RATING RATIONALE
13Sep2023

Mohit Paper Mills Ltd.

Brickwork Ratings downgrades the ratings for the Bank Loan Facilities of Rs. 33.69 Crs. of Mohit Paper Mills Ltd. based on best available information, as the issuer did not cooperate.

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(13 Jun 2022)
Present
Fund Based 31.19 31.19 Long Term BWR BBB-/Stable
Upgrade
BWR BB + /Stable
ISSUER NOT COOPERATING* /Downgrade
Non Fund Based 2.50 2.50 Short Term BWR A3
Upgrade
BWR A4
ISSUER NOT COOPERATING* /Downgrade
Grand Total 33.69 33.69 (Rupees Thirty Three Crores and Sixty Nine 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.
*** BWR is showing the amount of the term loan as per the previous rating rationale as the company has not submitted the latest sanction letter and bank account statements. Hence BWR is not aware of the latest outstanding amount of the term loans.


RATING ACTION / OUTLOOK / NATURE OF NON-COOPERATION

The ratings were due for review in June 2023. BWR took up with the company 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. In the absence of sufficient information from the company/ non-submission of NDS (No Default Statement) from the Company on a regular basis, BWR is unable to assess the company's financial performance and its ability to service its debt and maintain a valid rating. Hence, based on the best available information, BWR has downgraded the long-term rating to BWR BB+/Stable/short term rating to BWR A4 and placed it under the ISSUER NOT COOPERATING* category. Such non - cooperation by a rated entity may be a result of deterioration in its credit risk profile.

In view of the non-availability of information and lack of cooperation from ‘Mohit Paper Mills Ltd.’, Brickwork Ratings has downgraded the long-term rating to BWR BB+(Stable) / short term rating to BWR A4 and migrated the rating into “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 rating which mentions "Issuer Not Cooperating" since the rating lack any projections or forward looking component as it is arrived at based on the best available information without any management/banker's interaction.

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
Macro Economic Indicator Sector Industry Basic Industry
Commodities Forest Materials Paper, Forest & Jute Products Paper & Paper Products

Mohit Paper Mills Limited (MPML) was incorporated as a public limited company in 1992. The company manufactures printing and writing paper, newsprint, soda ash and tissues papers at its 3 manufacturing plants with an aggregated installed capacity of 42900 MTPA and captive plant of 7.5 MW. The company is listed on the Bombay Stock Exchange. MMPL sells its product under the brand names - Sapphire Plus, Crystal Bright, and Sunshine with a distribution network in PAN India. The company is promoted by Mr. Sandeep Jain and his family. 

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 31.19
BWR BB+/Stable
(ISSUER NOT COOPERATING* /Downgrade)
12Apr2022
BWR BB+Stable
(Reaffirmation)
22Jan2021
BWR BB+Stable
(Downgrade)
NA
NA
0.00
NA
13Jun2022
BWR BBB-Stable
(Upgrade)
NA
NA
NA
NA
Non Fund Based ST 2.50
BWR A4
(ISSUER NOT COOPERATING* /Downgrade)
12Apr2022
BWR A4+
(Reaffirmation)
22Jan2021
BWR A4+
(Downgrade)
NA
NA
0.00
NA
13Jun2022
BWR A3
(Upgrade)
NA
NA
NA
NA
Grand Total 33.69 (Rupees Thirty Three Crores and Sixty Nine 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

Vijayalakshmi R

Senior Rating Analyst Board : +91 044 24663326 vijayalakshmi.r@brickworkratings.com

RamaKrishna

Director - Ratings ramakrishna@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Mohit Paper Mills 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 Union Bank of India Term Loan 3.29 _ 3.29
2 Union Bank of India Cash Credit 21.00 _ 21.00
3 Union Bank of India Bank Guarantee _ 0.25 0.25
4 Union Bank of India Foreign Letter of Credit (FLC) _ 2.25 2.25
5 Union Bank of India CECL 0.23 _ 0.23
6 Union Bank of India Covid Term Loan 6.67 _ 6.67
Total 31.19 2.50 33.69
TOTAL (Rupees Thirty Three Crores and Sixty Nine lakhs Only)
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Brickwork Ratings (BWR), a Securities and Exchange Board of India [SEBI] registered Credit Rating Agency and accredited by Reserve Bank of India [RBI], offers credit ratings of Bank Loan, Non- convertible / convertible / partially convertible debentures and other capital market instruments and bonds, Commercial Paper, perpetual bonds, asset-backed and mortgage-backed securities, partial guarantees and other structured / credit enhanced debt instruments, Security Receipts, Securitization Products, Municipal Bonds, etc. BWR has rated over 11,560 medium and large corporates and financial institutions’ instruments. BWR has also rated NGOs, Educational Institutions, Hospitals, Real Estate Developers, Urban Local Bodies and Municipal Corporations. BWR has Canara Bank, a leading public sector bank, as one of the promoters and strategic partner.

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