RATING RATIONALE
21Dec2022

Aarvee Denims and Exports Ltd.

Brickwork Ratings downgrades / reaffirms the ratings for the Bank Loan Facilities of Rs. 311.97 Crs. of Aarvee Denims and Exports Ltd. based on best available information, as the issuer did not cooperate.

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(01 Sep 2021)
Present
Fund Based 292.68 292.68 Long Term BWR B+ /Stable
Reaffirmation
BWR B /Stable
ISSUER NOT COOPERATING* /Downgrade
Non Fund Based 19.29 19.29 Short Term BWR A4
Reaffirmation
BWR A4
ISSUER NOT COOPERATING* /Reaffirmation
Grand Total 311.97 311.97 (Rupees Three Hundred Eleven Crores and Ninety Seven 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

The rating was due for review in  September-2022. The financial information is available with BWR, as the company is listed on BSE. However, other business related information is not available due to management non cooperation. BWR took up with the issuer to provide required information in timely manner over the emails and through telephone calls. Despite the best efforts of BWR to get at least the minimum required information for a review, the entity has not provided the same.  On account of non availability of adequate information/ irregular submission of NDS, BWR is unable to assess the Company’s overall performance and its ability to service its debt and maintain a valid rating.  Hence on account of inadequate information and lack of management cooperation, Brickworks Ratings downgraded  the long term bank loan rating to BWR B (Stable) / reaffirms the short term rating to BWR A4 and migrating to 'Issuer Not Cooperating' category.

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 the 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 ENTITY

Aarvee Denims and Exports Limited (ADEL) is a listed Public Limited Company having composite integrated manufacturing facilities for manufacturing of a wide range of Denim Fabrics with present installed capacity of around 85 Million Mtrs. of Denim Fabrics. ADEL has in-house yarn manufacturing facilities for denim, used for captive consumption. The company has a cotton yarn manufacturing capacity of 39,000 MTPA. The company also sources yarn from local markets for a variety of denim products. It sells surplus yarn in the local market. 

ADEL has three operating plants, first in Vijay Farm, Narol having one Integrated Spinning/ Weaving/ Processing Division and second in Narol having one Weaving/ Processing Division and third in Matoda having one Spinning Division. Apart from that the Company is having 5 windmill for captive purpose located in Kutch.

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

Not Applicable

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 292.68
BWR B/Stable
(ISSUER NOT COOPERATING* /Downgrade)
25Aug2021
BWR BWR B+Stable
(Reaffirmation)
20Oct2020
BWR BWR B+Credit watch with negative implication
(Downgraded)
17Oct2019
BWR BWR BBBNegative
(Downgraded)
0.00
NA
05Jul2021
BWR BWR B+/INCStable
(Reaffirmation)
27Feb2020
BWR BWR BBNegative
(Downgraded)
NA
NA
0.00
NA
05Apr2021
BWR BWR B+Credit Watch with Negative Implications
(Reaffirmation)
NA
NA
NA
NA
0.00
NA
01Sep2021
BWR B+ Stable
(Reaffirmation)
NA
NA
NA
NA
Non Fund Based ST 19.29
BWR A4
(ISSUER NOT COOPERATING* /Reaffirmation)
25Aug2021
BWR BWR A4
(Reaffirmation)
20Oct2020
BWR BWR A4
(Reaffirmed)
17Oct2019
BWR BWR A3+
(Downgraded)
0.00
NA
05Jul2021
BWR BWR A4
(Reaffirmation)
27Feb2020
BWR BWR A4
(Downgraded)
NA
NA
0.00
NA
05Apr2021
BWR BWR A4
(Reaffirmation)
NA
NA
NA
NA
0.00
NA
01Sep2021
BWR A4
(Reaffirmation)
NA
NA
NA
NA
Grand Total 311.97 (Rupees Three Hundred Eleven Crores and Ninety Seven lakhs Only)
Rating Advisory, as on 26Oct2022
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

Kunjal Dabhi

Rating Analyst Board : +91 79 66174046 / 47 kunjal.r@brickworkratings.com

Vidya Shankar

Principal Director - Ratings Board : +91 80 4040 9940 vidyashankar@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Aarvee Denims and Exports 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 Bank of Baroda Corporate LoanSanctioned _ _ 0.00
2 Bank of Baroda Cash CreditSanctioned 65.28 _ 65.28
3 Bank of Baroda Bank GuaranteeSanctioned _ 8.00 8.00
4 Bank of Baroda Emergency Credit Line Guarantee Scheme (ECLGS)Sanctioned 16.45 _ 16.45
5 Bank of India Emergency Credit Line Guarantee Scheme (ECLGS)Sanctioned 5.17 _ 5.17
6 Bank of India Bank GuaranteeSanctioned _ 3.50 3.50
7 Bank of India Cash CreditSanctioned 21.50 _ 21.50
8 Standard Chartered Bank Term LoanSanctioned 23.65 _ 23.65
9 Standard Chartered Bank Cash CreditSanctioned 50.12 _ 50.12
10 Standard Chartered Bank Bank GuaranteeSanctioned _ _ 0.00
11 Standard Chartered Bank Emergency Credit Line Guarantee Scheme (ECLGS)Sanctioned 12.75 _ 12.75
12 State Bank Of India (SBI) Emergency Credit Line Guarantee Scheme (ECLGS)Sanctioned 13.98 _ 13.98
13 State Bank Of India (SBI) Bank GuaranteeSanctioned _ 2.19 2.19
14 State Bank Of India (SBI) Cash CreditSanctioned 54.40 _ 54.40
15 TATA Capital Financial Services Limited Term LoanSanctioned 1.41 _ 1.41
16 TATA Capital Financial Services Limited Emergency Credit Line Guarantee Scheme (ECLGS)Sanctioned 0.64 _ 0.64
17 Yes Bank Cash CreditSanctioned 18.96 _ 18.96
18 Yes Bank Term LoanSanctioned 3.21 _ 3.21
19 Yes Bank Bank GuaranteeSanctioned _ 5.60 5.60
20 Yes Bank Emergency Credit Line Guarantee Scheme (ECLGS)Sanctioned 5.16 _ 5.16
Total 292.68 19.29 311.97
TOTAL (Rupees Three Hundred Eleven Crores and Ninety Seven lakhs Only)
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