Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs. 83.00 Crs. of Anjani Spintex Pvt. Ltd.
Particulars| Facilities** | Amount(Rs.Crs.) | Tenure | Rating# | |
|---|---|---|---|---|
| Fund Based | 78.00 | Long Term |
BWR BB
/Stable Assignment |
|
| (8.00) | Short Term |
BWR A4
Assignment |
||
| (3.00) | ||||
| Non Fund Based | 5.00 | Short Term |
BWR A4
Assignment |
|
| (20.00) | ||||
| (0.53) | ||||
| Grand Total | 83.00 | (Rupees Eighty Three Crores Only) | ||
BWR has essentially relied upon the provisional financial statements of Anjani Spintex Pvt. Ltd. for FY22, Projected financial statements upto FY25, publicly available information and information/clarifications provided by the entity’s management.
The rating assignment factors the experience of the promoters in the line of textile industry, financial support by promoters and advantage of strategic location. The ratings also considers the project related risks such as timely commissioning and stabilization as per expected schedule and intense competition. Going further, timely implementation of the project set-up, infusion of the funds if required and revenue generation will remain crucial.
BWR believes the Anjani Spintex Pvt. Ltd.’s business risk profile will be maintained over the medium term. The ‘Stable’ outlook indicates a low likelihood of rating change over the medium term
KEY RATING DRIVERSCredit Strengths:
ASPL benefits from the extensive experience of its promoters in the textile industry for more than a decades through other associate concerns namely Khodal Industries, Abhishek Cotton Industries, Harikrishna Industries involved in cotton ginning business. The promoters have established and maintained healthy relationships with supplier and customers to successfully navigating the new spinning business.
Promoters supported financially to set up the plant and timely completion of project. Total projected cost is Rs. 120.79 Crs , which is 44% funded by promoters contribution and rest by bank term loans. As per the projected means of finance, the promoters to infuse the capital worth Rs, 34 Crs out of which the capital worth Rs. 33.14 Crs has already been infused till 30th June 2022. USLs are supposed to be brought of Rs. 19.79 crs and out of which the USL of Rs. 10.81 Crs has been infused. The project gearing is 1.25x considering unsecured loans as quasi capital. Promoters will infuse remaining funds in the business by the way of capital and unsecured loans before commencement of operation. All the necessary approvals are in placed.
ASPL is based in Botad, Gujarat, which is a part of the cotton belt in Gujarat located 92 Kms from Bhavnagar and 133 Kms from Ahmedabad city. ASPL can procure raw material and get other facilities easily available to reduce the logistics cost to make the operations more cost-effective.
The commercial operation of spinning plant is scheduled to commence from April 2023, hence the company is exposed to the project related risk of commencement and commissioning within the projected cost and in stipulated time frame. The company confirmed that the civil construction work is completed and machinery erection is under process as on 30th June 2022.
The operating performance is susceptible to risks related to intense competition from several players in both the organised and unorganised segment and sharp movement in raw material prices. These factors may result in an impact on the sales and operating margins. Furthermore, the company may target the international customers in future, which depends on the global demand and cotton spinning industry outlook.
For arriving at its ratings, BWR has considered a standalone financials of the company and applied its rating methodology as detailed in the Rating Criteria:
RATING SENSITIVITIES
Positive:
Negative:
The company's liquidity profile is adequate at present marked by promoters financial support and timely disbursement of term loan. Term loan repayment will start from September 2023 and the cash flows will begin after the commercial operation of the plant which is expected to start from April 2023. DSRA to be maintained for at least 3 months in form of FDRs and Cash credit limit of Rs. 11 Crs is sanctioned, which will be released at the time of commencement of operation. Going forward, stabilization of operation and positive cash generation will remain crucial for liquidity profile.
ABOUT THE ENTITY
Incorporated on 6 March, 2022, Anjani Spintex Private Limited (ASPL) proposed to set up a unit for carrying out an activity of cotton spinning at Botad, Bhavnagar, Gujarat. The installed capacity is 27360 spindles ~23000 Kgs of yarn per day. The envisaged cost of project is Rs. 120.79 Crs and expected to commence the commercial production from April-2023.
KEY FINANCIAL INDICATORS (Standalone)| Key Parameters | Units |
FY 21-22 (Provisional) |
FY 20-21 (Audited) |
|---|---|---|---|
| Operating Revenue | Rs.Crs. | Not Available | Not Available |
| EBITDA | Rs.Crs. | Not Available | Not Available |
| PAT | Rs.Crs. | Not Available | Not Available |
| Tangible Net Worth | Rs.Crs. | 31.34 | Not Available |
| Total Debt/TNW | Times | 0.06 | Not Available |
| Current Ratio | Times | 2.15 | Not Available |
Not Applicable
RATING HISTORY FOR LAST 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 | 78.00 |
BWR BB/Stable
(Assignment) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
| FB SubLimit | ST | (8.00) |
BWR A4
(Assignment) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
| (3.00) |
BWR A4
(Assignment) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
||
| Non Fund Based | ST | 5.00 |
BWR A4
(Assignment) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
| NFB SubLimit | ST | (20.00) |
BWR A4
(Assignment) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
| (0.53) |
BWR A4
(Assignment) |
NA |
NA
|
NA |
NA
|
NA |
NA
|
||
| Grand Total | 83.00 | (Rupees Eighty Three Crores Only) | |||||||
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 |
Dileep Narayan Singh Director dileep.s@brickworkratings.com |
| 1-860-425-2742 | media@brickworkratings.com | |
| SL.No. | Name of the Bank/Lender | Type Of Facilities | Long Term(Rs.Crs.) | Short Term(Rs.Crs.) | Total(Rs.Crs.) | |
|---|---|---|---|---|---|---|
| 1 | Indian Bank | Term LoanSanctioned | 31.00 | _ | 31.00 | |
| 2 | Indian Bank | Cash CreditSanctioned | 3.00 | _ | 3.00 | |
| Sub-Limit (EPC/PCFC/EBR/FBD) Sanctioned | (3.00) | |||||
| 3 | State Bank Of India (SBI) | Bank GuaranteeSanctioned | _ | 5.00 | 5.00 | |
| 4 | State Bank Of India (SBI) | Cash CreditSanctioned | 8.00 | _ | 8.00 | |
| 5 | State Bank Of India (SBI) | Term LoanSanctioned | 36.00 | _ | 36.00 | |
| Sub-Limit (Capex LC) Sanctioned | (20.00) | |||||
| Sub-Limit (Credit Exposure Limit) Sanctioned | (0.53) | |||||
| Sub-Limit (EPC/CFC/EBR/FBD) Sanctioned | (8.00) | |||||
| Total | 78.00 | 5.00 | 83.00 | |||
| TOTAL (Rupees Eighty Three Crores Only) | ||||||
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