Siva Ram Yarns Private Limited

Brickwork Ratings assigns the long-term and short-term ratings for the Bank Loan Facilities of Rs. 41.75 Crs. of Siva Ram Yarns Private Limited

Particulars

Facilities	Amount(Rs.Crs.)	Tenure	Rating	Regulator
Fund Based	11.15	Long Term	BWR BBB - /Stable Assignment	RBI
Non Fund Based	30.60	Short Term	BWR A3 Assignment	RBI
Grand Total	41.75	(Rupees Forty One Crores and Seventy Five lakhs Only)

Note:
1. Please refer to BWR website www.brickworkratings.com for the definition of the ratings
2. Refer to Annexures I, II, and III for details of rated bank loan facilities, debt instruments, and the List of Entities Consolidated RATING ACTION / OUTLOOK

Brickwork Ratings has assigned the long-term rating of BWR BBB- (Stable) and the short-term rating of BWR A3 to the bank loan facilities of Rs. 41.75 Crore of Sivaram Yarns Pvt Ltd. (hereinafter referred to as 'SYPL’ or the ‘Company’). For assigning the ratings, BWR has relied upon the last three years' consolidated financial statements up to FY26, projected financials for FY27 and FY28 of the group, and publicly available information and clarifications provided by the management.

The rating factors in strong support received from the parent company, Kennigton Industries Pvt Ltd (KIPL). The rating reflects a robust, volume-led operational improvement and a comfortable financial risk profile in the absence of any major long-term liabilities. Further, the rating is strengthened by the promoters' extensive experience and established presence in international yarn trading and contract manufacturing driven by long-term exclusive distribution partnerships for the past two decades. The rating, however, is constrained by subdued operating margins linked to trading activity, alongside exposure to volatility in raw material (cotton) prices, geographic customer concentration, and supplier concentration. This risk is partially mitigated by prudent working capital management and a low-capital-intensity, asset-light business model.

 

KEY RATING DRIVERS

Credit Strengths:

• Strong support from the parent :

  Siva Ram Yarns operates as a 100% subsidiary of Kennigton Industries Private Limited and benefits significantly from strong parent integration. Following the acquisition through the NCLT (CIRP) resolution process in 2022, Kennigton funded and subsequently fully discharged the acquisition term debt from Punjab National Bank. Kennigton provides strong credit enhancement by extending a parent corporate guarantee to back Siva Ram Yarns' sanctioned working capital lines. Furthermore, Siva Ram Yarns leverages Kennigton’s established global sourcing network, customer relationships, and administrative leadership under promoter Mr. Rajeev Ratanlal Tulshyan.

• Substantial Scale-Up in Revenue and Operational Turnaround :

  Following its integration into the Kennigton group, Siva Ram Yarns demonstrated a sharp operational turnaround in FY26. Total Operating Income (TOI) expanded by 254.25% YoY to reach Rs. 126.62 Cr (up from Rs. 35.74 Cr in FY25). Supported by top-line volume growth, Operating EBITDA turned positive at Rs. 7.37 Cr in FY26 (compared to an EBITDA loss of -Rs. 3.25 Cr in FY25), while Profit After Tax expanded to Rs. 1.95 Cr. The overall consolidated group revenue is estimated at around Rs 1800 crore in fiscal 2027. With trading expected to continue in the upcoming fiscal years, the group's revenue profile is likely to improve further.

Credit Risks:

• High Geographical and Product Concentration Risks :

  The company's product and geographical profiles display high concentration. Revenue is heavily reliant on a single product line, with Polyester Yarn accounting for 93.06% of total revenue in FY26 (Rs.117.83 Cr) sourced from leased manufacturing in Indonesia. Geographically, sales are concentrated in Western India, with Maharashtra contributing Rs. 86.21 Cr (68.09% share) and Gujarat accounting for Rs. 25.17 Cr (19.88% share) in FY26. This exposes the company to regional textile cluster demand fluctuations, weaving mill capacity utilization, and localized credit cycles.

• Exposure to Raw Material Volatility, Forex Risk, and Trade Tariff Shifts :

  Profitability remains vulnerable to fluctuations in global petrochemical prices (which govern polyester staple fiber and filament yarn costs) and cotton benchmarks. Inventory holding carries downside valuation risks during sudden market price drops. Furthermore, imported yarn procurement from Indonesia relies on favorable trade agreements, specifically zero-duty import benefits under the ASEAN-India Free Trade Area (FTA). Any adverse policy revisions, imposition of anti-dumping duties, or import tariff changes could increase landed costs and compress margins.

ANALYTICAL APPROACH - Consolidated

For arriving at its ratings, BWR has factored in support from Kennigton Industries Pvt Ltd (its parent company with debt rated at BWR BBB/Stable/BWR A3) by applying its parent support notch-up criteria, reflecting the strong operational, strategic, financial & legal linkages among these two entities. BWR has taken a consolidated view and applied its rating methodology as detailed in the Rating Criteria, as detailed below (hyperlinks provided at the end of this rationale)

Linkage Dimension	Strength	Key Rating Factors
Legal Linkages	Strong	Unconditional and irrevocable parent corporate guarantee extended by Kennigton to PNB for working capital facilities. Full discharge of NCLT acquisition term loan by Kennigton post-acquisition in 2022. Cross-default implications for Kennigton under guaranteed bank lines.
Operating Linkages	Strong	Common management control under primary promoter Mr. Rajeev Ratanlal Tulshyan. Shared 20-year exclusive Indonesian job-work contract with PT Delta Group for yarn processing. Functions as a dedicated contract manufacturing arm supplying polyester yarn into group distribution networks.
Financial Linkages	Strong	100% equity ownership with financial alignment and profit retention. Shared group treasury managing trade credit terms and Buyer's Credit facilities. Parent guarantee backing Rs. 35 Cr bank facilities. Loan from parent company of Rs. 1.3 cr as of FY26
Strategic Linkages	Strong	Core vehicle for scaling Polyester Yarn (Rs. 117.83 Cr in FY26) to complement Kennigton's Viscose/Lyocell distribution. Enables asset-light group expansion without heavy greenfield CapEx.

RATING SENSITIVITIES

Positive

• Sustained scale-up in consolidated operating revenues above Rs. 2200 crores, while maintaining the current level of margins, and improvement in key financial metrics such as TOL/TNW below 1.5x.
• Strengthening scale of operations at the standalone level above Rs. 350 crores, while maintaining the current level of margins,  leading to overall improvement of the group's credit profile.

Negative

• Deterioration in the consolidated operating profitability below 3% and TOL/TNW above 3x.
• Weakening of standalone credit profile and linkage between parent and subsidiary company

LIQUIDITY INDICATORS - Adequate

On a standalone basis, SYPL generated net cash accruals of Rs. 4.78 crores for FY2026 against current bank loan repayments of Rs. 2 crores. The expected cash accruals will remain between Rs. 4 and Rs. 6 crore. The unencumbered Cash and bank balances were Rs 0.04 crores as on March 31, 2025 and Rs. 0.09 crores as of 31st March, 2026. After considering one-way interchangeability from fund-based to non-fund-based, average fund-based working capital utilisation over the past 12 months ended 30th June 2026 stood at around 31%, and non-fund-based utilisation at around 90%. The current ratio is compressed at 0.84x, however projected to recover steadily to 1.25x in FY27 as top-line cash generation stabilizes.

On a consolidated basis, total short-term group debt of KIPL and SYPL stands at Rs. 216 crores. Both entities operate at 90% non-fund-based working capital utilization, indicating that the group is fully leveraging its available credit facilities to support a high volume of imports, backed by strong banking comfort. The group’s consolidated Current Ratio is stable at 1.24x, while the consolidated Quick Ratio stands at a defensive 0.56x. Combined Net cash accruals of Rs. 30.64 crores remain healthy and sufficient to support CPLTD of Rs. 5 crores. The group manages a total consolidated cash pool of Rs. 0.51 crores. 

ABOUT THE ENTITY

Siva Ram Yarns Private Limited is an unlisted domestic textile manufacturing company based in Andhra Pradesh that operates as a 100% subsidiary of Kennigton Industries Private Limited.  The company was acquired in 2022 through the NCLT (CIRP) resolution process on a clean-slate basis, supported by acquisition term debt from Punjab National Bank. Much like its parent entity, Kennigton, Siva Ram Yarns operates an asset-light model centered on contract manufacturing arrangements in Indonesia alongside domestic operations, to support the group’s specialty and blended yarn portfolio.  Further, Kennigton Industries provides a parent corporate guarantee to Punjab National Bank to support Siva Ram Yarns' ongoing working capital credit lines.

ESG Profile

The company demonstrates an evolving ESG profile based on its environmental, social, and governance practices.

Environmental: Environmental risks remain low and primarily center on supply chain logistics, energy efficiency, and waste management; the company reports no past environmental violations or regulatory penalties.

Social: Sivaram adheres strictly to statutory labor laws and safety norms across its leased facility in Kakinada, Andhra Pradesh. 

Governance: The company is a wholly owned subsidiary of Kennigton Industries Pvt Ltd. Internal governance is supported by established accounting controls, statutory compliance frameworks, and strict adherence to international trade regulations.

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 23 - 24 (Audited)	FY 24 - 25 (Audited)	FY 25 - 26 (Provisional)
Operating Revenue	Rs.Crs.	40.90	35.74	126.62
EBITDA	Rs.Crs.	3.32	-3.25	4.90
PAT	Rs.Crs.	0.00	0.48	1.95
Tangible Net Worth	Rs.Crs.	4.09	4.57	20.68
Total Debt / Tangible Net Worth	Times	7.58	7.04	2.24
Current Ratio	Times	1.36	1.47	0.84

KEY FINANCIAL INDICATORS (Consolidated)

Key Parameters	Units	FY 23 - 24 (Audited)	FY 24 - 25 (Audited)	FY 25 - 26 (Provisional)
Operating Revenue	Rs.Crs.	523.58	515.61	1234.41
EBITDA	Rs.Crs.	31.59	42.63	50.56
PAT	Rs.Crs.	6.83	13.45	19.82
Tangible Net Worth	Rs.Crs.	171.34	180.62	128.84
Total Debt / Tangible Net Worth	Times	1.85	1.70	1.75
Current Ratio	Times	1.21	1.21	1.24

KEY COVENANTS OF THE FACILITY RATED

The terms of the sanction include standard covenants typically required for such facilities. Additionally, Sivaram receives a corporate guarantee from Kennigton Industries Pvt Ltd, its holding company, for bank facilities of Rs. 35 crores.

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Not Applicable

RATING HISTORY FOR LAST THREE YEARS (including withdrawal and suspended)

Facilities	Current Rating  (2026)			2025		2024		2023
Type	Tenure	Amount (Rs.Crs.)	Rating	Date	Rating	Date	Rating	Date	Rating
Fund Based	LT	11.15	BWR BBB-/Stable (Assignment)	NA	NA	NA	NA	NA	NA
Non Fund Based	ST	30.60	BWR A3 (Assignment)	NA	NA	NA	NA	NA	NA
Grand Total		41.75	(Rupees Forty One Crores and Seventy Five lakhs Only)

Hyperlink/Reference to applicable Criteria

• General Criteria
• Short Term Debt
• Approach to Financial Ratios
• Ratings based on Parent Support
• Consolidation of Companies
• Trading Entities
• Manufacturing Company

Analytical Contacts
Muskan Jain Ratings Analyst muskan.j@brickworkratings.com	Niraj Kumar Rathi Senior Director Ratings niraj.r@brickworkratings.com
Client Support | clientsupport@brickworkratings.com

SL.No.	Name of the Bank/Lender	Type Of Facilities	Long Term(Rs.Crs.)	Short Term(Rs.Crs.)	Total(Rs.Crs.)	Complexity of the Instrument
1	Punjab National Bank	Term Loan - Out-standing	1.15	_	1.15	Simple##
2	Punjab National Bank	Cash Credit - Sanctioned	10.00	_	10.00	Simple##
3	Punjab National Bank	Letter of Credit - Sanctioned	_	30.00	30.00	Simple##
4	Punjab National Bank	Forward Contract - Sanctioned	_	0.60	0.60	Simple##
Total			11.15	30.60	41.75
TOTAL (Rupees Forty One Crores and Seventy Five lakhs Only)

## BWR complexity levels are meant for educating investors. The BWR complexity levels are available at www.brickworkratings.com / download / ComplexityLevels.pdf.

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