RATING RATIONALE
22Mar2021

Riddhi Steel and Tube Ltd

Brickwork Ratings revises the ratings for the Bank Loan Facilities of Rs. 49.35 Crs. of Riddhi Steel and Tube Ltd

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(23 Jul 2020)
Present
Fund Based 49.10 49.10 Long Term BWR BB- (Stable) Issuer not cooperating*
Downgrade
BWR BB + /Stable
Upgrade
Non Fund Based 0.25 0.25 Short Term BWR A4 Issuer not cooperating*
Downgrade
BWR A4 +
Upgrade
Grand Total 49.35 49.35 (Rupees Forty Nine Crores and Thirty Five 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


RATING ACTION / OUTLOOK

BWR has essentially relied on Audited financials upto FY20, provisional financial for FY21, projected financial, publicly available information and information and clarifications provided by management.

The rating draws comfort from experienced promoters with long standing established relationships with clients, above average financial risk profile and improving operating performance. However, the rating is constrained by cyclical nature of industry and raw material price fluctuation and intense competition.

BWR believes that Riddhi Steel and Tube Ltd. 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 DRIVERS


Credit Strengths:


Credit Risks:

RATING SENSITIVITIES

Positive: An overall improvement in the Total operating income, EBITDA, profit margins while maintaining adequate liquidity.

Negative: Significant deterioration in the business revenue, working capital cycle and financial risk profile of the company.

LIQUIDITY INDICATORS - Adequate

Net cash accruals for FY20 were Rs. 6.36 Crs and analyzed net cash accruals to long term debt of 21%. Current ratio are healty at 1.98 times on March 31, 2020. Moderate gearing and moderate net worth support it's financial flexibility, and provides  the financial cushion available in case of any adverse conditions or downturn in the business.

ABOUT THE ENTITY

Started in 2001, Riddhi Steel and Tube Ltd was promoted by Mrs Preeti Mittal and Mr Rajesh Mittal based out of Ahmedabad. RSTL manufactures MS ERW pipes and tubes used mainly in various infrastructure and engineering projects, water supply and irrigation projects. In September 2016 the company got listed on SME. The company has an installed capacity of 60,000 MTPA and the manufacturing facility located at Kamod village Gujarat.

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 19-20
(Audited)
FY 18-19
(Audited)
Operating Revenue Rs.Crs. 291.69 376.54
EBITDA Rs.Crs. 17.35 19.26
PAT Rs.Crs. 3.06 4.98
Tangible Net Worth Rs.Crs. 45.27 42.20
Total Debt/Tangible Net Worth Times 2.19 2.45
Current Ratio Times 1.88 1.99

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)
Facilities Current Rating (2021) 2020 2019 2018
Type Tenure Amount
(Rs.Crs.)
Rating Date Rating Date Rating Date Rating
Fund Based LT 49.10
BWR BB+/Stable
23Jul2020
BWR BB- (Stable) Issuer not cooperating*
07Aug2019
BWR BBB- (Stable) Issuer not cooperating*
NA
NA
Non Fund Based ST 0.25
BWR A4+
23Jul2020
BWR A4 Issuer not cooperating*
07Aug2019
BWR A3 Issuer not cooperating
NA
NA
Grand Total 49.35 (Rupees Forty Nine Crores and Thirty Five 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

Siddharth Shah

Rating Analyst siddharth.s@brickworkratings.com

Dileep Narayan Singh

Director Ratings dileep.s@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Riddhi Steel and Tube Ltd
ANNEXURE-I
Details of Bank Facilities rated by BWR
SL.No. Type Of Facilities Long Term(Rs.Crs.) Short Term(Rs.Crs.) Total(Rs.Crs.)
1 Cash CreditSanctioned 44.50 _ 44.50
2 Term LoanSanctioned 4.60 _ 4.60
3 Bank GuaranteeSanctioned _ 0.25 0.25
Total 49.10 0.25 49.35
TOTAL (Rupees Forty Nine Crores and Thirty Five lakhs Only)
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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 11,400 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.

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