RATING RATIONALE
08Nov2022

McNally Bharat Engineering Company Ltd.

Brickwork Ratings reaffirms the ratings for the Bank Loan Facilities of Rs. 4863.78 Crs. of McNally Bharat Engineering Company Ltd. and retains the ratings in the Issuer Not Cooperating category, based on best available information, as the issuer did not cooperate.

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(04 Oct 2021)
Present
Fund Based 1673.13 1673.13 Long Term BWR D
Reaffirmation/ISSUER NOT COOPERATING*
BWR D
Continues to be in ISSUER NOT COOPERATING* category/Reaffirmed
Non Fund Based 55.00 55.00 Long Term BWR D
Reaffirmation/ISSUER NOT COOPERATING*
BWR D
Continues to be in ISSUER NOT COOPERATING* category/Reaffirmed
3135.65 3135.65 Short Term BWR D
Reaffirmation/ISSUER NOT COOPERATING*
BWR D
Continues to be in ISSUER NOT COOPERATING* category/Reaffirmed
Grand Total 4863.78 4863.78 (Rupees Four Thousand Eight Hundred Sixty Three Crores and Seventy Eight 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.
*** As per information available with us at the time of the last rating on July 21, 2017 the company enjoyed banking facilities aggregating Rs.4863.72 Crores from banks through a consortium arrangement. The Lead Bank of the consortium was Bank of India.


RATING ACTION / OUTLOOK / NATURE OF NON-COOPERATION

The initial rating of the company was done on July 24, 2017 and a rating of BWR B, Stable/A4 was assigned. The ratings were downgraded to BWR D on October 04, 2018 on account of adverse comments of their Auditors as well as non cooperation and inadequate information from the client, and was also simultaneously migrated to the Issuer Not Cooperating category. The ratings were reaffirmed on September 18, 2020 at BWR D, Issuer Not Cooperating, for want of adequate information.

BWR has thereafter followed up with the company and the bankers via recent emails and calls which were not responded to either by the company or by the bankers. The company has also not been submitting the monthly NDS for a long period of time. Hence in the absence of adequate information from the company itself, their non-submission of NDS and absence of feedback from their lenders, BWR is not in a position to make an appropriate assessment of the present status of the company, and the rating has been reaffirmed at BWR D, and retained in the Issuer Not Cooperating category, based on best available information as the Issuer did not cooperate.. The rating reaffirmation also takes into account the information about the company as appearing in the public domain. 

 

 

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 ratings should therefore take into account the possible deterioration in the credit quality of the rated entity arising from its non- transparency and withholding of information required for a review of the rating.

ABOUT THE ENTITY

McNally Bharat Engineering Company Limited (MBECL) is one of the established Engineering Companies in India, which was incorporated on 10th July 1961 under the name of McNally Bird Engg. Co. Ltd as a joint venture between McNally Pittsburg, USA and Bird & Co. The company was subsequently renamed as McNally Bharat Engineering Company Limited (MBECL) in the year1972. In the year 1980 the Company was taken over by Williamson Magor Group. The Company, headquartered at Kolkata, is engaged in providing Turnkey solutions in the areas of Power, Steel, Alumina, Material Handling, Mineral Beneficiation, Coal washing, Ash handling and disposal, Port Cranes, Civic and Industrial water supply etc. It also has many subsidiaries and associates, both in India and abroad. The company is listed on both BSE and NSE.

 

 

 

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

NA

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)
Facilities Current Rating  (2022) 2021 2020 2019
Type Tenure Amount
(Rs.Crs.)
Rating Date Rating Date Rating Date Rating
Fund Based LT 1673.13
BWR D
(Continues to be in ISSUER NOT COOPERATING* category/Reaffirmed)
04Oct2021
BWR D
(Reaffirmation/ISSUER NOT COOPERATING*)
18Sep2020
BWR D
(Reaffirmation/ISSUER NOT COOPERATING*)
NA
NA
Non Fund Based LT 55.00
BWR D
(Continues to be in ISSUER NOT COOPERATING* category/Reaffirmed)
04Oct2021
BWR D
(Reaffirmation/ISSUER NOT COOPERATING*)
NA
NA
NA
NA
Non Fund Based ST 3135.65
BWR D
(Continues to be in ISSUER NOT COOPERATING* category/Reaffirmed)
04Oct2021
BWR D
(Reaffirmation/ISSUER NOT COOPERATING*)
18Sep2020
BWR D
(Reaffirmation/ISSUER NOT COOPERATING*)
NA
NA
Grand Total 4863.78 (Rupees Four Thousand Eight Hundred Sixty Three Crores and Seventy Eight lakhs Only)
COMPLEXITY LEVELS OF THE INSTRUMENTS - NA

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

Ambar Kumar Chauhan

Ratings Analyst ambarkumar.c@brickworkratings.com

Anuradha Gupta

Director - Ratings anuradha.g@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
McNally Bharat Engineering Company 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 Indian Bank Cash CreditSanctioned 25.00 _ 25.00
2 Indian Bank Letter of CreditSanctioned _ 75.00 75.00
3 Axis Bank Ltd. Letter of CreditSanctioned _ 260.00 260.00
4 Axis Bank Ltd. Term LoanSanctioned 130.00 _ 130.00
5 Axis Bank Ltd. Cash CreditSanctioned 30.00 _ 30.00
6 Axis Bank Ltd. Bank GuaranteeSanctioned _ 100.00 100.00
7 Bank of Baroda Bank GuaranteeSanctioned _ 100.00 100.00
8 Bank of Baroda Cash CreditSanctioned 25.00 _ 25.00
9 Bank of India Cash CreditSanctioned 285.00 _ 285.00
10 Bank of India Bank GuaranteeSanctioned _ 344.00 344.00
11 Bank of India Letter of CreditSanctioned _ 80.00 80.00
12 Canara Bank Cash CreditSanctioned 10.00 _ 10.00
13 Canara Bank Bank GuaranteeSanctioned _ 50.00 50.00
14 DCB Bank Bank GuaranteeSanctioned _ 8.65 8.65
15 DCB Bank Cash CreditSanctioned 3.50 _ 3.50
16 HDFC Bank Cash CreditSanctioned 15.00 _ 15.00
17 HDFC Bank Bank GuaranteeSanctioned _ 85.00 85.00
18 HDFC Bank Term LoanSanctioned 50.00 _ 50.00
19 ICICI Bank Term LoanSanctioned 40.14 _ 40.14
20 ICICI Bank Letter of CreditSanctioned _ 3.30 3.30
21 ICICI Bank Bank GuaranteeSanctioned _ 168.70 168.70
22 ICICI Bank Cash CreditSanctioned 110.00 _ 110.00
23 IDBI Bank Cash CreditSanctioned 125.00 _ 125.00
24 IDBI Bank Bank GuaranteeSanctioned _ 368.00 368.00
25 IDBI Bank Letter of CreditSanctioned _ 50.00 50.00
26 IDBI Bank Term LoanSanctioned 9.00 _ 9.00
27 Karur Vysya Bank Letter of CreditSanctioned _ 25.00 25.00
28 Karur Vysya Bank Bank GuaranteeSanctioned _ 225.00 225.00
29 Karur Vysya Bank Cash CreditSanctioned 30.00 _ 30.00
30 Kotak Mahindra Bank Cash CreditSanctioned 15.00 _ 15.00
31 Lakshmi Vilas Bank Cash CreditSanctioned 1.00 _ 1.00
32 Lakshmi Vilas Bank Bank GuaranteeSanctioned _ 9.00 9.00
33 Lakshmi Vilas Bank Letter of CreditSanctioned _ 10.00 10.00
34 Punjab National Bank Bank GuaranteeSanctioned _ 25.00 25.00
35 Punjab National Bank Cash CreditSanctioned 1.00 _ 1.00
36 Punjab National Bank Cash CreditSanctioned 15.00 _ 15.00
37 Punjab National Bank Bank GuaranteeSanctioned _ 200.00 200.00
38 RBL Bank Term LoanSanctioned 142.49 _ 142.49
39 Standard Chartered Bank Bank GuaranteeSanctioned _ 75.00 75.00
40 Standard Chartered Bank Cash CreditSanctioned 25.00 _ 25.00
41 State Bank Of India (SBI) Cash CreditSanctioned 100.00 _ 100.00
42 State Bank Of India (SBI) Bank GuaranteeSanctioned _ 500.00 500.00
43 State Bank Of India (SBI) Letter of CreditSanctioned _ 50.00 50.00
44 UCO Bank Bank GuaranteeSanctioned _ 54.00 54.00
45 UCO Bank Cash CreditSanctioned 10.00 _ 10.00
46 Union Bank of India Cash CreditSanctioned 20.00 _ 20.00
47 Union Bank of India Bank GuaranteeSanctioned _ 250.00 250.00
48 Punjab National Bank Bank GuaranteeSanctioned 55.00 _ 55.00
49 Punjab National Bank Cash CreditSanctioned 1.00 _ 1.00
50 Yes Bank Bank GuaranteeSanctioned _ 20.00 20.00
51 Yes Bank Term LoanSanctioned 455.00 _ 455.00
Total 1728.13 3135.65 4863.78
TOTAL (Rupees Four Thousand Eight Hundred Sixty Three Crores and Seventy Eight lakhs Only)
Print and Digital Media

The Rating Rationale is sent to you for the sole purpose of dissemination through your print, digital or electronic media. While it may be used by you acknowledging credit to BWR, please do not change the wordings in the rationale to avoid conveying a meaning different from what was intended by BWR. BWR alone has the sole right of sharing (both direct and indirect) its rationales for consideration or otherwise through any print or electronic or digital media.

About Brickwork Ratings

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 12,000 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. BWR has its corporate office in Bengaluru and a country-wide presence with its offices in Ahmedabad, Chandigarh, Chennai, Hyderabad, Kolkata, Mumbai and New Delhi along with representatives in 150+ locations.

Disclaimer

Brickwork Ratings India Pvt. Ltd. (BWR), a Securities and Exchange Board of India [SEBI] registered Credit Rating Agency and accredited by the Reserve Bank of India [RBI], offers credit ratings of Bank Loan facilities, 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. [ hereafter referred to as "Instruments"]. BWR also rates NGOs, Educational Institutions, Hospitals, Real Estate Developers, Urban Local Bodies and Municipal Corporations.

BWR wishes to inform all persons who may come across Rating Rationales and Rating Reports provided by BWR that the ratings assigned by BWR are based on information obtained from the issuer of the instrument and other reliable sources, which in BWR"s best judgment are considered reliable. The Rating Rationale / Rating Report & other rating communications are intended for the jurisdiction of India only. The reports should not be the sole or primary basis for any investment decision within the meaning of any law or regulation (including the laws and regulations applicable in Europe and also the USA).

BWR also wishes to inform that access or use of the said documents does not create a client relationship between the user and BWR.

The ratings assigned by BWR are only an expression of BWR"s opinion on the entity / instrument and should not in any manner be construed as being a recommendation to either, purchase, hold or sell the instrument.

BWR also wishes to abundantly clarify that these ratings are not to be considered as an investment advice in any jurisdiction nor are they to be used as a basis for or as an alternative to independent financial advice and judgment obtained from the user"s financial advisors. BWR shall not be liable to any losses incurred by the users of these Rating Rationales, Rating Reports or its contents. BWR reserves the right to vary, modify, suspend or withdraw the ratings at any time without assigning reasons for the same.

BWR"s ratings reflect BWR"s opinion on the day the ratings are published and are not reflective of factual circumstances that may have arisen on a later date. BWR is not obliged to update its opinion based on any public notification, in any form or format although BWR may disseminate its opinion and analysis when deemed fit.

Neither BWR nor its affiliates, third party providers, as well as the directors, officers, shareholders, employees or agents (collectively, "BWR Party") guarantee the accuracy, completeness or adequacy of the Ratings, and no BWR Party shall have any liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of any part of the Rating Rationales or Rating Reports. Each BWR Party disclaims all express or implied warranties, including, but not limited to, any warranties of merchantability, suitability or fitness for a particular purpose or use. In no event shall any BWR Party be liable to any one for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of any part of the Rating Rationales and/or Rating Reports even if advised of the possibility of such damages. However, BWR or its associates may have other commercial transactions with the company/entity. BWR and its affiliates do not act as a fiduciary.

BWR keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of the respective activity. As a result, certain business units of BWR may have information that is not available to other BWR business units. BWR has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process.

BWR clarifies that it may have been paid a fee by the issuers or underwriters of the instruments, facilities, securities etc., or from obligors. BWR"s public ratings and analysis are made available on its web site, www.brickworkratings.com. More detailed information may be provided for a fee. BWR"s rating criteria are also generally made available without charge on BWR"s website.

This disclaimer forms an integral part of the Ratings Rationales / Rating Reports or other press releases, advisories, communications issued by BWR and circulation of the ratings without this disclaimer is prohibited.

BWR is bound by the Code of Conduct for Credit Rating Agencies issued by the Securities and Exchange Board of India and is governed by the applicable regulations issued by the Securities and Exchange Board of India as amended from time to time.