Brickwork Ratings reaffirms the ratings for the Bank Loan Facilities of Rs. 1221.91 Crs. of Birla Tyres Ltd. ("BTL" or the company) and simultaneously migrates the ratings to Issuer Not Cooperating category based on best available information, as the Issuer did not cooperate.
ParticularsFacilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
---|---|---|---|---|---|
Previous | Present | Previous (09 Sep 2021) |
Present | ||
Fund Based | 1072.85 | 1072.85 | Long Term |
BWR D
Assignment |
BWR D
Reaffirmation/ISSUER NOT COOPERATING* |
Non Fund Based | 149.06 | 149.06 | Short Term |
BWR D
Assignment |
BWR D
Reaffirmation/ISSUER NOT COOPERATING* |
Grand Total | 1221.91 | 1221.91 | (Rupees One Thousand Two Hundred Twenty One Crores and Ninety One lakhs Only) |
Brickwork Ratings has reaffirmed the ratings at BWR D for the long term bank loan facilities of Rs. 1072.85 Crores and short term bank loan facilities of Rs. 149.06 Crs (aggregating Rs. 1221.91 Crores, outstanding as in Dec 2020) of Birla Tyres Limited and has simultaneously migrated both the ratings to the “Issuer Not Cooperating” category based on best available information, as the Issuer did not cooperate.
The rating reaffirmation is based on the company's financial results for Q4 and full year FY22 as obtained from the public domain and the latest auditor's report dated FY22 mentioning that the company has defaulted in repayment of term loans, letter of credit, and working capital facilities. Further on 6th May, 2022, National Company Law Tribunal (NCLT) has pronounced an order for admitting the company into the Corporate Insolvency Resolution Process(CIRP) under the Insolvency and Bankruptcy Code 2016 (IBC). The rating reaffirmation also factors in the feedback by the bankers that the accounts of BTL with them are currently classified under the Non Performing Asset category.
The migration to the Issuer Not Cooperating category is due to non receipt of No Default Statements (NDS) from the company since the last rating in Sep 2021. The client has also not shared with BWR, any information with respect to its business, financials or any other updates. Therefore, in accordance with extant regulatory guidelines, the rating is migrated to the “Issuer Not Cooperating” category, based on best available information as the Issuer did not cooperate.
LIMITATIONS OF THE RATING
Information availability risk is a key factor in the assessment of credit risk as generally, noncooperation by the rated entities to provide required information for a review of the assigned rating may also be accompanied by financial stress. Users of the credit rating should therefore take into account the possible deterioration in the credit quality of the rated entity arising from its non- transparency and withholdings of the information required for a review of the rating.
ABOUT THE ENTITYBirla Tyres Limited (BTL) is a part of the BK Birla group. It was earlier a part of Kesoram Industries Ltd (KIL), the flagship company of BK Birla Group, which was previously engaged in the business of cement and tyre manufacturing since 1919.KIL’s tyre manufacturing facility, which is located in Balasore, Odisha, and whose tyres are sold under the brand name of ‘Birla Tyres’, was spun off into a separate company Birla Tyres Limited. The scheme of the demerger between KIL and Birla Tyres Limited (BTL) and their respective shareholders and creditors was approved by the Hon’ble NCLT on 8th November 2019 and on filing of the scheme with the Registrar of Companies, the scheme became effective on Pursuant to the scheme becoming effective, the Tyre business undertaking demerged from the company and transferred to and vested in the Birla tyres Limited wef 1 January 2019 .
Birla tyres have a wide range of tyres from motorcycles to farm tractors. The company produces truck & bus tyres, passenger car tyres 2 and 3 wheeler tyres, farm and mining tyres etc., and it manufactures bias and radial tyres with over 170 sales depots, 2,329 active dealers at major locations in India and in the international network across 17 countries worldwide. The registered office of the company is situated at Kolkata and the plant is situated at Balasore, Odisha. The company is a listed company in BSE and NSE with 48.68% shares held by the Promoter and Promoter group, and the rest are held by the public. Present installed capacity is 16.1 Million nos of tyres per annum.
Please refer to the following link for the previous detailed rationale that captures the Key Financials Drivers and their Description, Liquidity Position. Rating Sensitivities, Key Financial Indicators. View Previous Document
Facilities | Current Rating (2022) | 2022 (History) | 2021 | 2020 | 2019 | ||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Type | Tenure | Amount (Rs.Crs.) |
Rating | Date | Rating | Date | Rating | Date | Rating | Date | Rating |
Fund Based | LT | 1072.85 |
BWR D
(Reaffirmation/ISSUER NOT COOPERATING*) |
NA |
NA
|
09Sep2021 |
BWR D
(Assignment) |
NA |
NA
|
NA |
NA
|
Non Fund Based | ST | 149.06 |
BWR D
(Reaffirmation/ISSUER NOT COOPERATING*) |
NA |
NA
|
09Sep2021 |
BWR D
(Assignment) |
NA |
NA
|
NA |
NA
|
Grand Total | 1221.91 | (Rupees One Thousand Two Hundred Twenty One Crores and Ninety One lakhs Only) |
BWR complexity levels are meant for educating investors. The BWR complexity levels are available at www.brickworkratings.com / download / ComplexityLevels.pdf. Investors queries can be sent to info@brickworkratings.com.
Analytical Contacts | |
---|---|
Richa Sonthalia Ratings Analyst richa.s@brickworkratings.com |
Anuradha Gupta Director - Ratings anuradha.g@brickworkratings.com |
1-860-425-2742 | media@brickworkratings.com |
SL.No. | Name of the Bank/Lender | Type Of Facilities | Long Term(Rs.Crs.) | Short Term(Rs.Crs.) | Total(Rs.Crs.) |
---|---|---|---|---|---|
1 | Axis Bank Ltd. | Term LoanSanctioned | 435.38 | _ | 435.38 |
2 | Axis Bank Ltd. | Cash CreditSanctioned | 8.98 | _ | 8.98 |
3 | Axis Bank Ltd. | Letter of CreditSanctioned | _ | 1.80 | 1.80 |
4 | DBS Bank India Limited | Cash CreditSanctioned | 35.92 | _ | 35.92 |
5 | DBS Bank India Limited | Term LoanSanctioned | 32.33 | _ | 32.33 |
6 | HDFC Bank | Letter of CreditSanctioned | _ | 5.38 | 5.38 |
7 | HDFC Bank | Cash CreditSanctioned | 46.70 | _ | 46.70 |
8 | ICICI Bank | Letter of CreditSanctioned | _ | 26.93 | 26.93 |
9 | ICICI Bank | Cash CreditSanctioned | 17.96 | _ | 17.96 |
10 | IndusInd Bank | Cash CreditSanctioned | 35.92 | _ | 35.92 |
11 | Karur Vysya Bank | Term LoanSanctioned | 34.20 | _ | 34.20 |
12 | Kotak Mahindra Bank | Cash CreditSanctioned | 14.73 | _ | 14.73 |
13 | Punjab National Bank | Cash CreditSanctioned | 21.55 | _ | 21.55 |
14 | Punjab National Bank | Letter of CreditSanctioned | _ | 10.78 | 10.78 |
15 | South Indian Bank | Cash CreditSanctioned | 17.96 | _ | 17.96 |
16 | South Indian Bank | Term LoanSanctioned | 136.08 | _ | 136.08 |
17 | State Bank Of India (SBI) | Bank GuaranteeSanctioned | _ | 17.96 | 17.96 |
18 | State Bank Of India (SBI) | Letter of CreditSanctioned | _ | 86.21 | 86.21 |
19 | State Bank Of India (SBI) | Cash CreditSanctioned | 170.26 | _ | 170.26 |
20 | West Bengal Infrastructure Development Finance Corporation Limited | Term LoanSanctioned | 46.92 | _ | 46.92 |
21 | Yes Bank | Cash CreditSanctioned | 17.96 | _ | 17.96 |
Total | 1072.85 | 149.06 | 1221.91 | ||
TOTAL (Rupees One Thousand Two Hundred Twenty One Crores and Ninety One lakhs Only) |
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