RATING RATIONALE
20Apr2023

Sarup Industries Ltd

Brickwork Ratings downgrades the long term rating and reaffirms the short term rating and continues the ratings in the "Issuer Not Cooperating" category for the Bank Loan Facilities of Rs. 22.01 Crs. of Sarup Industries Ltd based on best available information, as the issuer did not cooperate.

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(21 Jan 2022)
Present
Fund Based 18.51 18.51 Long Term BWR B/Stable
Downgrade/ISSUER NOT COOPERATING*
BWR C
Continues to be in ISSUER NOT COOPERATING* category/Downgrade
Non Fund Based 3.50 3.50 Short Term BWR A4
Reaffirmation/ISSUER NOT COOPERATING*
BWR A4
Continues to be in ISSUER NOT COOPERATING* category/Reaffirmed
Grand Total 22.01 22.01 (Rupees Twenty Two Crores and One lakhs Only)
#Please refer to BWR website www.brickworkratings.com for definition of the ratings
**Details of Bank Loan facilities,consolidation or instruments are provided in Annexure
*Issuer did not cooperate; based on best available information.


RATING ACTION / OUTLOOK / NATURE OF NON-COOPERATION

In view of the non-availability of information and lack of cooperation from ‘Sarup Industries Ltd.’, Brickwork Ratings has downgraded the long term rating to ‘BWR C"  and reaffirmed the short term rating of ‘BWR A4’ and continued the ratings in the “Issuer Not Cooperating” category, based on best available information as the Issuer did not cooperate.

The lenders/investors may note to exercise due caution while using the above ratings which mention  "Issuer  Not  Cooperating",  since the rating lacks any projections or forward looking component as they are arrived at based on best available information without any management/banker's interaction.

The rating was due for review in January 2023. BWR took up with the company recently over emails and through telephone calls to obtain the required information. Despite the best efforts of BWR to get at least the minimum required information for a review,  the entity has not provided the same. 

Thus, due to lack of management cooperation to furnish adequate information about the company's performance despite follow up, coupled with its non submission of NDS, BWR is unable to assess its financial performance or its ability to service its debt and maintain a valid rating. Accordingly, the ratings have been downgraded / reaffirmed and continued in the “Issuer Not Cooperating” category. The rating downgrade is based on the lack of up-to-date information on the company’s performance.

LIMITATIONS OF THE RATING

Information availability risk is a key factor in the assessment of credit risk as generally, non-cooperation 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 possible deterioration in the credit quality of the rated entity arising from its non-transparency withholding of information required for a review of the rating.

ABOUT THE ENTITY

Jalandhar based Sarup Industries Limited (SIL), listed on the Bombay Stock Exchange, was incorporated in 1979. SIL is  engaged in  manufacturing of sports shoes and finished leather products on a contract basis for brands such as Puma, Reebok, Bata, Decathlon and United Colors of Benetton. SIL operates through three manufacturing facilities (2 being in Jalandhar, Punjab and 1 in Una, Himachal Pradesh) with a combined installed capacity of manufacturing 12 lakh shoe uppers and 18 lakh shoe pairs per annum.

KEY FINANCIAL INDICATORS

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

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Nil

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)
Facilities Current Rating  (2023) 2022 2021 2020
Type Tenure Amount
(Rs.Crs.)
Rating Date Rating Date Rating Date Rating
Fund Based LT 18.51
BWR C
Continues to be in ISSUER NOT COOPERATING* category/Downgrade
21Jan2022
BWR BStable
(Downgrade/ISSUER NOT COOPERATING*)
NA
NA
27Nov2020
BWR B+Stable
(Downgrade/ISSUER NOT COOPERATING*)
Non Fund Based ST 3.50
BWR A4
(Continues to be in ISSUER NOT COOPERATING* category/Reaffirmed)
21Jan2022
BWR A4
(Reaffirmation/ISSUER NOT COOPERATING*)
NA
NA
27Nov2020
BWR A4
(Reaffirmation/ISSUER NOT COOPERATING*)
Grand Total 22.01 (Rupees Twenty Two Crores and One lakhs Only)
COMPLEXITY LEVELS OF THE INSTRUMENTS - Simple

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.

Hyperlink/Reference to applicable Criteria
Analytical Contacts

Soubhagya Ranjan Kahalsingh

Senior Rating Analyst Board : +91 80 4040 9940 soubhagya.rs@brickworkratings.com

Ravi Rashmi Dhar

Associate Director - Ratings ravi.d@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Sarup Industries Ltd
ANNEXURE-I
Details of Bank Facilities rated by BWR
SL.No. Name of the Bank/Lender Type Of Facilities Long Term(Rs.Crs.) Short Term(Rs.Crs.) Total(Rs.Crs.)
1 State Bank Of India (SBI) Term LoanSanctioned 3.01 _ 3.01
2 State Bank Of India (SBI) Cash CreditSanctioned 15.00 _ 15.00
3 State Bank Of India (SBI) Stand by Line of CreditSanctioned 0.50 _ 0.50
4 State Bank Of India (SBI) ILC/FLC/BGSanctioned _ 3.50 3.50
Total 18.51 3.50 22.01
TOTAL (Rupees Twenty Two Crores and One lakhs Only)
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