May 2023. As a part of its process
and in accordance with its rating agreement with Shree Balbir Food
Product Private Limited, ICRA has been sending repeated reminders
to the entity for payment of surveillance fee that became due.
Despite multiple requests by ICRA, the entity's management has
remained non-cooperative. In the absence of requisite cooperation
and in line with the aforesaid policy of ICRA, the rating has been
moved to the "Issuer Not Cooperating" category.
Shree Balbir Food Product Private Limited is promoted by Balbir
Vikas Bhushan Group. The Group manufactures and trades in steel
products such as thermo-mechanically-treated (TMT) bars, mild steel
angles, channels and beams, among others. The Group ventured into
manufacturing of food products with the establishment of Shree
Balbir in 2015. It is a wholly-owned subsidiary of Balbir
Structures Private Limited (BSPL). Its manufacturing facilities are
located at Silvassa (Dadra and Nagar Haveli). The mill has an
installed capacity of 200 MT per day (72,000 MTPA). The first full
year of operations for the company was FY2019.
BHARATI INDUSTRIES: CARE Keeps D Debt Ratings in Not Cooperating
----------------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Bharati
Industries (BI) continue to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 4.39 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 0.35 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated June 9, 2022,
placed the rating(s) of BI under the 'issuer non-cooperating'
category as BI had failed to provide information for monitoring of
the rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. BI continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
April 25, 2023, May 5, 2023, May 15, 2023.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Pune (Maharashtra) based, BI was established in 2008 and is
promoted by Mrs. Geeta Malgatte. The firm is engaged in fabrication
of numerous equipment's at its manufacturing facility located at
Bhosari, Pune. The firm also provides services like erection &
commissioning of all kind of pumps and pumping systems, laying of
steel pipes & specials.
CHIDANAND BASAPRABHU: Ind-Ra Affirms BB Long lolTerm Issuer Rating
------------------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Chidanand
Basaprabhu Kore Sahakari Sakkare Karakhane Niyamit's (CBKSSKN)
Long-Term Issuer Rating at 'IND BB'. The Outlook is Stable. The
instrument-wise rating actions are given below:
-- INR2.550 bil. (increased from INR2.40 bil.) Fund-based
facilities affirmed with IND BB/Stable/IND A4+ rating; and
-- INR1,703.9 bil. (increased from INR420 mil.) Term loan due on
March 2032 affirmed with IND BB/Stable rating.
Key Rating Drivers
Liquidity Indicator - Stretched: CBKSSKN's average maximum
utilization of the working capital limit was comfortable at 25%
over the 12 months ended April 2023. Moreover, its cash flow from
operations improved to positive INR735 million in FY23 (FY22:
INR347 million, FY21: negative INR743 million) due to favorable
changes in the absolute working capital. Also, its working capital
reduced to INR2,565 million in FY23 (FY22: INR3,131 million) and
working capital cycle improved to 142 days (235 days), due to a
decrease in the inventory holding days to 105 (215). The company's
debtor period was 50 days in FY23 (FY22: 45 days) and payable
period was 13 days in FY23 (25 days). However, the liquidity is
stretched on account of limited access to capital markets. The
company has repayment obligations of INR103 million and INR182
million for FY24 and FY25, respectively.
The management has planned to increase their ethanol unit capacity
to 200,000l from 30,000l in FY24 at an estimated cost of INR1,800
million, out of which INR1,468 million was to be funded by term
loans and remaining through internal accruals. It has debtors
outstanding for more than two years amounting to INR480 million in
FY23. These debtors are mainly power units sold to discoms in the
past. Management is hopeful that the same will be recoverable in
FY24; however, if they are to be written off it could impact the
company's profitability and liquidity. CBKSSKN had cash and bank
balances of INR33 million in FY23 (FY22: INR171 million). Figures
for FY23 are provisional in nature.
The ratings reflect CBKSSKN's medium scale of operations. The
revenues improved to INR6,694 million in FY23 (FY22: INR5,427
million), mainly due to an increase in the volumes sold and higher
sugar price per MT backed by higher release of sugar quota. The
company sold 17,5211MT in FY23 (FY22: 107,460 MT) as against the
sugar price of INR3,3745 per MT (INR3,2221 per MT). Sugar accounted
for 80% of the total revenue in FY23 (FY22: 82%), followed by
molasses sale at 7% (5%) and ethanol sales at 6% (5%). CBKSSKN
commenced its crushing from 5 October 2022 and ended it on 19
February 2023, with a recovery rate of 11.67%. Management expects
the revenues to improve in the medium term, backed by an increase
in sugar sales and expansion in the ethanol segment.
The ratings also factor in an improvement in CBKSSN's modest credit
metrics. In FY23, the interest coverage (operating EBITDA/gross
interest) and the net financial leverage (adjusted net
debt/operating EBITDA) improved to 2x (FY22: 1.60x) and 4.91x
(6.01x), respectively, due to a reduction in the total debt to
INR3,395 million (INR3,794 million). The agency however expects the
company's credit metrics to deteriorate in the near term, owing to
the additional debt incurred for the expansion of ethanol division.
Moreover, CBKSSKN's EBITDA margin remained modest and deteriorated
to 10% in FY23 (FY22: 11%), due to an increase in the cost of goods
sold which accounted for 88% of the total revenue (87%). The ROCE
stood at 11.2% for FY23 (FY22: 8.4%).The management however the
expects the EBITDA margins to improve in the medium term, mainly
due to an increase in the sales from ethanol division.
The ratings however are supported by the presence of the main
institutional customer Hindustan Coca-Cola Beverages Private
Limited ('IND AAA'/Stable) that contributes 48% to the total
revenue. Hindustan Coca-Cola Beverages booked around 50,794 MT
sugar from CBKSSKN in FY23. However, there is no long-term
agreement between the two parties.
The ratings continue to be supported by CBKSSKN's extensive
operational track record of over four decades in the sugar
industry, which has led to its established relationships with
suppliers and customers.
Rating Sensitivities
Positive: Sustainability of revenue and profitability and interest
coverage above 1.5x, and successful completion of capex and an
improvement in the overall liquidity position, all on a sustained
basis, could lead to a positive rating action.
Negative: Any significant decline in the revenue or profitability,
leading to a further stretch in the liquidity position or any
deterioration in the credit metrics leading to interest coverage
less than 1.25x could result in a negative rating action.
Company Profile
CBKSSKN has an integrated sugar plant with a cane crushing,
distillery and power generation capacity of 10,000 tons of cane
crushed/day, 30,000 liter/day and 28.7MW, respectively, in Chikodi,
Karnataka.
CONSOLIDATED CONSTRUCTION: CARE Keeps D Ratings in Not Coop.
------------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of
Consolidated Construction Consortium Limited (CCCL) continue to
remain in the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 597.89 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 602.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Rationale and key rating drivers
CARE Ratings Ltd. had, vide its press release dated February 18,
2019, placed the ratings of CCCL under the 'issuer non-cooperating'
category as CCCL had failed to provide information for monitoring
of the rating. CCCL continues to be non-cooperative despite
repeated requests for submission of information through e-mails,
phone calls and a letter dated May 16, 2023, May 17, 2023, and May
22, 2023.
In line with the extant SEBI guidelines, CARE has reviewed the
rating on the basis of the best available information which
however, in CARE's opinion is not sufficient to arrive at a fair
rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Analytical approach: Standalone
Detailed description of the key rating drivers:
The rating takes into account delays in debt servicing. At the time
of last rating on June 16, 2022, the following were the key
rating strengths and weaknesses (updated for the information
available from stock exchange filings.)
Key weaknesses
* Delays in Debt servicing: CARE has noted that the company has
delays in debt servicing as per the stock exchange filings. The
company has been admitted into insolvency process on April 20,
2021, as per Insolvency and Bankruptcy Code, 2016. There were no
prospective bidders to buy the business within prescribed
timelines. As on May 12, 2023, Hon. NCLT, Chennai had pronounced
order to liquidate the company. Against the order, the promoters
appealed and got interim relief from NCLAT, Chennai on May 17,
2023. As per the Appellate tribunal order, no public announcement
of liquidation should be made till further orders.
Further the company has reported losses to the tune of INR132.13 Cr
in Fy22 and INR115.09 Cr in FY23 as per the stock exchange
filings.
CCCL was incorporated in 1997 by first-generation entrepreneurs Mr
R Sarabeswar, Mr S Sivaramakrishnan and Mr V G Janarthanam. CCCL is
primarily engaged in construction activities in commercial,
infrastructure, industrial and residential domain. CCCL has other
subsidiaries, namely, Consolidated Interiors Ltd (interior
contracts and fit out services), Noble Consolidated Glazing Ltd
(Glazing Services) and CCCL Power Infrastructure Ltd (BOP Orders
for Power Projects and food processing). Company is under corporate
Insolvency Resolution Process by NCLT order dated 20.04.2021. Mr.
Krishnasamy Vasudevan act as resolution professional.
EDGE BRAND: Insolvency Resolution Process Case Summary
------------------------------------------------------
Debtor: Edge Brand Architects (India) Private Limited
705, A wing, 7th Floor, Techno City,
Plot No X-4/1 & 4/2, TTC Industrial Estate,
Mahape, Navi Mumbai - 400701
Insolvency Commencement Date: May 23, 2023
Estimated date of closure of
insolvency resolution process: November 18, 2023
Court: National Company Law Tribunal, Mumbai Bench
Insolvency
Professional: Mr. Laxmikant Yeshwant Desai
503, Atharva, M B Raut Road,
Shivaji Park,
Dadar (West), Mumbai 400 028
Email: lydesai@hotmail.com
lyd.edge@gmail.com
Last date for
submission of claims: June 5, 2023
GANAPATI FISHING: ICRA Keeps B+ Debt Rating in Not Cooperating
--------------------------------------------------------------
ICRA has retained the long-term and short-term ratings for the bank
facilities of Ganapati Fishing Lines Pvt Ltd in the 'Issuer Not
Cooperating' category. The ratings are denoted as "[ICRA]B+
(Stable)/[ICRA]A4; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 5.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Short Term- 3.36 [ICRA]A4 ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Short Term- 10.50 [ICRA]A4 ISSUER NOT
Non Fund Based COOPERATING; Rating continues
Others to remain under 'Issuer Not
Cooperating' category
Long Term/ 16.14 [ICRA]B+(Stable)/[ICRA]A4;
Short Term- ISSUER NOT COOPERATING;
Unallocated Rating Continues to remain
under issuer not cooperating
category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Ganapati Fishing Line Pvt Ltd, incorporated in the year 1988, is a
family run business engaged in trading of flexible packaging films
like Polyester, BOPP films, aluminium foil and other polymers which
are used in variety of applications from packaging to electrical
insulation to decoration etc. The company domestically purchases
these flexible packaging films or imports from other countries. The
company is based out of Bangalore and has a branch in Chennai. The
company deals with customers of southern and eastern parts of
India.
GOLDEN AGRARIAN: Insolvency Resolution Process Case Summary
-----------------------------------------------------------
Debtor: Golden Agrarian Private Limited
Near Canal, Sadiq Road Faridkot,
Firozpur Punjab, 151203 India
Insolvency Commencement Date: May 24, 2023
Estimated date of closure of
insolvency resolution process: November 20, 2023
Court: National Company Law Tribunal, Chandigarh Bench
Insolvency
Professional: Naveen Singal
302, Tower 5, Valley View Estate,
Gwal Pahari Faridabad Road,
Gurgaon, Haryana - 122003
Email: Naveen.singal@yahoo.co.in
cirp.goldenagrarian@gmail.com
Last date for
submission of claims: June 7, 2023
GUPTA BUILDERS: CARE Keeps D Debt Rating in Not Cooperating
-----------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Gupta
Builders and Promoters Private Limited (GBPPL) continues to remain
in the 'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 50.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated June 1, 2022,
placed the rating(s) of GBPPL under the 'issuer non-cooperating'
category as GBPPL had failed to provide information for monitoring
of the rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. GBPPL continues to
be non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
April 17, 2023, April 27, 2023, May 7, 2023.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Analytical approach: Standalone
Outlook: Not Applicable
Incorporated in 2011, GBPPL is engaged in the development of
residential flats, independent plots and commercial & office
complexes.
HANUMAN RICE: CARE Keeps D Debt Rating in Not Cooperating Category
------------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Hanuman
Rice Industries (HRI) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 16.82 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated June 3, 2022,
placed the rating(s) of HRI under the 'issuer non-cooperating'
category as HRI had failed to provide information for monitoring of
the rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. HRI continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
April 19, 2023, April 29, 2023, May 9, 2023.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Hanuman Rice Industries (HRI) was established in 2010 by Mr.
Ramanarao Musalaiha Bolla and Mrs. Vijaylaxmi R. Bolla. The
promoters operate other group entities viz Hanuman Dal Industries,
Shree Laxmi Tirupati Amma Murmura Industries, Balaji Industries,
Tirumala Dal Udyog and Adinath Cold Storage Private Limited. The
firm is engaged in processing & milling of par boiled rice and sale
of its by–products like husk, rice bran etc. in the domestic
market. The processing unit is located at Kamptee, Nagpur.
HEM CERAMICS: ICRA Keeps B+ Debt Ratings in Not Cooperating
-----------------------------------------------------------
ICRA has retained the Long-Term and Short-Term rating of Hem
Ceramics in the 'Issuer Not Cooperating' category. The ratings are
denoted as [ICRA]B+(Stable)/[ICRA]A4; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 3.50 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Long Term- 1.22 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Term Loan to remain under 'Issuer Not
Cooperating' category
Short Term- 1.85 [ICRA]A4 ISSUER NOT
Non Fund Based COOPERATING; Rating continues
Others to remain under 'Issuer Not
Cooperating' category
Long Term/ 0.43 [ICRA]B+ (Stable)/[ICRA]A4;
Short Term- ISSUER NOT COOPERATING;
Unallocated Rating Continues to remain
under issuer not cooperating
category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due. Despite repeated requests by ICRA, the entity's management has
remained non-cooperative. The current rating action has been taken
by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Hem Ceramics (HC) was established in 1997 as a partnership firm by
Mr. Navneet and Mr. Ishwar. The firm is involved in manufacturing
of digitally printed glazed wall tiles. The manufacturing facility
of the firm is located in Morbi, Gujarat and is equipped with
installed capacity of 37500 metric tonnes per annum (MTPA). HC is
owned and managed by Mr. Ishwar and Mr. Ketu along with six other
partners.
JAGTIAL MUNICIPALITY: ICRA Keeps B+ Rating in Not Cooperating
-------------------------------------------------------------
ICRA has retained the Long-Term rating of Jagtial Municipality in
the 'Issuer Not Cooperating' category. The ratings are denoted as
[ICRA]B+(Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Issuer Rating - [ICRA]B+(Stable); ISSUER NOT
COOPERATING; Rating Continues
to remain under the 'Issuer
Not Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Jagtial Municipality (JM), constituted in 1952, provides urban
infrastructure services to the town of Jagtial and is governed by
the Telangana Municipalities Act, 2019. The JM covers an area of
30.3 sq. km. and serves a population of 1.20 lakh (projected for
FY2021). The limits of the ULB were expanded in 2018 as seven
nearby villages were merged with it. Its main functions include
water supply, SWM and construction, repair and maintenance of roads
and streetlights in its area. The JM is divided into 48 municipal
wards and is governed by an elected body (Council), headed by a
Chairperson, while the Commissioner acts as the chief executive,
overseeing its everyday functioning.
JANA CAPITAL: Ind-Ra Affirms B- NonConvertible Debts Rating
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has taken the following rating
actions on Jana Capital Limited's (JCL) non-convertible debentures
(NCDs):
-- INR16.5 mil. NCDs* affirmed; off Rating Watch with Negative
Implications with IND B-/Stable rating.
*Details in Annexure
Analytical Approach: To arrive at the rating, Ind-Ra continues to
take a consolidated view of JCL and its 100% subsidiary Jana
Holdings Limited (JHL; debt rated at 'IND B-'/Stable) as both the
entities have a cross-default clause with each other's
indebtedness. The rating also factors in the credit profile of Jana
Small Finance Bank (JSFB; 42.84% stake held by JHL), using Ind-Ra's
Rating FI Subsidiaries and Holding Companies criteria.
Ind-Ra has resolved the Rating Watch with Negative Implications and
affirmed the rating as JCL has refinanced its NCDs where the
repayments were due in May 2023 through an issuance of new NCDs.
However, JHL's financial strength remains limited. The value of its
investments is derived solely from its shareholding in JSFB which
is largely subject to the bank's incremental performance (banking
operations commenced in March 2018).
The rating reflects JCL and JHL's consistently deteriorating
financial risk profile as reflected in with net losses, weak
capitalization, stretched liquidity and high refinancing risks,
given their limited financial flexibility.
A common independent director serving on the Boards of Ind-Ra and
JCL did not participate in the meeting of their board of directors
or in the meeting of the rating committee, when the securities of
such rated client were being discussed.
Key Rating Drivers
High Refinancing and Valuation Risks for Holding Companies: The
issued NCDs continues to face high refinancing risks. JHL had
sizeable repayments of INR15.3 billion while JCL had INR3 billion,
both due in May 2023. In both cases, the NCDs have been repaid by
issuing new NCDs and there has been no default. The new NCDs have a
tenure of three years and carry a coupon of 3%. Although the
company was able to service its debt repayments, it still faces
refinancing risk which is reflected in JCL and JHL's consistently
deteriorating financial risk profile as reflected in net losses,
weak capitalization, stretched liquidity, given their limited
financial flexibility.
Liquidity Indicator for JCL - Poor: JCL does not have cash flows to
service its debt obligations and will have to depend on the
monetization of its stake in JSFB or the secondary sale of shares,
refinancing, among other options, before the maturity date of the
respective instruments. The agency expects no dividend income from
JSFB over the medium term. JHL is listing the bank. JHL and JCL are
also getting merged, for which, consent from the 90% creditors is
pending. Furthermore, the debt raised by both the holding companies
are in the form of zero-coupon bonds, which is leading to lumpy
pay-outs on maturity.
Weak Standalone Financial Profile for JCL: As per FY23 provisional
financials, JCL's earnings profile remained weak with a net loss of
INR3,570.2 million (FY22: net loss of INR2,748.5 million).
Moreover, JCL was unable to meet the minimum capital requirement of
30% as per the regulatory requirements for an non-banking
financial institute-core investment company (NBFI- CIC). JCL's FY22
auditor report indicated concerns related to the going concern
principle for JCL considering the accumulated losses, and the
resultant erosion in the net worth and breach of the regulatory
financial parameters as stated above.
Bank's Portfolio Mix in Favor of Secured Loans: JSFB is
strategically shifting towards a secured loan portfolio and the
share of secured portfolio in its portfolio increased to 55% at
FYE23 (FYE22: 47%). JSFB has also been lowering its group loan
exposure (FYE23: 3%, FYE22: around 16%, FYE21: 36%). Ind-Ra
believes the group loan portfolio will continue to decline with the
increasing share of secured portfolio. Ind-Ra believes this will
improve the bank's asset quality over the medium term.
COVID-19 Impact Continues to Weigh on JSFB's Asset Quality;
Seasoning of Secured Portfolio Remains to be Seen: JSFB's gross
non-performing assets stood at 3.6% at FYE23 (FYE22: 5.0%) with
from the majority comprising unsecured individual loan (46% of
gross non-performing assets. JSFB had written off assets worth
INR5.85 billion in 2022, mainly unsecured loans (group loans). The
net non-performing assets stood at 2.4% at FYE23 (FYE22: 3.4%,
FYE21: 5%, FYE20: 1.4%). The provision coverage stood at INR2.4
billion in March 2023 with a moderately low provision coverage
ratio of 34% in FY23 (FY22: 32%). However, given the increasing
proportion of secured loans in the portfolio, the bank is likely to
increase the provision cover only modestly over the medium term.
Modest Profitability Expectations; Credit Costs from Secured
Portfolio to be Seen: At FYE23, the company reported an
improved-but-modest profit of INR2.56 billion (FY22: INR0.05
billion, FY21: INR0.84 billion, FY20: INR0.3 billion). The bank's
credit cost increased to 3.3% in FY23 from 2.5% in FY20, mainly due
to the write-offs from the unsecured portfolio. The agency believes
the bank has the scale to be modestly profitable and expects the
credit costs to moderate with the rise of secured loans in the
portfolio, which could boost the profitability over the medium
term.
JSFB's Capital Ratios Remain Constrained: At FYE23, JSFB reported a
tier-1 capital ratio of 13.0% (FY22: 11.83%, FYE21: 11.75%) and a
total capital adequacy ratio of 15.6% (15.26%, 15.51%), both lower
than its peers'. Furthermore, since the bank's provisioning levels
are low and its net non-performing asset/equity was high at 26% at
FYE23 (FYE22: 42.7%), it will need to build higher capital buffers,
especially if the recovery slows. JSFB has been supported by
regular equity infusions in the past from investors with a capital
infusion of INR4.03 billion from January to December 2022. The bank
had also raised INR3.40 billion equity in FY20 (FY19: INR10.90
billion, FY18: INR16.40 billion) from existing and new investors.
As per the licensing guidelines, the bank was going to list itself
on the stock exchanges (Bombay Stock Exchange/National Stock
Exchange) by March 2021. However, it has been delayed due to the
COVID-19 pandemic, and thus, is still under process.
Liquidity Indicator for JSFB – Adequate: JSFB maintained excess
statutory liquidity reserves of INR25.75 billion in FY23, in
addition to the cash reserves that it needs to maintain as part of
the regulatory requirement. The bank's liquidity coverage ratio
stood at 553% at FYE23 (FYE22: 555%; FYE21: 1,199.67%). The bank
also had unutilized lines worth INR6.5 billion from refinancing
institutions at end-March 2023.
JSFB has also been able to mobilize substantial deposits, with the
term deposits increasing to INR130.4 billion in FY23 (FY22:
INR104.8 billion), and the current and savings accounts to INR32.9
billion (INR30.5 billion). The total deposits stood at INR163.3
billion at FYE23, of which, more than 80% have a tenor of more than
one year. Given the substantial traction in low-cost deposits,
JSFB's cost of funds improved to 6.7% in FY23 (FY22: 7.1%, FY20:
7.6%). The cost of funds was also supported by a rollover of
50%-60% of its fixed deposits, which were raised at high interest
rates two-to-three years ago. However, Ind-Ra expects the share of
the current account saving account to decline over the medium term
with a rise in the interest rates exerting some pressure on the
cost of funds.
Rating Sensitivities
Positive: The following event could collectively lead to a positive
rating action:
- a material improvement in the bank's capitalization and leverage
(advances to equity), provisioning levels and profitability earlier
than Ind-Ra's expectations
- a substantial improvement in the repayment capacity of the
holding companies
Negative: The following event could collectively lead to a negative
rating action:
- an inability to raise adequate funds by the holding companies
before refinancing, leading to
a default
- material deterioration in the operational or financial profile
of the bank
ESG Issues
ESG Factors Minimally Relevant to Rating: Unless otherwise
disclosed in this section, the ESG issues are credit neutral or
have only a minimal credit impact on JCL, due to either their
nature or the way in which they are being managed by the entity.
Company Profile
JCL was incorporated on March 26, 2015 to carry on the business of
an investment company and to invest, buy, sell or deal in any
share, stock, and debenture. The company received a certificate of
registration dated March 24, 2017 from the Reserve Bank of India as
a non-banking financial institution – non-deposit taking –
systematically important core investment company under section 45IA
of the Reserve Bank of India Act, 1934. JSFB had total advances of
INR161 billion and a diversified presence across 23 states and
union territories in India at end-December 2022.
JANA HOLDINGS: Ind-Ra Affirms B- NonConvertible Debts Rating
------------------------------------------------------------
India Ratings and Research (Ind-Ra) has taken the following rating
actions on Jana Holdings Limited's (JHL) non-convertible debentures
(NCDs):
-- INR10.38 mil. NCDs* affirmed; off Rating Watch with Negative
Implications with IND B-/Stable rating.
*Details in Annexure
Analytical Approach: To arrive at the rating, Ind-Ra continues to
take a consolidated view of the credit profiles of JHL and its 100%
parent Jana Capital Limited (JCL, debt rated at 'IND B-'/ Stable)
as both the entities have a cross-default clause with each other's
indebtedness. Ind-Ra also considers the credit profile of Jana
Small Finance Bank (JSFB; 42.84% stake held by JHL), using Ind-Ra's
Rating FI Subsidiaries and Holding Companies criteria.
JCL, a non-deposit taking non-bank finance company-core investment
company, holds 100% stake in JHL. JHL, a subsidiary of JCL, has
limited financial strength. It is a non-operating financial holding
company of JSFB and the value of its investments is derived solely
from its shareholding in JSFB. The value of the stake in JSFB is
largely subject to the bank's incremental performance (banking
operations commenced in March 2018).
Ind-Ra has resolved the Rating Watch with Negative Implications and
affirmed the ratings as JHL has refinanced its NCDs where the
repayments were due in May 2023 through an issuance of new NCDs.
However, JHL's financial strength remains limited. The value of its
investments is derived solely from its shareholding in JSFB which
is largely subject to the bank's incremental performance (banking
operations commenced in March 2018). Also, the requirement of
minimum promoter shareholding of 40% in the bank for five years
after the commencement of operations expired at end-March 2023.
A common independent director serving on the Boards of Ind-Ra and
JCL/JHL did not participate in the meeting of their Board of
Directors or in the meeting of the rating committee, when the
securities of such rated client were being discussed.
Key Rating Drivers
High Refinancing and Valuation Risks for Holding Companies: The
issued NCDs continue to face refinancing risks. The NCDs are
required to be repaid to the extent of the principal and the rate
of return promised to the investors. JHL had sizeable repayments of
INR15.3 billion due in May 2023. The same was repaid by issuing new
NCDs at the JCL level. Although the company was able to service its
debt repayments, it still faces refinancing risk which is reflected
in JHL and JCL's consistently deteriorating financial risk profile,
with net losses, weak capitalization, stretched liquidity, given
the limited financial flexibility of the company.
Weak Standalone Financial Profile for JHL: JHL's earnings profile
remains weak with a net loss of INR3,325 million in FY23 (FY22: net
loss of INR2,433.2 million). Its net worth turned negative to
negative INR245 million in FY23 (FY22: INR2,361.5 million).
Moreover, JHL is not meeting the minimum consolidated capital
adequacy ratio (CAR) of 15% and the standalone leverage ratio of
1.25x as per the regulatory requirements for a non-operating
financial holding company. It is also not meeting the minimum net
owned funds requirement. The auditor's report on JHL for FY22
mentions a material uncertainty related to a going concern,
considering the accumulated losses, the resultant erosion in the
net worth and the breaches in the regulatory financial parameters
as stated above.
Liquidity Indicator for JHL - Poor: JHL does not have cash flows to
service its debt obligations and will have to depend on the
monetization of its stake in JSFB or the secondary sale of shares,
refinance among other options, before the maturity date of the
respective instruments. The agency expects no/limited dividend
income from JSFB over the medium term and is in the process of
listing the bank. JHL and JCL are also in the process of getting
merged, for which consent from 90% creditors is pending. Ind-Ra
expects this merger to be completed over the near term.
Furthermore, the debt raised by both the holding companies are in
the form of zero-coupon bonds that would have lumpy pay-outs on
maturity, adding to the liquidity demands.
Bank's Portfolio Mix in Favor of Secured Loans: JSFB is
strategically shifting towards a secured loan portfolio, and the
share of secured portfolio in its portfolio increased to 55% at
FYE23 (FYE22: 47%). JSFB has also been lowering its group loan
exposure (FYE23: 3%, FYE22: around 16%, FYE21: 36%). Ind-Ra
believes the group loan portfolio will continue to decline with the
increasing share of secured portfolio. Ind-Ra believes this will
improve the bank's asset quality over the medium term.
COVID-19 Impact Continues to Weigh on JSFB's Asset Quality;
Seasoning of Secured Portfolio Remains to be Seen: JSFB's gross
non-performing assets stood at 3.6% at FYE23 (FYE22: 5.0%),
majority comprising unsecured individual loans at 46%. JSFB had
written off assets worth INR5.85 billion in 2022, mainly unsecured
loans (group loan). The net non-performing assets stood at 2.4% at
FYE23 (FYE22: 3.4%, FYE21: 5%, FYE20: 1.4%). The provision stood at
INR2.4 billion in March 2023 with a moderately low provision
coverage ratio of 34% in FY23 (FY22: 32%). However, given the
increasing proportion of secured loans in the portfolio, the bank
is likely to increase the provision cover only modestly over the
medium term.
Modest Profitability Expectations; Credit Costs from Secured
Portfolio to be Seen: At FYE23, JSFB reported improved-but-modest
profit of INR2.56 billion (FY22: INR0.05 billion, FY21: INR0.84
billion, FY20: INR0.3 billion). The bank's credit cost increased to
3.3% in FY23 from 2.5% in FY20, mainly due to the write-offs from
the unsecured portfolio. The agency believes the bank has the scale
to be modestly profitable and expects the credit costs to moderate
with the rise of secured loans in the portfolio, which could boost
the profitability over the medium term.
JSFB's Capital Ratios Remain Constrained: At FYE23, JSFB reported a
tier-1 capital ratio of 13.0% (FY22: 11.83%, FYE21: 11.75%) and a
total CAR of 15.6% (15.26%, 15.51%), both lower than its peers'.
Furthermore, since the bank's provisioning levels are low and its
net non-performing asset/equity was high at 26% at FYE23 (FYE22:
42.7%), it will need to build higher capital buffers, especially if
the recovery slows. JSFB has been supported by regular equity
infusions in the past from investors with a capital infusion of
INR4.03 billion from January to December 2022. The bank had also
raised INR3.40 billion equity in FY20 (FY19: INR10.90 billion,
FY18: INR16.40 billion) from existing and new investors. As per the
licensing guidelines, the bank was going to list itself on the
stock exchanges (BSE Ltd/National Stock Exchange of India Ltd) by
March 2021. However, it has been delayed due to the pandemic, and
thus, is still under process.
Liquidity Indicator for JSFB – Adequate: JSFB maintained excess
statutory liquidity reserves of INR25.75 billion in FY23, in
addition to the cash reserves that it needs to maintain as part of
the regulatory requirement. The bank's liquidity coverage ratio
stood at 553% at FYE23 (FYE22: 555%; FYE21: 1,199.67%). The bank
also had unutilized lines worth INR6.5 billion from refinancing
institutions at end-March 2023.
JSFB has also been able to mobilize substantial deposits, with the
term deposits increasing to INR130.4 billion in FY23 (FY22:
INR104.8 billion), and the current and savings accounts to INR32.9
billion (INR30.5 billion). The total deposits stood at INR163.3
billion at FYE23, of which more than 80% have a tenor of more than
one year. Given the substantial traction in low-cost deposits,
JSFB's cost of funds improved to 6.7% in FY23 (FY22: 7.1%, FY20:
7.6%). It was also supported by a rollover of 50%-60% of its fixed
deposits, which were raised at high interest rates two-to-three
years ago. However, Ind-Ra expects the share of the current account
saving account to decline over the medium term with a rise in the
interest rates exerting some pressure on the cost of funds.
Rating Sensitivities
Positive: The following event could collectively lead to a positive
rating action:
- a material improvement in the bank's capitalization and leverage
(advances to equity), provisioning levels and profitability earlier
than Ind-Ra's expectations
- a substantial improvement in the repayment capacity of the
holding companies
Negative: The following event could collectively lead to a negative
rating action:
- an inability to raise adequate funds by the holding companies
before refinancing, leading to
a default
- material deterioration in the operational or financial profile
of the bank
ESG Issues
ESG Factors Minimally Relevant to Rating: Unless otherwise
disclosed in this section, the ESG issues are credit neutral or
have only a minimal credit impact on JHL, due to either their
nature or the way in which they are being managed by the entity.
Company Profile
JHL is registered as a non-operating financial holding company
according to the regulatory guidelines, and is promoted by JCL, to
hold the promoter stake in JSFB.
JAWAHARNAGAR MUNICIPAL: ICRA Keeps B+ Rating in Not Cooperating
---------------------------------------------------------------
ICRA has retained the Long-Term rating of Jawaharnagar Municipal
Corporation in the 'Issuer Not Cooperating' category. The ratings
are denoted as [ICRA]B+(Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Issuer Rating - [ICRA]B+(Stable); ISSUER NOT
COOPERATING; Rating Continues
to remain under the 'Issuer
Not Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Jawaharnagar Municipal Corporation (NMC), an urban local body
(ULB), was recently constituted in 2019. It was converted into a
municipality from a gram panchayat in April 2019. In July 2019, it
was converted into a municipal corporation. The ULB provides urban
infrastructure services to the Jawaharnagar town and is governed by
the Telangana Municipalities Act 2019 (Act). The NMC covers an area
of 24.78 sq. km. and serves a population of 1.70 lakh (projected as
on date). Its main functions include solid waste management and
construction, repair and maintenance of roads and streetlights. The
ULB is divided into 28 municipal wards and is governed by an
elected body (Council) headed by a Mayor, while the Commissioner
acts as the chief executive overseeing its everyday functioning.
KSK ENERGY: Liquidation Process Case Summary
--------------------------------------------
Debtor: KSK Energy Company Private Limited
8-2-293/82A/431/A, Road No. 22, Jubilee Hills,
Hyderabad TG 500033 India
Liquidation Commencement Date: May 25, 2023
Court: National Company Law Tribunal Hyderabad Bench
Liquidator: Krishna Komaravolu
House No. 7-1-214,
Flat No. 409 Vamsikrishna Apartments,
Dharam Karan Road, Ameerpet
Hyderabad - 500016
Email: kkvolu@gmail.com
irp.kskecpl@gmail.com
Last date for
submission of claims: June 24, 2023
MAA BHUASUNI: Ind-Ra Affirms BB Long Term Issuer Rating
-------------------------------------------------------
India Ratings and Research (Ind-Ra) has affirmed Maa Bhuasuni
Roller Flour Mills' (MBRFM) Long-Term Issuer Rating at 'IND BB'.
The Outlook is Stable.
The instrument-wise rating actions are:
-- INR120 mil. Fund-based working capital limits affirmed with
IND BB/Stable rating; and
-- INR5.27 mil. Term loans due on November 2026 affirmed with
IND BB/Stable rating.
Key Rating Drivers
The affirmation reflects MBRFM's continued small scale of
operations. As per the financial numbers provided by the
management, the company's revenue improved 56.65% to INR1,460
million in FY23 (FY22: INR932 million; FY21:INR918.73 million), due
to a significant increase in wheat prices amid the ongoing
Ukraine-Russia war. However, Ind-Ra expects the firm's scale of
operations to decline in FY24, due to a fluctuation in wheat prices
following the normalization of the market and the capacity
utilization remaining at a similar level.
The ratings also reflect MBRFM's weak credit metrics, with the
gross interest coverage (operating EBITDAR/gross interest expense)
declining to 1.59x in FY22 (FY21: 1.64x), due to an increase in the
interest payments (INR28.61 million; INR27.42 million). The net
leverage (adjusted net debt/operating EBITDAR) reduced slightly to
3.3x in FY22 (FY21: 3.5x), due to the scheduled repayments of its
loans. The company's overall debt declined to INR147.65million in
FY22 (FY21: INR157.26 million). The agency expects its credit
metrics to have improved in FY23 and to continue to improve in
FY24, on the back of its scheduled debt repayments, leading to
improved leverage and lower interest costs.
Liquidity Indicator - Stretched: The maximum average utilization of
fund-based facilities was 96.61% during the 12-months ended April
2023. There had been no instances of over utilization in its
fund-based facilities. MBRFM enhanced its working capital limits to
INR180 million January 2023 onwards (FY22: INR120 million). The
cash flow from operations narrowed to negative INR8.86 million in
FY22 (FY21: negative INR52.43 million), due to an increase in the
working capital requirement following the improvement in its scale
of operations. As a result, its free cash flow remained negative
INR11.20 million (FY21: negative INR59.65million). The working
capital cycle remained elongated to 127 days in FY22 (FY21: 118
days), due to an increase in its inventory of raw materials (i.e.,
wheat) on account of bulk inventory kept at lower prices). Its
unencumbered cash and cash equivalent stood at INR1.32million at
FYE22 (FYE21: INR1.6million). MBRFM has debt repayments of INR9.50
million and INR5.30 million in FY24 and FY25, respectively.
Furthermore, the company does not have any capital market exposure
and relies on banks and financial institutions to meet its funding
requirements.
MBRFM had modest EBITDA margins, which remained almost stable at
4.88% in FY22 (FY21: 4.90%). Its margins improved on a sustained
basis over FY19-FY21. Till 9MFY23, MBRFM booked EBITDA margin of
3.85% (INR36 million), which declined due to an increase in the
cost of raw materials. The company's return on capital employed
declined to 10.5% in FY22 (FY21: 11.3%). For FY23, Ind-Ra expects
the margins to have remained at the similar level and for FY24, the
agency sees the margins fluctuating with the movement in the wheat
prices.
The ratings, however, are supported by the promoters' over three
decades of experience in the flour milling industry, leading to
established relationships with customers and suppliers.
Rating Sensitivities
Negative: A deterioration in the scale of operations, leading to a
deterioration in the credit metrics with the interest coverage
falling below 1.5x, on a sustained basis, and a weakening of the
liquidity position will be negative for the ratings.
Positive: A substantial increase in the scale of operations, with
an improvement in liquidity with the interest coverage exceeding
2x, on a sustained basis, will be positive for the ratings.
Company Profile
MBRFM, established in 1984, processes wheat products such as white
flour, semolina, flour, and bran. The total installed capacity of
the firm is 210 million tons per day.
MAHAK SYNTHETIC: Ind-Ra Affirms BB+ Long Term Issuer Rating
-----------------------------------------------------------
India Ratings and Research (Ind-Ra) has revised Mahak Synthetic
Mills Private Limited's (MSMPL) Outlook to Stable from Positive,
while affirming its Long-Term Issuer Rating at 'IND BB+'.
The instrument-wise rating actions are:
-- INR300 mil. (reduced from INR350 mil.) Fund-based working
capital limits affirmed; Outlook revised to Stable from
Positive with IND BB+/Stable rating; and
-- INR65 mil. (increased from INR60 mil.) Term loan due on
November 30, 2030 affirmed; Outlook revised to Stable from
Positive with IND BB+/Stable rating.
ANALYTICAL APPROACH: Ind-Ra has changed its rating approach to
taking a standalone view of MSMPL from the consolidated view of the
issuer, along with its group companies, as there are neither any
parent-subsidiary linkages nor any inter-corporate guarantees
present among these companies.
The Outlook revision reflects MSMPL's EBITDA margins remaining
modest in FY23 and declining consistently since FY22, despite an
increase in its revenue.
Key Rating Drivers
The Outlook revision and affirmation reflect a continuous decline
in MSMPL's EBITDA margins since FY22 while there is steady revenue
growth. The revenue continued to improve to INR6,618 million in
FY23 (FY22: INR4,959 million, FY21: INR2,595 million), due to a
recovery in sales post the COVID-19 impact. However, its EBITDA
margin further reduced to below 2% in FY23 (FY22: 2.11%; FY21:
4.33%) due to increased share of low-margin yarn dying in the sales
mix since FY22. Additionally, the prices of yarn have increased
since FY22 which is used as a raw material for manufacturing denim
fabric, thereby increasing its overall cost of production and
ultimately fetching lower margins. The EBITDA margin remained
modest marked by ROCE of 5.4% in FY23 (FY22: 4.5% FY21: 5.1%). FY23
financials are provisional in nature. Ind-Ra expects the revenue to
slightly improve in the near to medium term owing the expected
completion of the ongoing capex in the near term. However, the
margin are expected to remain at a similar level for FY24 due to
unstable cotton market conditions.
Liquidity Indicator - Stretched: MSMPL's average maximum use of
the working capital limits was 64% during the 12 months ended March
2023. It is likely to have remained at a similar level since then.
Its cash flow from operations reduced to INR127 million in FY23
(FY22: INR242 million, FY21: negative INR191 million). Also, it had
a low cash balance of INR1.96 million in FY23 (FY22: INR3.7
million; FYE21: INR3.7 million), as against outstanding debt of
INR638.08 million (INR760 million, INR984 million).MSMPL has a debt
repayment of around INR46 million and INR48 million in FY24 and
FY25, respectively.
The ratings factor in MSMPL's modest credit metrics. The interest
coverage (operating EBITDA/gross interest expenses) improved to
2.61x in FY23 (FY22: 1.52x, FY21: 1.94x), on account of a reduction
in the interest cost and an increase in absolute EBITDA to INR121
million (INR104 million, INR112 million). Moreover, the net
leverage (net debt/EBITDA; excluding unsecured loans) improved to
5.25x in FY23(FY22: 7.23x, FY21: 8.73x) owing to a decrease in debt
level due to the term loan raised for capital expenditure.
Management expects the absolute EBITDA to gradually increase,
considering the ongoing capacity expansion in the group companies
which will eliminate the processing cost. Ind-Ra expects the credit
metrics to remain modest during FY24.
The company faces intense competition in the highly-fragmented
textile industry, which largely has several unorganized small-sized
players. Furthermore, entry barriers are low on account of low
capital requirement and technology intensity, and low
differentiation in end-products.
The ratings however are supported by MSMPL's promoters' experience
of over three decades in the textile industry. This has led to
strong ties with customers and suppliers. Moreover, the company has
pan-India operations which mitigates any geographical concentration
risk. Also, the company continues to benefit from its healthy
operational synergies with its group companies due to their
vertically integrated operations with presence in yarn
manufacturing, weaving and processing. Additionally, its backward
integration of operations supports profitability and keeps working
capital requirements low.
Rating Sensitivities
Negative: A decline in the scale of operations or deterioration in
the liquidity position with the net leverage remaining above 5.0x
on a sustained basis would be negative for the ratings.
Positive: An increase in the scale of operations, an improvement in
the liquidity position with the net leverage reducing below 4.0x,
all on a sustained basis, would be positive for the ratings.
Company Profile
Established in 1981, MSMPL is engaged in the processing of
converting grey cloth into finished cotton and blended cotton
fabric. The company purchases raw materials mainly from its group
companies and from Ahmedabad, and after conversion, it sells the
finished product in the domestic market.
MINI CONSTRUCTION: ICRA Keeps B+ Debt Ratings in Not Cooperating
----------------------------------------------------------------
ICRA has retained the Long-Term and Short Term rating of Mini
Construction in the 'Issuer Not Cooperating' category. The ratings
are denoted as [ICRA]B+(Stable)/[ICRA]A4; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 1.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Long Term/ 11.00 [ICRA]B+(Stable)/[ICRA]A4;
Short Term- ISSUER NOT COOPERATING;
Non-Fund Based Rating Continues to remain
Others under issuer not cooperating
category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due. Despite repeated requests by ICRA, the entity's management has
remained non-cooperative. The current rating action has been taken
by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Mini Constructions (MC) was established in 1990 as a partnership
firm with Mr. Dilip Pandey and Mr. Pradip Pandey as its partners.
It is involved in construction of roads and bridges in Jharkhand
for various government departments. MC works for government bodies
like the Road Construction Department (RCD) Jharkhand, the Rural
Works Department (RWD), Jharkhand and the State Highway Authority
of Jharkhand (SHAJ).
MODRINA AUTO: ICRA Keeps B+ Debt Ratings in Not Cooperating
-----------------------------------------------------------
ICRA has retained the Long-Term rating of Modrina Auto Enterprises
in the 'Issuer Not Cooperating' category. The ratings are denoted
as [ICRA]B+(Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 7.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Long Term- 9.00 [ICRA]B+ (Stable) ISSUER NOT
Unallocated COOPERATING; Rating continues
to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Modrina Auto Enterprises (MAE) was set up as a proprietorship firm
by Mr. Modrick Nongkynrih in 1997. MAE is an authorized dealer of
Tata Motor Limited's Commercial vehicle (CV) and Passenger vehicle
(PV) in Shillong and is involved in the sale of vehicles (new and
pre-owned), sale of spare parts and servicing/repairing of
vehicles. At present, the firm deals in various models of PVs of
TML except Jaguar & Land Rover. In the CV segment, MAE deals in the
entire range of Tata trucks and buses including light commercial
vehicles (LCV), medium & heavy commercial vehicles (M&HCV) and
small trucks.
NORTHERN ARC: ICRA Reaffirms D(SO) Rating for INR0.48cr PTCs
------------------------------------------------------------
ICRA has reaffirmed the rating for the pass-through certificates
(PTCs) issued under a securitisation transaction originated by
multiple originators and arranged by Northern Arc Capital Limited
(NACL; rated [ICRA]AA- (Stable)/[ICRA]A1+).
Amount
Trust Name Instrument (INR crore) Ratings
---------- ---------- ----------- -------
IFMR Capital Mosec PTC Series A2 0.48 [ICRA]D(SO);
Enigma 2016 reaffirmed
The transaction is backed by microloan receivables given to
individuals by seven entities – Fino Finance Private Limited
(FFPL), Pahal Financial Services Private Limited, S.M.I.L.E.
Microfinance Limited, S V Creditline Private Limited (SVCL), Svasti
Microfinance Private Limited, IIFL Samasta Finance Limited
(erstwhile Samasta Microfinance Limited) and Sambandh Finserve
Private Limited. The receivables have been assigned to the IFMR
Capital Mosec Enigma 2016 trust at a premium
and the trust has issued PTCs backed by the same.
The PTCs carried an eventual promise of principal payouts and a
monthly promise of interest payouts. The rating reflects the
inadequacy of the pool's collections as well as the available
credit enhancement, in respect of two originators (FFPL and
Samasta), to meet the promised payouts to the PTC Series A2
investors on the scheduled maturity date in April 2018. The
incremental overdue collections in the pool remain low.
Key rating drivers and their description
Credit strengths
* Not applicable
Credit challenges
* Pool's collections along with available credit enhancement were
insufficient to meet the promised payouts to the PTC Series A2
investors on the maturity date Description of key rating drivers
highlighted above The collection performance of all the underlying
sub-pools was healthy till the October 2016 collection month.
However, post demonetisation, the monthly collection levels
declined significantly. Due to the weak performance, there has been
a shortfall in meeting the scheduled payouts to the PTC Series A2
investors even after the utilisation of the entire credit
enhancement available from the originators in the transaction. The
recent average 3-month overdues collection from the pool was very
low.
Key rating assumptions
Not applicable
Liquidity position: Poor
On the scheduled maturity date of this transaction, the cash
collateral (CC) was fully utilised. Further repayments are to be
met through collections from the overdue loan contracts.
Considering the collection trend in recent months, the full
repayment of the PTCs is unlikely in the near to medium term.
Fino Finance Private Limited (FFPL) is a microfinance institution
(MFI) and a non-deposit accepting non-banking financial company
(NBFC) registered with the Reserve Bank of India (RBI). It was
acquired by FINO PayTech Limited (FPL) in 2010. The company
provides microfinance loans to women and had a network of 174
branches spread over 90 districts in six states, namely
Maharashtra, Madhya Pradesh, Uttar Pradesh, Bihar, Chhattisgarh and
Jharkhand, as on June 30, 2021. It subsequently witnessed a
reduction in its business and the closure of branches, etc, and its
net on-book portfolio is estimated at INR6 crore as on March 31,
2022.
RELIGARE FINVEST: ICRA Reaffirms D Rating on INR120cr LT Bonds
--------------------------------------------------------------
ICRA has reaffirmed ratings on certain bank facilities of Religare
Finvest Limited (RFL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term 120.0 [ICRA]D; reaffirmed
bonds/NCD/LTD
Long-term/ 909.7 [ICRA]D/[ICRA]D; reaffirmed
Short-term and withdrawn
fund-based
bank limits
Rationale
The rating takes into account the sustained delays in the servicing
of RFL's secured debt obligations till December 2022 and the
ongoing delays in the servicing of the unsecured debt obligations.
In January 2018, RFL was put under the Corrective Action Plan (CAP)
by the Reserve Bank of India (RBI), whereby it is prohibited from
expanding its credit/investment portfolio other than investments in
Government securities. Due to asset-liability mismatches, from
April 2019, RFL delayed/did not repay its bank loans on account of
the proposed resolution plan. Accordingly, the company had proposed
a revised Debt Resolution Plan (DRP) to its lenders for the
restructuring of its debt, with its parent company, i.e. Religare
Enterprises Limited (REL), continuing as its promoter. This was to
revive its business and to ensure the proper alignment of its
asset-liability profile. However, the RBI had advised that the
restructuring of the company could not be implemented with REL
continuing as its promoter since the company was declared a 'fraud'
exposure by the lenders. Subsequently, RFL proposed a one-time
settlement (OTS) as an alternative way to revive the business. RFL,
with the support of REL, entered into an OTS agreement on December
30, 2022 with 16 lenders (OTS lenders) for the full and final
settlement of all the outstanding dues of its secured borrowings
and two unsecured borrowings. RFL paid about 82.7% of the
settlement amount to the secured lenders by December 31, 2022 and
completed the OTS by making the full and final payment of INR400
crore on March 8, 2023. Business operations are expected to revive
only after the settlement of the outstanding dues on the existing
unsecured bank facilities and debentures and the removal of the CAP
imposed by the RBI.
ICRA has reaffirmed and withdrawn the rating assigned to the
INR909.7-crore bank facilities as these have been repaid with no
amount outstanding against the same and No Dues Certificates have
been received from the OTS lenders, in accordance with ICRA's
policy on withdrawal (click here for the policy).
Key rating drivers and their description
Credit challenges
* Poor liquidity and reduced financial flexibility: Given the
legacy issues, delayed capital support from REL and challenges in
raising incremental funding, RFL's liquidity position remains poor.
The asset-liability mismatches have led to a delay in its debt
repayments. RFL's financial flexibility remains adversely impacted
by its weak asset quality profile and the lack of business growth
in the last few years. The company had entered into an OTS
agreement on December 30, 2022 with 16 lenders (OTS lenders) for
the full and final settlement of all the outstanding dues of its
secured borrowings and two unsecured borrowings and completed the
OTS agreement in March 2023. The company is yet to settle the
outstanding dues of the unsecured borrowings (amounting to INR330
crore as on March 31, 2023) and progress on this will remain a
monitorable.
* Shrinking asset base with no fresh disbursements: RFL's business
operations have been curtailed since it was put under the CAP by
the RBI in January 2018, whereby it is prohibited from expanding
its credit/investment portfolio other than investments in
Government securities. With no fresh disbursements in the last few
years, RFL's gross loan book declined to INR2,109 crore as on March
31, 2023 from INR3,981 crore as on March 31, 2022. The company
would require capital support from the parent to fund fresh
business and to stabilise its capitalisation profile, which has
deteriorated.
* Weak asset quality: RFL's asset quality indicators remain weak
with high gross non-performing advances (GNPA%) of 78.0% (79.9% as
on March 31, 2022) primarily due to the significant delinquencies
in the non-core asset book. However, the company had already
provided against GNPAs, thereby, reducing net non-performing
advances (NNPA%) to 2.2% as on March 31, 2023 (23.6%as on March 31,
2022). ICRA notes that the company has derecognised 60% of the
corporate loan book (CLB) amounting to INR~1,222 crore as on March
31, 2023, which led to a reduction in the absolute GNPAs, though
the ratio was impacted by the base effect. Nevertheless, the
company's ability to make collections from the remaining standard
small and medium-sized enterprises (SME) loan book and restart the
business would be important for improving its financial position.
Liquidity position: Poor
RFL's liquidity position remains poor, given the ongoing delay in
debt servicing. As per the asset liability maturity (ALM) profile
as on March 31, 2023, RFL had debt maturities of INR330 crore for
the 12-month period ending March 31, 2024 against which its
scheduled inflows from performing advances were INR165 crore during
the same period. ICRA notes that the company would not be able to
repay the entire balance debt without any capital support or unless
a settlement is reached with the remaining unsecured lenders.
Rating sensitivities
Positive factors – Timely debt repayment on a sustained basis
could be a positive trigger.
Negative factors – Not applicable
RFL was originally incorporated as Skylark Securities Private
Limited in 1995. It was converted into a public limited company,
Fortis Finvest Limited, in 2004. In March 2006, the company changed
its name to Religare Finvest Limited. RFL is a subsidiary of REL.
The company's on-balance sheet portfolio stood at INR2,109 crore as
on March 31, 2023 (INR3,981 crore as on March 31, 2022). It
provides loan against property (LAP) and working capital (WC) loans
to SMEs.
RFL reported a profit after tax (PAT) of INR2,925 crore in FY2023
on a total gross asset base of INR2,863 crore as on March 31, 2023
compared to a net loss of INR1,747 crore in FY2022 on a total gross
asset base of INR6,884 crore as on March 31, 2022. Its net worth
increased to INR675 crore as on March 31, 2023 from -Rs. 2,271
crore as on March 31, 2022 on account of the writeback of
borrowings (principal + interest), which led to a one-time
exceptional gain of INR3,289.4 crore. The company reported GNPA (%)
of 78.0% and NNPA (%) of 2.2% as on March 31, 2023 compared to
79.9% and 23.6%, respectively, as on March 31, 2022.
RIYAN PAPER: ICRA Keeps B+ Debt Ratings in Not Cooperating
----------------------------------------------------------
ICRA has retained the Long-Term rating of Riyan Paper Mill in the
'Issuer Not Cooperating' category. The ratings are denoted as
[ICRA]B+(Stable); ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 3.50 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Long Term- 5.90 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Term Loan to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due but despite repeated requests by ICRA, the entity's management
has remained non-cooperative. The current rating action has been
taken by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
RPM was incorporated as a partnership firm in April 2015, by Mr.
Nasinbanu Suhil Lakhani and Mr. Sohil Barkatali Lakhani with equal
profit-sharing ratio. The firm manufactures kraft paper with an
installed capacity of 26,000 metric tonne per annum (MTPA). The
manufacturing facility of the firm, located in the Surat district
of Gujarat, started operations in February–March 2017. Before
this, it was involved in the trading of various paper types.
SAHDEV JEWELLERS: CARE Keeps D Debt Rating in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Sahdev
Jewellers (SJ) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Short Term Bank 51.40 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Rationale and Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated June 7, 2022,
placed the rating(s) of SJ under the 'issuer non-cooperating'
category as SJ had failed to provide information for monitoring of
the rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. SJ continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
April 23, 2023, May 3, 2023, May 13, 2023.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Mr. Ravi Sahdev (son of Mr. Vasdev Sahdev) as partners. During
FY17, the constitution of the firm has been changed to a
proprietorship firm following demise of Mr. Vasdev Sahdev. The firm
is an export oriented unit and is engaged in manufacturing, trading
and export of plain gold Jewellery. The firm has a manufacturing
unit at SEZ (Special Economic Zone) in Noida, Uttar Pradesh and has
a wholesale outlet in Karol Bagh, Delhi.
SANGHI INDUSTRIES: Ind-Ra Cuts Long Term Issuer Rating to 'D'
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has downgraded Sanghi
Industries Limited's (SIL) Long-Term Issuer Rating to 'IND BB' from
'IND BB+/Stable'. The Outlook is Negative.
The instrument-wise rating actions are:
-- INR5.783 bil. Term loan due on FY31 downgraded with IND BB/
Negative rating;
-- INR2.80 bil. Non-convertible debentures (NCDs) ISIN
INE999B07036 issued on February 23, 2021 14/15/16/18* due on
February 23, 2027 downgraded with IND BB/Negative rating;
-- INR1.850 bil. Fund-based limits downgraded with IND BB/
Negative rating; and
-- INR1.40 bil. Non-fund-based limits^ affirmed with IND A4+
rating.
^INR400 million interchangeable with fund-based limits
*first 12 months/13-24 months/25-36 months/37th month onwards
The downgrade and Negative Outlook reflect a likelihood of SIL's
weaker-than-expected performance in FY24 and the resultant weak
liquidity position.
Key Rating Drivers
FY24 Performance likely to be Significantly Weaker than Expected;
Recovery in 2HFY24 Contingent upon Volume and EBITDA Improvement:
In November 2022, SIL raised INR5 billion through the issuance of
NCDs to Kotak Special Situations Fund and INR0.5 billion through an
equity infusion from the promoters, which was used for the
reduction of its debt (prepayment of term debt: INR2.1 billion; the
reduction of working capital debt: INR1 billion) and to fund the
operational requirements. With the resolution of immediate
liquidity challenges, Ind-Ra had expected SIL's performance to
improve 4QFY23 and the company to be able to meaningfully ramp up
its volume and profitability FY24 onwards, which would have
supported its interest obligations for FY24 and negligible
repayments of INR20 million-25 million. However, against a
mid-single-digit growth at the industry level, SIL's sales volumes
were down 44% yoy to 0.4 million tons (mnt) in 4QFY23, indicating
that the disruptions faced by the company over the past few months
have affected the marketability of its product. This led to
suboptimal variable costs as well as lower fixed cost absorption,
which in turn led to EBITDA losses in 4QFY23. Furthermore, SIL's
cement sales volumes fell 17% yoy to 1.7mnt in FY23, leading to it
reporting negative EBITDA of INR0.1 billion (4QFY22: INR0.4
billion; FY22: INR1.9 billion).
While the core industry data indicates 11.6% yoy growth for the
Indian cement industry in April 2023, Ind-Ra believes that SIL
could continue to witness a volume decline in 1QFY24 with a
meaningful recovery unlikely before 3QFY24, with the pace
contingent on the company's ability to grow volumes while improving
profitability. As a result, the agency expects SIL's performance in
FY24 to be significantly lower than earlier expectations.
Liquidity Indicator – Poor: While SIL has minimal repayment
obligations in FY24 as it had prepaid most of its principal
obligations for the year, its interest obligations remained high
(4QFY23: INR0.7 billion). Excluding redemption premium, the
interest servicing obligations could be INR0.5 billion-0.6 billion
each quarter. SIL's utilization of its working capital limits
during the 12 months ended April 2023 remained high at above 90%,
indicating a limited cushion of around INR0.2 billion. There was an
instance of devolvement in the letter of credit (LC) in the first
fortnight of May 2023 and the management stated that the LC
devolvement has not exceeded 30 days and has been regularized. The
management has also indicated that the same is not because of
inadequate liquidity in the company but due to the difference in
the understanding of the treatment of the debt service reserve
account balance, and they are in discussion with the lender to
resolve the same.
Ind-Ra will continue to monitor the developments and the inability
of the company to resolve it and settle the outstanding dues within
30 days from the date of the devolvement would be negative for the
ratings. The promoters infused over INR0.27 billion in SIL during
April-May 2023 and the management stated that additional funds
would be infused as needed. The promoters in May 2023 monetized
some assets, which provide visibility towards the immediate
liquidity infusion and are exploring multiple avenues to shore up
liquidity. Considering the minimal unencumbered cash on balance
sheet (FYE23: INR9.2 million; FYE22: INR1.4 million) and limited
operational cash flow generation, a significant fund infusion by
the promoters would be essential for the company to timely service
its debt obligations in FY24. Thereafter, the company has scheduled
repayment of around INR1.7 billion in FY25 in addition to the
interest expense. Furthermore, the NCDs issued in November 2022
have a three-year bullet maturity and the company would need a
large fund infusion to meet the same.
Credit Metrics likely to Remain Weak in FY24: With a negative
EBITDA, SIL's credit metrics were weak in FY23. While the fund
infusion had provided a temporary respite to the liquidity, SIL's
net debt increased to around INR15.3 billion at FYE23 (FYE22:
INR13.3 billion) as 90% of the fund infusion of INR5.5 billion was
in the form of debt. With the likelihood of a weaker-than-earlier
expected performance, Ind-Ra expects the net leverage (net
debt/EBITDA) to remain high in FY24 and the gross interest coverage
(gross interest expense/operating EBITDA) to remain under pressure
(FY22: 2.3x; FY21: 3.3x), with the pace of deleveraging contingent
on the recovery in EBITDA.
The company completed a large capex towards its 3.3mnt clinker and
2mnt grinding unit in Kutch in February 2021 after a delay of
around a year exacerbated by COVID-19. However, with the new unit
being under the stabilization process till 3QFY22 and a slow
recovery in demand in the western region post COVID-19, SIL's total
sales volumes stood at 2.3mnt during FY22 (FY21: 2.1mnt), lower
than the annual sales volumes of 2.4-2.9mnt over FY17-FY19. The
capex of around INR16.6 billion over FY19-FY22 (including the
expansion), the production issues faced by the company and the hit
on sales demand due to COVID-19 led to the deterioration in the net
leverage from a comfortable level of 1.5x in FY18 to a peak of 6.2x
in FY20. After improving to 5.7x in FY21, the net leverage
deteriorated to 7.0x in FY22, due to the decline in the EBITDA.
Robust Business Profile despite Limited Geographical
Diversification: SIL is the third-largest cement company in
Gujarat. The company completed its capex in February 2021, which
resulted in a significant increase in its grinding capacity to
6.1mnt from 4.1mnt and clinker capacity to 6.6mnt from 3.3mnt. Post
the capex completion, SIL has a 130MW multi-fuel captive thermal
power plant and a 13MW waste heat recovery system, which fulfils
its entire power requirements. Also, SIL has a multi-fuel kiln (pet
coke, coal, and lignite), which enables it to switch fuels
depending on their prices. Moreover, the company can source lignite
at competitive rates, given its proximity to Gujarat Mineral
Development Corporation's lignite mines. SIL also has a private
jetty for exporting clinkers to countries such as Sri Lanka, the
UAE and Africa. The private jetty also assists SIL in accessing
other Indian states on the coastal line for clinker sales and
import pet coke and coal directly to the plant.
While SIL had historically been a strong player in Gujarat, its
geographical presence remains limited, as the state constitutes
80%-85% of the company's total cement sales. The company also sells
cement in Rajasthan, Maharashtra and Kerala.
Rating Sensitivities
Positive: A significant recovery in the EBITDA, leading to a
significant improvement in the financial profile and liquidity,
with EBITDA interest coverage remaining above 1.5x, all on a
sustained basis, could lead to the Outlook revision to Stable.
Negative: Continued weakness in profitability and/or a
sharper-than-expected increase in working capital requirements,
leading to a deterioration in the liquidity position, could be
negative for the ratings.
ESG Issues
ESG Factors Minimally Relevant to Rating: Unless otherwise
disclosed in this section, the ESG issues are credit neutral or
have only a minimal credit impact on SIL, due to either their
nature or the way in which they are being managed by the entity.
Company Profile
Incorporated in 1985, SIL has a grinding capacity of 6.1million
metric tons per annum (mmpta) and a clinker capacity of 6.6mmtpa.
It also has a 130MW captive thermal power plant, captive mines, a
water de-salination facility, and a captive port in Kutch which can
handle 1mmtpa of cargo. SIL sells ordinary portland cement,
portland pozzolana cement and portland slag cement in Gujarat,
Rajasthan, Maharashtra and Kerala and international markets of the
Middle East, Africa and the Indian sub-continent.
SHYAM AGRO: ICRA Moves B+ Debt Rating to Not Cooperating Category
-----------------------------------------------------------------
ICRA has moved the ratings for the bank facilities of Sri Shyam
Agro Traders (SSAT) to the 'Issuer Not Cooperating' category. The
rating is denoted as "[ICRA]B+(Stable)/[ICRA]A4; ISSUER NOT
COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 10.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based COOPERATING; Rating moved to
the 'Issuer Not Cooperating'
category
Short term– 2.00 [ICRA]A4 ISSUER NOT
Fund Based COOPERATING; Rating moved to
the 'Issuer Not Cooperating'
category
ICRA has been trying to seek information from the entity to monitor
its performance but despite repeated requests by ICRA, the entity's
management has remained non-cooperative. The current rating action
has been taken by ICRA basis the best available information on the
company's performance. Accordingly, the lenders, investors and
other market participants are advised to exercise appropriate
caution while using this rating as it may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Incorporated in 2007, SSAT trades in cotton bales, cotton yarn,
cotton seeds and de-oiled cake. The firm started its operations by
selling cotton bales in domestic markets. It commenced exporting
cotton bales from 2014, primarily to Bangladesh, China and
Malaysia. The proprietor has an experience of two decades in this
industry. The firm is located in Adilabad region of Telangana,
which is the cotton belt of the state. SSAT has been recognized as
an export House by the Director General of Foreign Trade with
effect from April 2014.
SHYAMALI COLD: CARE Keeps D Debt Ratings in Not Cooperating
-----------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Shyamali
Cold Storage Private Limited (SCSPL) continue to remain in the
'Issuer Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 4.71 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 0.25 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated May 10, 2022,
placed the rating(s) of SCSPL under the 'issuer non-cooperating'
category as SCSPL had failed to provide information for monitoring
of the rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. SCSPL continues to
be noncooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
March 26, 2023, April 5, 2023, April 15, 2023.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Analytical approach: Standalone
Outlook: Not Applicable
Shyamali Cold Storage Private Limited (SCSPL) was incorporated on
March 3, 2004 by Mr. Ratan Rudra, Mr. Sukhendu Rudra, Mr. Suvendu
Rudra and Mrs. Shyamali Rudra. SCSPL is engaged in the business of
providing cold storage facility primarily for potatoes to local
farmers and traders on rental basis. The cold storage facility is
located at Burdwan, West Bengal. Besides providing cold storage
facility, the company also provides interest bearing advances to
farmers for their agricultural activities against the bonds
receipts of potato stored. The day to day operations of the company
are being managed by Mr. Ratan Rudra with appropriate support from
other co-directors.
SIDDHIVINAYAK COTFAB: Ind-Ra Affirms BB+ Long Term Issuer Rating
----------------------------------------------------------------
India Ratings and Research (Ind-Ra) has revised the Outlook on
Shree Siddhivinayak Cotfab Private Limited (SSCPL) to Stable from
Positive while affirming the Long-Term Issuer Rating at 'IND BB+'
and has simultaneously withdrawn the rating.
The instrument-wise rating actions are:
-- INR80 mil. (reduced from INR100 mil.) Fund-based working
capital limits# affirmed; Outlook revised to Stable from
Positive; withdrawn; and
-- INR105 mil. (reduced from INR160 mil.) Term loan# due on
August 29, 2025 affirmed; Outlook revised to Stable from
Positive; withdrawn.
#Affirmed at 'IND BB+'/Stable before being withdrawn
ANALYTICAL APPROACH: Ind-Ra has changed its rating approach for
SSCPL to a standalone view from the consolidated view along with
its group companies as the issuer has no parent-subsidiary linkages
and no inter-corporate guarantee among the group companies
Ind-Ra is no longer required to maintain the ratings, as the agency
has received a no-objection certificate from the lenders. This is
consistent with Ind-Ra's Policy of Rating Withdrawal. Ind-Ra will
no longer provide analytical and rating coverage for SSCPL.
The Outlook revision reflects a decline in SSCPL's EBITDA margin
despite an increase in its revenue in FY23.
Key Rating Drivers
SSCPL continues to have a medium scale of operations with its
revenue improving to INR3,125 million (FY22: INR1,861 million;
FY21: INR907 million), led by a recovery in its operations from
COVID-19-led disruptions and new sales orders. However, its EBITDA
margin reduced to 1.98% in FY23 (FY22: 4.03%; FY21: 8.39%), due to
increased prices of yarn, which is its major raw material for
manufacturing grey clothes, since FY22, leading to increased
overall production costs. The return on capital employed stood at
6.8% in FY23 (FY22:8.4%; FY21: 8.8%). Its FY23 numbers are
provisional in nature. Ind-Ra expects the revenue and margin to
remain in the similar level in FY24, in absence of any capital
expansion in the near term
Liquidity Indicator - Stretched: The SSCPL's average maximum use of
the working capital limits was 64% during the 12 months ended March
2023. It is likely to have remained at a similar level since then.
SSCPL's cash flow from operations decreased to INR55.27 million in
FY23(FY22: INR63.77 million; FY21: negative INR56.48 million), due
to unfavorable changes in its working capital. The company's cash
balance increased to INR21.25 million at FYE23 (FYE22: INR1.28
million; FYE21: INR1.16 million), against total outstanding debt of
INR232.64 million (INR273 million; INR315 million). The company's
free cashflow stood at INR60 million in FY23 (FY22: INR54 million).
SSCPL has debt repayments of around INR50 million and INR65 million
in FY24 and FY25, respectively.
SSCPL has modest credit metrics with its gross interest coverage
(operating EBITDA/gross interest expenses) improving to 2.58x in
FY23 (FY22: 2.48x; FY21: 2.37x), on account of a reduction in its
interest costs. The net leverage (total adjusted net debt/operating
EBITDAR) reduced to 3.42x in FY23 (FY22: 3.63x; FY21: 4.13x), due
to a reduction in its debt level. Ind-Ra expects the credit metrics
to slightly improve in FY24 due to a likely reduction in the debt
level owing to the scheduled repayments of its term loan.
The company faces intense competition as it operates in the highly
fragmented textile industry, which largely has several unorganized
small-sized players. Furthermore, the entry barriers are low on
account of low capital requirement and technology intensity, and
low differentiation in the end product.
However, the ratings are supported by the promoters' over three
decades of experience in the textile industry, leading to
established relationship with its customers and suppliers.
Moreover, the company has a pan-India presence, mitigating the
geographical concentration risk to an extent. The company continues
to benefit from its healthy operational synergies due to its
vertically integrated operation with presence in yarn
manufacturing, weaving and processing. The backward integrations
support the profitability and restrain working capital requirements
of the group.
Company Profile
SSCPL was established in 2016. The company procures cotton yarn and
polyester yarn from outside and converts them into grey cloth to
sell to its group company.
SONEX INDUSTRIES: ICRA Keeps B+ Debt Ratings in Not Cooperating
---------------------------------------------------------------
ICRA has retained the Long-Term and Short Term rating of Sonex
Industries in the 'Issuer Not Cooperating' category. The ratings
are denoted as [ICRA]B+(Stable)/[ICRA]A4; ISSUER NOT COOPERATING".
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term- 5.00 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Cash Credit to remain under 'Issuer Not
Cooperating' category
Long Term- 1.50 [ICRA]B+ (Stable) ISSUER NOT
Fund Based- COOPERATING; Rating continues
Term Loan to remain under 'Issuer Not
Cooperating' category
Short Term- 2.10 [ICRA]A4 ISSUER NOT
Non Fund Based COOPERATING; Rating continues
Others to remain under 'Issuer Not
Cooperating' category
ICRA has been trying to seek information from the entity so as to
monitor its performance. Further, ICRA has been sending repeated
reminders to the entity for payment of surveillance fee that became
due. Despite repeated requests by ICRA, the entity's management has
remained non-cooperative. The current rating action has been taken
by ICRA basis best available/dated/limited information on the
issuers' performance. Accordingly, the lenders, investors and other
market participants are advised to exercise appropriate caution
while using this rating as the rating may not adequately reflect
the credit risk profile of the entity. The rating action has been
taken in accordance with ICRA's policy in respect of
non-cooperation by a rated entity available at www.icra.in.
Established under Sonex group by Jetpariya family in 2002, Sonex
Industries (SI) has been engaged in manufacturing of digital
ceramic wall tiles of three different sizes. The manufacturing
facility, located in Morbi (Gujarat) is equipped with 3 pressing
machines, 1 printing machine and 2 kilns, having an installed
capacity to produce 10,000 boxes per day (of size 12" ×12"). Sonex
group of company is an ISO 9001:2008 certified company. SI is
currently managed by third generation of Jetpariya family having an
experience of about three decades in the ceramic industry.
SPICEJET LTD: Two Aircraft-Leasing Cos. Get $15MM Summary Judgment
------------------------------------------------------------------
Danish Khan at MoneyControl reports that two aircraft-leasing
companies have obtained summary judgment totalling over $15 million
against SpiceJet in the high court in London in May 2023.
MoneyControl can also confirm that there are, at least, three more
cases lodged in the commercial courts of London against SpiceJet
which are currently in different stages. This also includes a claim
filed by a Turkish company.
According to MoneyControl, the development comes in the wake of
Wilmington Trust SP Services (Dublin) filing insolvency plea in the
National Company Law Tribunal (NCLT) against SpiceJet. Wilmington
Trust, just like the two companies, GASL Ireland Leasing A-1
Limited and VS MSN 36118 CAV Designated Company, had also got a
summary judgment in the high court in London in July 2021.
It is likely that these two companies -- who had filed separate
cases -- could also approach NCLT seeking SpiceJet's insolvency,
the report says. In fact, the proceedings in the commercial court
in London reveal that VS MSN could have got default judgment but
instead sought a summary judgment to facilitate taking legal steps
in India against the airline. A default judgment is given when a
defendant fails to perform certain required tasks or fulfil
mandatory conditions, whereas, a summary judgment can be obtained
on the merit of the case, but without a full trial. The former is
comparatively easier to obtain and set aside, but the latter can
only be set aside on appeal.
MoneyControl has exclusive details of how SpiceJet initially
refused to acknowledge service, had to face the ignominy of its
legal team coming off record due to non-payment of fees, sought
adjournments on the basis of having no legal representation, and
made deliberate attempts to delay court's timetable. All this and
much more could not grant them any reprieve from the high court in
London.
This case pertains to the lease of a Boeing 737-800 aircraft by
SpiceJet in May 2017, MoneyControl notes. In February 2022, GASL
obtained summary judgment for outstanding rent in the sum of
$5,334,121.25 (which remains unpaid), but continued to pursue
SpiceJet claiming non-compliance with aircraft Redelivery
Conditions.
After non-payment of rent by SpiceJet, GASL requested that the
aircraft be redelivered in the Republic of Ireland. Instead,
SpiceJet made it available to GASL at Bengaluru from where it was
flown by GASL to Lithuania for maintenance and inspections. Since
there was a dispute between both the sides on whether the aircraft
met the Redelivery Conditions they sent their experts to prepare a
report.
In Lithuania, the aircraft was inspected for GASL by Peter Bull, an
experienced aircraft maintenance engineer and by a representative
of SpiceJet, ET relates. Mr. Bull took over 1,800 pictures and
produced a voluminous report on the condition of the aircraft,
which was produced in court. The condition of the cabin and flight
deck was described by Bull as "one of the worst I have seen in
relation to an 'in service' aircraft which had been presented for
redelivery." Mr. Bull also gave evidence that the aircraft was not
repainted as required by the Redelivery Condition.
SpiceJet, on the other hand, did not submit any report from its
expert who inspected the aircraft at Lithuania. This was pointed
out by GASL's barrister Philip Shepherd, KC, who argued that the
reason SpiceJet did not submit their expert's report was because it
would not have supported the airline's case that the aircraft met
Redelivery Conditions. The court accepted Mr. Bull's evidence in
full and entered judgment against SpiceJet in the amount of
$8,490,312.39, ET discloses.
As the case progressed, the law firm representing SpiceJet came off
record for non-payment of fees. At one stage, this was advanced by
the airline to seek adjournment on the grounds that they did not
have legal representation. "SpiceJet sought to adjourn this trial
on the basis that it needs time to find and brief new solicitors.
However, there was no evidence from SpiceJet as to what steps (if
any) had been taken to find legal representatives . . ." noted
Justice Foxton in his judgment dated 10 May 2023. "It has been a
hallmark of the case to date that SpiceJet has sought to delay the
timetable whenever possible."
Not surprisingly in the last stages of this case they remained
unrepresented, but that did not stop the court from giving out its
judgment, MoneyControl says.
In April 2018, SpiceJet entered into an agreement with VS MSN to
lease a Boeing 737-700 for 96 months, MoneyControl relays. In the
backdrop of Covid-19, there were payment defaults and in November
2020, the parties entered into a rent deferral agreement. A total
of $1,657,376 was waived under the agreement and further
arrangements were agreed which laid down payments in monthly
instalments during 2021.
But continued non-payment by SpiceJet left over $4 million
outstanding by September 2022. Accordingly, VSN approached the high
court in London seeking payment of the outstanding dues. At the
beginning, SpiceJet failed to even acknowledge service.
"The defendant buried their head in the sand, ignored our notices
and claims which we made in September 2022," said Cleon Catsambis,
representing VS MSN during a hearing on May 5, 2023. There were
some extended arguments on how to work out the accrued rentals,
interest payments and other technical details. Thomas Munby, KC,
representing SpiceJet characterised VS MSN's application for a
summary judgment as "having their cake and eating it too". "The
claimant can't get summary judgment just by pleading," Mr. Munby
told the court.
According to MoneyControl, the main contention between both the
parties was the one related to future rentals. VS MSN claimed that
in the event of a default, they are automatically entitled to
payment of all sums "up to the date of redelivery under the Lease,
May 3, 2026." This meant that once the aircraft is redelivered and
there are no dues outstanding, the airline would be repaid any
money paid in excess.
MoneyControl says SpiceJet disputed that VS MSN had any such
entitlement pertaining to future rentals. The airline challenged
the construction of the clause put forward by the claimant, and
argued that the wording made it uncertain. Deputy Judge Charles
Hollander accepted that the wording of the future rental clause was
unsatisfactory, but concluded: "The fact that it is a draconian
provision is hardly unusual in a list of remedies in an aircraft
lease drafted for the protection of the lessor. Where there has
been an Event of Default it is not particularly unlikely that the
lessor would wish to secure future payments by advance payment, the
monies being repayable after redelivery and full payment."
Accordingly, VS MSN was awarded a summary judgment to the tune of
$5,890,000, MoneyControl discloses.
About Spicejet
SpiceJet Limited -- http://www.spicejet.com/-- is an India-based
low-budget air carrier. The Company operates daily flights between
major cities in India. The carrier is India's second-biggest budget
airline, after IndiGo.
As recently reported in the Troubled Company Reporter-Asia Pacific,
aircraft lessor Wilmington Trust SP Services (Dublin) Ltd has filed
a petition for initiating the corporate insolvency
resolution process against SpiceJet.
This is the third case filed against the airline, according to The
Economic Times. Two other cases under Section 9 of the Insolvency
and Bankruptcy Code, 2016, have been filed by aircraft lessor
Aircastle (Ireland) Ltd and engine lessor Willis Lease Finance
Corporation.
Aircastle (Ireland) filed a CIRP petition against Spicejet on April
28, 2023, while Willis Lease Finance Corporation filed its petition
on April 12, 2023.
TALWALKARS HEALTHCLUBS: CARE Keeps D Ratings in Not Cooperating
---------------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Talwalkars
Healthclubs Limited (THL) continue to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 280.74 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Non-Convertible 25.00 CARE D; ISSUER NOT COOPERATING
Debentures Rating continues to remain
under ISSUER NOT COOPERATING
category
Non-Convertible 63.34 CARE D; ISSUER NOT COOPERATING
Debentures Rating continues to remain
under ISSUER NOT COOPERATING
category
Non-Convertible 25.00 CARE D; ISSUER NOT COOPERATING
Debentures Rating continues to remain
under ISSUER NOT COOPERATING
category
Non-Convertible 25.00 CARE D; ISSUER NOT COOPERATING
Debentures Rating continues to remain
under ISSUER NOT COOPERATING
category
Non-Convertible 25.00 CARE D; ISSUER NOT COOPERATING
Debentures Rating continues to remain
under ISSUER NOT COOPERATING
category
Non-Convertible 25.00 CARE D; ISSUER NOT COOPERATING
Debentures Rating continues to remain
under ISSUER NOT COOPERATING
category
Detailed Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated June 8, 2022,
reaffirmed the rating(s) of THL under the 'issuer non-cooperating'
category as THL had failed to provide information for monitoring of
the rating as agreed to in its Rating Agreement. THL continues to
be non-cooperative despite repeated requests for submission of
information through e-mails dated May 14, 2023, May 4, 2023, April
24, 2023 and various email.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
CARE has considered combined financials of Talwalkars Better value
Fitness Limited (TBVFL) and Talwalkars Healthclubs Limited (THL,
Erstwhile Talwalkars Lifestyle Limited) for analysis referred as
TBVFL (combined) due to business and financial linkages along with
common management. The rating takes into account ongoing delays in
debt servicing by the company.
Detailed description of the key rating drivers
As per PR dated June 30, 2021, the following were the rating
strengths and weaknesses:
Key Rating Weaknesses
* Deteriorating debt coverage indicators; asset monetisation
remains key rating monitorable: As on March 31, 2019 (UA), the
total outstanding debt stood at INR~759 crore an increase of
45.30%. The debt was primarily on account of to fund its various
expansion plans, predominantly for the David Lloyd Club in Pune.
Consequently, the debt coverage metrics also deteriorated. As of
March 31, 2019 (UA), the interest coverage ratio stood at 4.99x as
against 7.10x as of March 31, 2018. Similarly, overall gearing as
well as total debt to gross cash accruals deteriorated to 1.05x and
5.33x as against 0.89x and 3.91x respectively. Furthermore, TBVFL
(combined) has invested in other complementing ventures in the
lifestyle segment such as 'Sarva'. As these investments are taking
longer than expected to generate material returns, adjusting for
the same (including goodwill), the overall gearing ratio as on
March 31, 2019 stands at 1.57x as against 1.11x as on March 31,
2018. The management is looking to raise funds by the end of
calendar year 2019 through various avenues such as sale of
equity, sale of stake in joint ventures/associate companies and to
monetise some of its gym properties by entering in a sale and
lease back transaction to partially retire its debt. The ability of
the company to timely raise funds and subsequent debt
reduction is a key rating monitorable.
* Reduced financial flexibility: The financial flexibility of TBVFL
(combined) has reduced on account of significant reduction in
market capitalisation along with increase in promoters' pledged
shares. The promoters' stake pledged has increased to 76.11%
(TBVFL) and 77.30% (THL) as on June 30, 2019. The ability of the
promoters' to reduce quantum of pledged shares continues to remain
a key rating monitorable.
* Relatively moderate scale of operations: TBVFL's scale of
operations are moderate and seasonal in nature as second quarter
and fourth quarter of the fiscal year together contribute almost
61% of its overall consolidated revenues in FY19. Hence, any
adverse impact on the business in the peak season may adversely
impact the profitability. On-going significant capex towards
existing line of business as well as towards newer business
segments which have not generated returns in line with expectation
During FY19, on a combined basis, the company had incurred capex of
INR173.03 crore of which, INR111. 18 crore was for gym business and
INR61.84 crore was for the lifestyle business. The company's
ability to improve its asset turnover and increasing turnover of
higher value added segment is crucial to improve its credit
profile. Further, the company is setting up a club in Pune in
collaboration with David Lloyd Leisure Limited which got delayed
and is expected to start operation shortly. The performance in
terms of member addition remains a rating sensitivity.
Key Rating Strengths
* Long track record and extensive experience of the promoters in
the fitness industry: TBVFL and THL, promoted jointly by the
Talwalkar and Gawande families in 2003 has well-established track
record of operating gyms/fitness centres of over a decade and half
in the fitness industry with presence across the country. The brand
"Talwalkars” is in existence since 1932. The promoters, Mr
Madhukar Talwalkar and Mr Prashant Talwalkar, have more than four
decades of experience in various segments/aspects of fitness
industry.
* Diversified product portfolio; albeit higher dependence on
revenues from gym services: TBVFL (combined) have a diversified
product portfolio offering multiple products spanning from basic
gym services to aerobics, yoga, diet-based weight reduction
programs, massage, spa, and health counselling. While the
contribution from its value added services is increasing the
company continues to derive major share of revenues from basic gym
services across its outlets.
Liquidity: Poor There are ongoing delays in company's debt service
obligations.
Analytical approach: Combined Financials of THL and TBVFL have been
considered for analysis; given the strong operational synergies
along with common management.
Incorporated in 2003, Talwalkars Better Value Fitness Limited
(TBVFL) was jointly promoted by Mr. Madhukar Talwalkar, Mr.
Prashant Talwalkar and Mr. Anant Gawande. The company is one of the
leading fitness chains in India offering a wide range of services
like weight loss, weight gain, and other fitness programs like body
sculpting, shaping, general fitness, massage, spa and health
counselling under the brand "Talwalkars". The company offers
various value added fitness programs in its bouquet of fitness
programs like Zumba (dance inspired fitness program), NuForm
(Electric Muscle Simulation based Technology fitness program),
Reduce (weight loss diet program), Transform (holistic fitness
program). TBVFL (combined) operates gyms/fitness centre on three
models viz directly managed gyms, franchisee route and subsidiary
model (wherein TBVFL enters into an agreement with a master
franchise, and TBVFL owns around 51% equity and the brand). Over
the last seven years, TBVFL has grown rapidly from operating 63
gyms/fitness centres as on March 31, 2010, to 272 gyms/fitness
centres as on March 31, 2019. TBVFL has split its operations into
lifestyle business and gym business and form two separate entities
in the following manner:
a) Lifestyle business: This business is housed under TBVFL. The
business including various joint ventures/associate companies
comprises of Nuform, Zumba Fitness, Mickey Mehta, Sarva (Yoga),
Group X, Reduce, and sports club. As on March 31, 2019, there are
116 centers of Reduce, 80 centers of Nuform, 85 centers of Sarva
Yoga and 19 centers of Mickey Mehta.
b) Gym Business: This business is housed under Talwalkar
Healthclubs Limited (THL); erstwhile Talwalkars Lifestyle Limited
(TLL).
TICEL BIO: CARE Keeps D Debt Rating in Not Cooperating Category
---------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of TICEL Bio
Park Limited (TICEL) continues to remain in the 'Issuer Not
Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 61.32 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated May 4, 2022,
placed the rating(s) of TICEL under the 'issuer non-cooperating'
category as TICEL had failed to provide information for monitoring
of the rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. TICEL continues to
be non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
March 20, 2023, March 30, 2023, April 9, 2023.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Analytical approach: Standalone
Outlook: Not Applicable
TICEL was set up in 2004 by Govt. of Tamil Nadu with financial
support from Govt. of India. Tamil Nadu Industrial Development
Corporation Limited (TIDCO, A Govt. of Tamil Nadu enterprise),
TIDEL Park Limited (TIDEL, jointly promoted by TIDCO and
Electronics Corporation of Tamil Nadu Limited, another Govt. of
Tamil Nadu enterprise), Indian Bank, Karur Vysya Bank and Indian
Overseas Bank are the shareholders of the company as on March 31,
2020. TICEL is engaged in development and maintenance of commercial
real estate spaces with specific infrastructure and facilities
required for bio-tech companies.
UNIVERSAL EXTRUSIONS: CARE Keeps D Debt Rating in Not Cooperating
-----------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Universal
Extrusions (UE) continues to remain in the 'Issuer Not Cooperating'
category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 4.23 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated June 6, 2022,
placed the rating(s) of UE under the 'issuer non-cooperating'
category as UE had failed to provide information for monitoring of
the rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. UE continues to be
non-cooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
April 22, 2023, May 2, 2023, June 1, 2023.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
UE was established in 2012 and is engaged in manufacturing of
aluminium extrusions, which are used in different industries as
construction, solar, greenhouse and engineering.
USHA SHRIRAM: ICRA Lowers Rating on INR21cr LT Loan to D
--------------------------------------------------------
ICRA has revised the ratings on certain bank facilities of USHA
Shriram Enterprises Private Limited (USEPL), as:
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long-term– 21.00 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating downgraded from
Cash Credit [ICRA]B+ (Stable) and removed
from non-cooperating category
Short-term– 10.00 [ICRA]D; ISSUER NOT
COOPERATING;
Fund based Rating downgraded from
Cash Credit [ICRA]A4 and continues to remain
under 'Issuer Not Cooperating'
category
Short-term– 9.20 [ICRA]D; ISSUER NOT
COOPERATING;
Non Fund based Rating downgraded from
Limits [ICRA]A4 and removed from
Non cooperating category
Long Term/ 0.80 [ICRA]D/[ICRA]D; ISSUER NOT
Short Term- COOPERATING; Rating downgraded
Unallocated from [ICRA]B+ (Stable)/[ICRA]A4
and removed from non-cooperating
category
Rationale
The rating of USEPL factors in its poor liquidity position led by
high working capital intensity on account of the long receivable
and stockholding period. Consequently there have been delays in
servicing its debt obligations, which came to ICRA's knowledge
through lender's feedback. The company's financial profile is weak
owing to operating losses, high leverage and weak debt coverage
metrics. The company faced delays in realizing receivables and also
faced a pile up in inventory pursuant to the pandemic which
resulted in a weak financial and liquidity profile. ICRA notes that
the promoters have been infusing unsecured loans to support the
operations albeit with a time lag.
The rating also factors in the intensely competitive nature of the
consumer durables industry where USEPL operates, thus limiting any
meaningful pricing power, given almost the entire production is
outsourced to non-exclusive suppliers.
ICRA notes the extensive experience of USEPL's promoters in the
consumer durables industry. Moreover, the established distribution
network of USEPL is expected to support its business profile in the
medium-term.
Key rating drivers and their description
Credit strengths
* Experienced management with an established track record in the
consumer durables industry: The management of USEPL is well
qualified and the promoters have experience of over two decades in
the consumer durables industry. The extensive distribution network
established by the promoters supports USEPL's business profile.
Credit challenges
* Delays in debt servicing and poor liquidity: There are
irregularities in the term loan repayment as well as working
capital limits by the company since its liquidity profile is poor.
The same is primarily owing to the obsolete inventory that was
procured to supply to Canteen Stores Department (CSD) as well as
delays in receivable realization, which have been continuing since
the pandemic. ICRA notes that the promoters have been infusing
unsecured loans to support the operations, albeit with a time lag.
In FY2023, they infused INR14.26 crore.
* Weak financial profile: The company's financial profile is weak
owing to operating losses, high leverage and weak debt coverage
metrics. The company reported cash losses in FY2022 and 9M FY2023
(provisional). USEPL has high indebtedness with gearing of 7.05
times as of December 31, 2022. The DSCR and interest coverage
metrics are weak owing to cash losses reported.
* Highly fragmented and intensely competitive industry: USEPL
operates in the highly fragmented consumer durables industry
characterised by intense competition due to the commoditised nature
of the product, which limits its pricing flexibility. Also,
numerous small and medium sized players inhibit any pricing power
for USEPL.
Liquidity position: Poor
The liquidity position is poor characterised by stretched working
capital cycle leading to delays in debt servicing in its working
capital facilities and term loans. The company does not have any
sizeable unutilised buffer in its working capital limits and
maintains minimal cash balances. There are no confirmed capex
plans.
Rating Sensitivities
Positive factors – ICRA could upgrade USEPL's rating if the
company demonstrates a sustainable track record of timely debt
servicing with improvement in its liquidity profile.
Negative factors – Not applicable.
USEPL is a multi-product company established in the year 1983. The
product range falls under the Consumer Durables category. USEPL has
a range of products from Home & Institutional Lighting, Furniture &
Mattresses, Pressure Cookers & Cookware, Televisions & Accessories,
Water & Air Purifiers, Mobiles and CCTV Camera among others. The
products are marketed under the brand USHA/ USHA Shriram. The Fans
& Appliances are marketed exclusively under the premium brand
"EUROLEX.
VARANASI STP: Ind-Ra Moves 'D' Loan Rating to Non-Cooperating
-------------------------------------------------------------
India Ratings and Research (Ind-Ra) has migrated Varanasi STP
Project Private Limited's (VSPPL) bank facilities' ratings to the
non-cooperating category. The issuer did not participate in the
surveillance exercise despite continuous requests and follow-ups by
the agency. Thus, the rating is based on the best available
information. Therefore, investors and other users are advised to
take appropriate caution while using the rating. The rating will
now appear as 'IND D (ISSUER NOT COOPERATING)' on the agency's
website.
The detailed rating actions are:
-- INR570 mil. Term loan (long-term) due on June 2029 migrated to
non-cooperating category with IND D (ISSUER NOT COOPERATING)
rating; and
-- INR130 mil. Bank guarantee (long-term) migrated to non
cooperating category with IND D (ISSUER NOT COOPERATING)
rating.
Note: ISSUER NOT COOPERATING: Issuer did not corporate; based on
the best available information. The rating was last reviewed on
March 10, 2022. Ind-Ra is unable to provide an update as the agency
does not have adequate information to review the ratings
Company Profile
VSPPL is 74% owned by Essel Infra Projects Limited. Uttar Pradesh
Jal Nigam and National Clean Ganga Mission have awarded VSPPL a
concession to construct a 50 million liters per day sewage
treatment plant in Ramana, Varanasi, and restore allied facilities
under the hybrid annuity model. The operations and maintenance
period as per the concession agreement is 15 years from the
commercial operational date.
VARIDHI COTSPIN: Ind-Ra Affirms BB- Bank Loan Rating
----------------------------------------------------
India Ratings and Research (Ind-Ra) has taken the following rating
actions on Varidhi Cotspin Private Limited's (VCPL) bank
facilities:
-- INR35 mil. Non-fund-based working capital limit affirmed with
IND A4+ rating;
-- INR399 mil. (increased from INR133 mil.) Term loan due on
March 31, 2028 affirmed with IND BB-/Stable rating; and
-- INR125 mil. Fund-based working capital limit assigned with
IND BB-/Stable/IND A4+ rating.
Key Rating Drivers
The ratings reflect VCPL's modest EBITDA margins due to the
commodity nature of business. The margin declined to 10.70% in
FY22 (FY21: 13.64%) due to a rise in raw material costs. The ROCE
was 8.3% in FY22 (FY21: 6.9%). In FY23, Ind-Ra expects the EBITDA
margin to have declined, given that production was reduced
considerably for seven months due to a substantial increase in raw
material (cotton fiber) prices. However, the margins are likely to
improve in FY24, backed by higher absorption of fixed costs due
to recovery in revenue.
Liquidity Indicator - Stretched: VCPL's net working capital cycle
remained elongated but improved to 102 days in FY22 (FY21: 129
days) due to a reduction in debtor days to 25 (72). The average
maximum utilization of the fund-based limits was 52.69% and that of
the non-fund-based limits was 93.14% during the 12 months ended May
2023. The cash flow from operations turned positive at INR97.21
million in FY22 (FY21: negative INR7.37 million) due to favorable
changes in working capital. The cash flow from operations is likely
to have remained positive in FY23. The free cash flow turned
positive atINR95.64 million in FY22 (FY21: negative INR9.13
million). The cash and cash equivalents stood at INR0.97 million at
FYE22 (FYE21: INR0.75 million). The company does not have any
capital market exposure and relies on banks and financial
institutions to meet its funding requirements. VCPL has scheduled
debt obligations of INR87.4 million in FY24 and INR100.9 million
in FY25.
The ratings reflect VCPL's moderate net leverage (total adjusted
net debt/operating EBITDAR), which improved to 5.27x in FY22
(FY21: 6.70x) as the utilization of the cash credit facility
reduced to INR69.7 million during the year (INR115.83 million).
The interest coverage (operating EBITDA/gross interest expenses)
was comfortable in FY22 and improved to 2.52x (FY21: 2.32x) due to
an increase in the absolute EBITDA to INR119.85 million (INR105.36
million). Ind-Ra expects the credit metrics to have weakened
significantly in FY23 due to a likely decline in the absolute
EBITDA, led by a sharp fall in revenue; in FY24, however, Ind-Ra
expects the credit metrics to improve due to an increase in the
absolute EBITDA, led by revenue growth.
The ratings factor in VCPL's medium scale of operations, as
indicated by revenue of INR1,121.18 million in FY22 (FY21:
INR772.16 million). In FY22, the revenue improved due to recovery
in demand for cotton yarn post the diminishing of pandemic-led
disruptions. In FY23, prices of cotton fiber, the main raw material
for the company, increased sharply, which had a major impact on the
company's profitability. Hence, the company significantly reduced
production for seven months during the year. Consequently, VCPL's
revenue fell sharply to INR598.30 million in FY23. The company
recorded revenue of INR 183 million during April-May 2023. In FY24,
Ind-Ra expects the revenue to improve due to normalization of
cotton fiber prices and recovery in production levels from January
2023. Furthermore, VCPL had an order book of INR150 million as of
April 2023, to be executed by June 2023.
The ratings are supported by the promoters' experience of more than
three decades in the textile industry.
Rating Sensitivities
Negative: A decline in the scale of operations, leading to
deterioration in the overall credit metrics, with the net financial
leverage exceeding 6.0x, on a sustained basis, and further pressure
on the liquidity position, could lead to a negative rating action
Positive: Growth in the scale of operations, along with an
improvement in the overall credit metrics and improvement in the
liquidity profile, could lead to a positive rating action
Company Profile
VCPL was incorporated in 2014 and started operations in 2017. The
company manufactures cotton yarn. Its manufacturing facility is
located at Koth village in Ahmedabad, Gujarat.
VATIKA INFRACON: CARE Keeps D Debt Rating in Not Cooperating
------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Vatika
Infracon Private Limited (VIPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Non Convertible 128.90 CARE D; ISSUER NOT COOPERATING
Debentures Rating continues to remain
under ISSUER NOT COOPERATING
category
Rationale and key rating drivers
The rating has been reaffirmed on account of ongoing delays in
servicing of its debt obligations due to stressed liquidity
position.
There have been instances of delays in interest servicing for NCDs
as reported in the audit report of FY22.
Rating sensitivities: Factors likely to lead to rating actions
Positive factors
* Timely repayment of its debt on timely basis.
Analytical approach: Standalone
Detailed description of the key rating drivers:
Key weaknesses
* Decline in the income and increasing losses leading to delays:
The total income from operations of the company has reduced from Rs
269.56 crores in FY21 (A) to Rs 42.34 crores in FY22 (A). Also, the
company has reported net losses of Rs 99.83 crores in FY22(A). On
account of the weak performance, the company has delayed the
repayment of interest to debenture holders, as per the audit report
for FY22.
Liquidity: Poor
Owing to weak performance and losses, the company has poor
liquidity profile.
Vatika Infracon Private Limited (VIPL) was incorporated in 2010 for
the purpose of real estate development. The company is a step-down
subsidiary of Vatika Ltd (Vatika rated- CARE BB; Stable), Vatika
Group's flagship company. VIPL is developing 77 acres gated
township 'Vatika City 2' as the final phase of Vatika India Next
(An integrated township with area spanning over 77 acres having
residential- floors, plots, villas, group housing, gated towns and
commercial projects) in Sector 89, Gurgaon with saleable area of
68.02 lakh square feet (lsf). The project will be developed in 4
phases and the land for the project has already been acquired with
licenses for phase 1 already received.
VIJAYANT AGENCIES: CARE Keeps C Debt Rating in Not Cooperating
--------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Vijayant
Agencies Private Limited (VAPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 10.00 CARE C; Stable; ISSUER NOT
Facilities COOPERATING; Rating continues
to remain under ISSUER NOT
COOPERATING category
Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated June 2, 2022,
placed the rating(s) of VAPL under the 'issuer non-cooperating'
category as VAPL had failed to provide information for monitoring
of the rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. VAPL continues to be
noncooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
April 18, 2023, April 28, 2023, May 8, 2023.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
The ratings have been revised on account of non-availability of
requisite information. Further, the revision considers the net loss
reported in FY22 over FY21.
Jalgaon based, Vijayant Agencies Private Limited (VAPL) was
incorporated in the year 2004 and is promoted by Mr Manoj Kabra and
Mr Jayant Kabra. The company is engaged into agro trading and
trading of Samsung mobiles and accessories.
VIRTUE MARKETING: CARE Keeps D Debt Rating in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the ratings for the bank facilities of Virtue
Marketing Private Limited (VMPL) continue to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 15.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Short Term Bank 20.00 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated May 26, 2022,
placed the rating(s) of VMPL under the 'issuer non-cooperating'
category as VMPL had failed to provide information for monitoring
of the rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. VMPL continues to be
noncooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
April 11, 2023, April 21, 2023, May 1, 2023.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Incorporated in 2013, Virtue Marketing Private Limited (VMPL) is
promoted by Mr. Ramesh Jain and Mr. Hitesh Jain. VMPL is currently
engaged in the trading of Aluminium Plates, Aluminium Coils,
Aluminium Foils, Aluminium Wires, Aluminium Ingots, Aluminium
Conductors, Aluminium Extrusions, steel products and scraps. The
product range finds application in transport, machinery, defense,
healthcare, automobile, engineering etc. The other company of the
promoters, R.E Cables & Conductors Private Limited is into
designing, manufacturing and marketing all types of aluminum
products and scraps. These cables and conductors find its use in
power generating and distributing companies. The company markets
the cables and conductors under 'RECC' brand.
VIVID SOLAIRE: Ind-Ra Hikes Bank Loan Rating to 'BB+'
-----------------------------------------------------
India Ratings and Research (Ind-Ra) has upgraded Vivid Solaire
Energy Private Limited's (VSEPL) bank facilities as follows:
-- INR13.880 bil. Senior project bank loan upgraded with
IND BB+/Stable rating.
Analytical Approach: For arriving at the ratings, Ind-Ra has
assessed VSEPL on a standalone basis while factoring in its
significant business, financial, and managerial linkages with its
immediate holding entity, Betam Wind Energy Private Limited (BWEPL,
'IND BBB-'/Stable). Ind-Ra continues to consider only the senior
debt for arriving at the rating. Therefore, any sponsor-injected
funds, other than plain vanilla equity, that have been infused in
the project, or might be injected, are/will be considered as
equity-like instruments. The inclusion of these instruments into
the senior debt would affect the ratings.
The upgrade reflects the change in the ownership of BWEPL's holding
entity, Pawan India B.V, with Engie Global Developments B.V (Engie
GDBV; sponsor) now being the 100% shareholder. The sponsor is a
step-down wholly owned subsidiary of Engie SA (Fitch Ratings Ltd;
Issuer Default Rating: 'A-'/Stable), held through intermediary
companies.
As per Ind-Ra assessment, the Indian operations are strategic for
Engie SA's future growth plans, and it has demonstrated its
commitment through infusing funds worth INR5,350 million into BWEPL
and VSEPL together in FY23 towards meeting the capex and
operational requirements of the entities. Furthermore, as per the
representation from the management, the debt of BWEPL and VSEPLK
have been consolidated at Engie's level, providing comfort to the
ratings.
The ratings are constrained by the project's continued
underperformance in power generation and low debt service coverage
ratio (DSCR), the risks associated with the pending
completion/monetization of VSEPL's balance capacity of 32MW, and
stretched internal liquidity.
Key Rating Drivers
Strong Sponsor: The ratings benefit from VSEPL's parentage and the
support undertakings provided by the sponsor, Pawan India B.V.
BWEPL, which is VSEPL's promoter and the holding company for the
Engie group's wind power business in India, is 99.99% held by Pawan
India, which was 50% owned by Engie Global Developments B.V (Engie
GDBV) and 50% owned by STOA S.A. In December 2022, Engie GDBV
acquired 50% stake of STOA S.A.'s share in Pawan India B.V.
During FY23, the sponsor extended support of about INR5,350 million
to BWEPL for full closure of the investor-backed funding lines in
the later as well as to VSEPL for meeting capex requirements and
for funding any debt service shortfalls in both. Ind-Ra expects the
projects to continue to depend on the sponsor group for meeting
debt servicing obligations until the operational performance
improves. The sponsor group has an experience of commissioning and
operating about 1GW solar capacity across India and a global
experience of developing/operating 30GW renewable capacity. The
ratings are supported by the strong sponsor profile, the support
extended by the sponsor in the past, and the management's
representation that it would provide the required managerial,
operational and financial support to its India operations.
Sponsor Undertakings: The sponsor has provided an irrevocable and
unconditional undertaking to fund cost overruns to the extent of
20% of the capital cost. In addition, BWEPL has undertaken to
infuse additional funds in case of any tariff reduction or capacity
reduction due to delays in achieving the commercial operations
date, creating the debt service reserve, and debt resizing in case
the plant fails to achieve P90 plant load factor in its first two
years of operations. Also, the support from the parent (Engie SA)
and/or its subsidiaries Engie GDBV is likely to continue, given the
strategic nature of renewable assets as represented by the
management.
Liquidity Indicator - Stretched: VSEPL has been meeting its debt
obligations since June 2022. As on 31 March 2023, the project had
an outstanding term loan of INR11,517 million, for which repayments
had commenced from May 2022. The project has to create a debt
service reserve equivalent to three months of debt servicing
requirements, but it is yet to do so. Though the internal liquidity
of VSEPL is assessed to be stretched, it is supported by the strong
parentage and the management practice of close treasury
coordination to infuse funds to support the entities as and when
required.
Under-Performance of Commissioned Capacity: In FY23, the generation
levels were 32% lower than the P90 estimate (FY22: 22% lower than
PLF). Wind projects are generally susceptible to wind speed, which
could affect their cash flows. At FYE23, the average grid
availability was above 98% (FY22: 98%) and machine availability was
about 84% (95%). The machine availability declined due to
right-of-way issues at the project location. The management has
represented that measures have been undertaken to resolve these
issues.
Minimal Risk on Completion/Monetization of Balance 32MW: The
ratings reflect the minimal risk associated with the
completion/monetization of the balance capacity of 32MW. The
project was delayed due to various reasons, including land
clearances, other approvals and COVID-19 induced delays. The
management expects to complete/monetize the balance capacity in the
next three-to-six months as the project is in its advanced stages
of construction.
Moderate Technology Risk: VSEPL employs wind turbine generators
with a hub height as well as rotor diameter of 120 meters, procured
from Vestas Wind Technology India Private Limited, a
European-headquartered wind turbine supplier. Also, VSEPL has a
fixed-price, 20-year operations and maintenance contract with
Vestas Wind Technology India.
PPA with Strong Counterparty: The rating is anchored by the
presence of a fixed-tariff power sale contract with a reasonably
strong counterparty, Solar Energy Corporation of India Limited
(SECI). Out of the total wind capacity of 250.2MW under VSEPL,
50.2MW under SECI III, which has been operational since November
2019, and 168MW (operational capacity) under SECI-IV, which was
commissioned in phases, have been generating cash accruals, and
SECI has been making payments within 20 days of raising invoices.
Since the balance capacity of 32MW in VSEPL could not achieve
commissioning within the revised scheduled commissioning date, the
PPA capacity has been reduced to the commissioned capacity and
liquidated damages to that extent have been paid to SECI. Also, the
debt disbursement for SECI III and SECI IV was limited to the
proportion of capacity commissioned.
Rating Sensitivities
Positive: A sustained improvement in the operational performance
and internal liquidity along with timely completion/ monetization
of the balance capacity could result in a rating upgrade.
Negative: Continued underperformance of the project combined with
lack of sponsor support could result in a rating downgrade.
Company Profile
VSEPL is promoted and wholly owned by BWEPL. BWEPL is 99.99% held
by Pawan India B.V. (sponsor), Pawan India BV has been incorporated
in Netherlands, as an exclusive offshore platform for Engie's wind
developmental activities in India. Engie Global Development B.V is
a step-down wholly owned subsidiary of Engie SA held through
intermediary companies. The former is the latter's investment
vehicle in Netherlands, holding its international power assets in
various geographies including Asia, South Africa, Turkey and United
Kingdom.
VSEPL was incorporated to develop a 252MWac wind power project in
Chillangulam village, Tuticorin district, Tamil Nadu. The special
purpose vehicle has signed a fixed-price power purchase agreement
for a period of 25 years with SECI at a fixed tariff of
INR2.45/unit for 50.2MW (SECI-III) and INR2.51/unit for 168MW
(SECI-IV) capacity.
ZENITH PRECISION: CARE Keeps D Debt Rating in Not Cooperating
-------------------------------------------------------------
CARE Ratings said the rating for the bank facilities of Zenith
Precision Private Limited (ZPPL) continues to remain in the 'Issuer
Not Cooperating' category.
Amount
Facilities (INR crore) Ratings
---------- ----------- -------
Long Term Bank 25.69 CARE D; ISSUER NOT COOPERATING
Facilities Rating continues to remain
under ISSUER NOT COOPERATING
category
Rationale & Key Rating Drivers
CARE Ratings Ltd. had, vide its press release dated May 6, 2022,
placed the rating(s) of ZPPL under the 'issuer non-cooperating'
category as ZPPL had failed to provide information for monitoring
of the rating and had not paid the surveillance fees for the rating
exercise as agreed to in its Rating Agreement. ZPPL continues to be
noncooperative despite repeated requests for submission of
information through e-mails, phone calls and a letter/email dated
March 22, 2023, April 1, 2023, April 11, 2023.
In line with the extant SEBI guidelines, CARE Ratings Ltd. has
reviewed the rating on the basis of the best available information
which however, in CARE Ratings Ltd.'s opinion is not sufficient to
arrive at a fair rating.
Users of this rating (including investors, lenders and the public
at large) are hence requested to exercise caution while using the
above rating(s).
Bangalore based Zenith Precision Private Limited (ZPPL) was
incorporated in 1986 as a Private Limited Company by Mr J.F.Pinto.
The company is engaged in the manufacturing of precision components
and sub-assemblies which find application in variety of industries
such as locomotive, automobile, medical components and aerospace
industries. The company has three manufacturing units located in
the suburbs of Bangalore of which 2 units manufacture aerospace
components. The company has diversified revenue base with majority
of sales (about 90%) being exports (to USA) and deemed exports. It
procures its raw materials domestically from Karnataka. Currently,
Mr. Deepak Pinto, the Managing Director of the company looks after
the day to day operations.
[*] INDIA: IBBI to Form 'Common Panel' of Insolvency Professionals
------------------------------------------------------------------
The Economic Times reports that the bankruptcy regulator will
prepare a "common panel" of insolvency professionals (IPs) from
those registered with it and share the list in advance with the
adjudicating authority to choose from to oversee various cases of
resolution or liquidation from July 1.
At present, the Insolvency and Bankruptcy Board of India (IBBI) is
required to recommend the IP's name only after receiving reference
from the National Company Law Tribunal (NCLT) in a corporate
insolvency resolution process (CIRP), ET relates.
The proposed move, the regulator believes, will "avoid
administrative delays" in the appointment of IPs and help expedite
insolvency resolution.
This list of IPs will also be submitted with the Debt Recovery
Tribunal for handling individual insolvency cases as well,
according to the IBBI.
In its latest guidelines, dated June 12, the regulator said: "The
board will prepare a common panel of IPs for appointment as IRP
(interim resolution professional), liquidator, RP (resolution
professionals) and BT (bankruptcy trustee) and share the same with
the AA (adjudicating authority)," ET relays.
According to ET, the panel will have a validity of six months and
will be followed by an updated one. The first panel will be
effective from July 1 to December 31.
The regulator has asked IPs to submit their expression of interest
for being a part of such a panel by June 25. It will send the panel
to the adjudicating authority by June 30, ET notes.
=====================
N E W Z E A L A N D
=====================
API FAKAKOLOA: Court to Hear Wind-Up Petition on June 23
--------------------------------------------------------
A petition to wind up the operations of Api Fakakoloa Educational
Services Limited will be heard before the High Court at Auckland on
June 23, 2023, at 10:00 a.m.
The Commissioner of Inland Revenue filed the petition against the
company on May 2, 2023.
The Petitioner's solicitor is:
Cloete Van Der Merwe
Inland Revenue, Legal Services
5 Osterley Way
Manukau City
Auckland 2104
ARYAN GURU: Creditors' Proofs of Debt Due on June 30
----------------------------------------------------
Creditors of Aryan Guru Limited and Ali Install Limited are
required to file their proofs of debt by June 30, 2023, to be
included in the company's dividend distribution.
Aryan Guru Limited commenced wind-up proceedings on May 29, 2023.
Ali Install Limited commenced wind-up proceedings on May 30, 2023.
The company's liquidator is:
Mohammed Tazleen Nasib Jan
Liquidation Management Limited
PO Box 50683
Porirua 5240
BL & PS HOLDINGS: Court to Hear Wind-Up Petition on June 20
-----------------------------------------------------------
A petition to wind up the operations of BL & PS Holdings Limited
will be heard before the High Court at Rotorua on June 20, 2023, at
10:00 a.m.
Paul Kenneth Douglas and Sharyn Ariana Marama Nikora filed the
petition against the company on May 24, 2023.
The Petitioner's solicitor is:
Kevin Badcock
c/- Badcock Law Limited
16 Willmott Place
Rotorua
BLACK STAG: Court to Hear Wind-Up Petition on June 23
-----------------------------------------------------
A petition to wind up the operations of Black Stag Projects Limited
will be heard before the High Court at Auckland on June 23, 2023,
at 10:00 a.m.
N2D3 Properties Limited filed the petition against the company on
May 4, 2023.
The Petitioner's solicitor is:
Jeffrey Gray Ussher
Level 19, 191 Queen Street
Auckland
GCB BUILDING: Creditors' Proofs of Debt Due on July 14
------------------------------------------------------
Creditors of GCB Building and Construction Limited are required to
file their proofs of debt by July 14, 2023, to be included in the
company's dividend distribution.
The High Court at Auckland appointed Iain Bruce Shephard and
Jessica Jane Kellow of BDO Wellington as liquidators on June 9,
2023.
===============
P A K I S T A N
===============
PAKISTAN: IMF Dissatisfied With FY24 Budget Presented
-----------------------------------------------------
Reuters reports that the International Monetary Fund (IMF) on June
15 expressed dissatisfaction with Pakistan's recently presented
budget, a blow for the cash-strapped country which has only two
weeks left until its bailout programme expires.
Pakistan has barely enough currency reserves to cover one month's
imports. It had hoped to have $1.1 billion of the funds released in
November - but the IMF has insisted on a number of conditions
before it makes any more disbursements, Reuters says.
With time for only one last IMF board review before the end of the
$6.5 billion Extended Fund Facility (EFF), Pakistan was expected to
present a budget in line with programme objectives, restore the
proper functioning of the FX market, and close the $6 billion gap
ahead of the board review.
"Staff remains engaged to discuss policies to maintain stability.
However, the draft FY24 Budget misses an opportunity to broaden the
tax base in a more progressive way," Esther Perez Ruiz, the IMF's
resident representative for Pakistan, said in a text message to
Reuters.
She added that the long list of new tax expenditures further
reduces the fairness of the tax system and undercuts the resources
needed for vulnerable recipients in the Benazir Income Support
Programme.
"The new tax amnesty runs against program's conditionality and
governance agenda and creates a damaging precedent," added Perez
Ruiz.
She said that measures to address the energy sector's liquidity
pressures could be included alongside the broader budget strategy,
Reuters relays.
Added Perez Ruiz: "The IMF team stands ready to work with the
government in refining this Budget ahead of its passage," implying
the country still has a chance to unlock its ninth IMF board review
prior to the end of the EFF programme, adds Reuters.
About Pakistan
Pakistan is a country located in South Asia. It has a coastline
along the Arabia Sea and the Gulf of Oman and is bordered by
Afghanistan, China, India, and Iran. Pakistan's capital is
Islamabad.
As recently reported in the Troubled Company Reporter-Asia Pacific,
Moody's Investors Service has downgraded the Government of
Pakistan's local and foreign currency issuer and senior unsecured
debt ratings to Caa3 from Caa1. Moody's has also downgraded the
rating for the senior unsecured MTN programme to (P)Caa3 from
(P)Caa1. Concurrently, Moody's has also changed the outlook to
stable from negative. The decision to downgrade the ratings is
driven by Moody's assessment that Pakistan's increasingly fragile
liquidity and external position significantly raises default risks
to a level consistent with a Caa3 rating.
=================
S I N G A P O R E
=================
JAVELIN INVESTMENTS: Creditors' Proofs of Debt Due on July 17
-------------------------------------------------------------
Creditors of Javelin Investments Pte. Ltd. are required to file
their proofs of debt by July 17, 2023, to be included in the
company's dividend distribution.
The company commenced wind-up proceedings on June 8, 2023.
The company's liquidator is:
Ong Kok Yeong David
c/o Tricor Singapore
80 Robinson Road #02-00
Singapore 068898
NO SIGNBOARD: Gets Letter of Demand from Orchard Gateway Landlord
-----------------------------------------------------------------
The Business Times reports that No Signboard Holdings has received
a letter of demand from its landlord at the Orchard Gateway
shopping mall for an outstanding payment of two months' security
deposit, the restaurant operator disclosed in a June 14 bourse
filing.
In the letter of demand, No Signboard was asked to pay the deposit
of SGD98,738.40 by June 16, to maintain a security deposit of
SGD147,735 and to reopen its Orchard Gateway outlet for business by
the same date, BT says.
If it fails to reopen the outlet and keep it open for business, No
Signboard will have to pay damages of SGD200 per day, the letter
said. Failing this, the landlord may exercise its right to re-enter
the premises or commence legal proceedings, BT relates.
According to BT, No Signboard said that it is "seeking legal
advice" on the matter.
BT says the development comes after the operator of hotpot chain
Little Sheep terminated its franchise agreement with No Signboard,
due to the failure to set up the required number of new restaurants
under the agreement.
Shares of No Signboard have been suspended from trading since
January 2022, the report notes.
About No Signboard
No Signboard Holdings Ltd., an investment holding company, manages
and operates food and beverage outlets in Singapore. The company
operates a chain of seafood restaurants under the No Signboard
Seafood brand that serve various seafood cuisine prepared in
Chinese and Singapore styles. It owns and operates three
restaurants, as well as operates one restaurant under a franchise
agreement. The company also produces, promotes, and distributes
beer under the Draft Denmark brand; and distributes various third
party brands of beer, as well as operates as an OEM beer supplier
for third party brands. In addition, it produces and distributes
ready meals through a network of vending machines. Further, the
company engages in leasing financial intangible assets, such as
patents, trademarks, brand names, etc.
No Signboard has reported a net loss of SGD6.4 million for the year
ended Sept. 30, 2021, narrowing from SGD9.8 million in 2020. The
company reported a net loss of SGD4.9 million for the year ended
Sept. 30, 2019.
As reported in the Troubled Company Reporter-Asia Pacific on May
30, 2022, The Business Times said No Signboard Holdings said the
Singapore High Court has granted it and two of its subsidiaries a
moratorium lasting till Oct. 29, 2022.
On April 29, the embattled restaurant operator and wholly owned NSB
Hotpot and NSB Restaurants applied for moratorium relief spanning 6
months, under Section 64 of the Insolvency, Restructuring and
Dissolution Act. They sought court orders that no resolution shall
be passed to wind up the companies and that no legal process shall
be commenced or continued against any property of the applicants,
among other things.
WBL GLOBAL: Court to Hear Wind-Up Petition on June 23
-----------------------------------------------------
A petition to wind up the operations of WBL Global Management Pte
Ltd will be heard before the High Court of Singapore on June 23,
2023, at 10:00 a.m.
Thyme Food & Services Pte Ltd filed the petition against the
company on May 31, 2023.
The Petitioner's solicitors are:
M/s Kalco Law LLC
101A Upper Cross Street
#12-17 People's Park Centre
Singapore 058358
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Asia Pacific is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez,
Julie Anne L. Toledo, Ivy B. Magdadaro and Peter A. Chapman,
Editors.
Copyright 2023. All rights reserved. ISSN: 1520-9482.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly prohibited
without prior written permission of the publishers.
Information contained herein is obtained from sources believed
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firm for the term of the initial subscription or balance
thereof are US$25 each. For subscription information, contact
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*** End of Transmission ***