RATING RATIONALE
07Jun2023

Hindusthan Urban Infrastructure Limited.

Brickwork Ratings downgrades the ratings for the Bank Loan Facilities of Rs. 180.00 Crs. of Hindusthan Urban Infrastructure Limited based on the best available information, as the issuer did not cooperate.

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(23 Aug 2022)
Present
Fund Based 91.00 91.00 Long Term BWR BBB- /Negative
Reaffirmation and change in Outlook
BWR BB /Negative
ISSUER NOT COOPERATING*/Downgrade
Non Fund Based 89.00 89.00 Short Term BWR A3
Reaffirmation
BWR A4
ISSUER NOT COOPERATING*/Downgrade
Grand Total 180.00 180.00 (Rupees One Hundred Eighty Crores 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
Note: *Issuer did not cooperate; based on the best available information.


RATING ACTION / OUTLOOK

Brickwork Ratings (BWR) has downgraded the rating assigned to the bank facilities of Hindusthan Urban Infrastructure Limited (HUIL, or 'the company') to BWR BB /Negative and BWR A4 and migrated the ratings to the ISSUER NOT COOPERATING Category, based on the available information as the issuer did not cooperate. Being a listed entity, the company has published its Audited FY23 Financials on the stock exchange. The issuer had not submitted the NDS to BWR for more than three months. Despite the best efforts of BWR to get the NDS and other information, the entity has not provided the same. Hence, as per the SEBI guidelines, BWR has downgraded and migrated the rating to the "Issuer Not Cooperating" category, based on the available information.

 

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 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.

KEY RATING DRIVERS

ANALYTICAL APPROACH - Consolidated

For arriving at its ratings, BWR has applied its rating methodology as detailed in the Rating Criteria below (hyperlinks provided at the end of this rationale). The consolidated financials include the annual financial results of a subsidiary named Hindusthan Specialty Chemicals Ltd.

RATING SENSITIVITIES

Positive

Negative:

LIQUIDITY INDICATORS - Poor

As per the publicly available information, the liquidity of HUIL is poor marked by high limit utilization and cash losses registered in FY23 necessitating infusion of funds by promoter/promoter group entities. The average utilization of fund-based limits has remained high at around 90-95% for the past 12 months ended March 2023. On a consolidated basis, the debt service matrix i.e. ISCR and DSCR is at -0.49x and 0.15x in FY23. However, the gearing is comfortable at 0.84x in FY23.

ABOUT THE ENTITY

HUIL was established in 1959 and is currently headed by chairman, Mr.Raghavendra Anant Mody. The Company is a leading manufacturer of overhead conductors and electro-porcelain high tension insulators such as Disc, solidcore, hollow and railway. Its operations can be classified into two divisions,viz, conductors and insulators.The conductor manufacturing units are located in Khurda,Orissa and Guwahati, Assam with a combined installed capacity of 66,000 metric ton per annum (MTPA) and insulator manufacturing unit is located in Bhopal, Madhya Pradesh with installed capacity of 15,380 MTPA. It is listed on the Bombay stock exchange.

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 22-23
(Audited)
FY 21-22
(Audited)
Operating Revenue Rs.Crs. 221.59 289.22
EBITDA Rs.Crs. 3.39 6.87
PAT Rs.Crs. -10.58 -12.64
Tangible Net Worth Rs.Crs. 434.71 445.37
Total Debt/TNW Times 0.37 0.38
Current Ratio Times 1.50 1.59
KEY FINANCIAL INDICATORS (Consolidated)
Key Parameters Units FY 22-23
(Audited)
FY 21-22
(Audited)
Operating Revenue Rs.Crs. 584.63 739.89
EBITDA Rs.Crs. -19.79 55.10
PAT Rs.Crs. -58.07 -3.76
Tangible Net Worth Rs.Crs. 391.60 447.93
Total Debt/TNW Times 0.84 0.76
Current Ratio Times 0.93 1.22

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

NA

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)
Facilities Current Rating (2023) 2022 2021 2020
Type Tenure Amount
(Rs.Crs.)
Rating Date Rating Date Rating Date Rating
Fund Based LT 91.00
BWR BB/Negative
(ISSUER NOT COOPERATING*/Downgrade)
24Mar2022
BWR BBB- Stable
(Reaffirmation)
05Mar2021
BWR BBB-Stable
(Reaffirmation)
14Feb2020
BWR BBB-Stable
(Reaffirmation)
0.00
NA
23Aug2022
BWR BBB- Negative
(Reaffirmation and change in Outlook)
NA
NA
NA
NA
Non Fund Based ST 89.00
BWR A4
(ISSUER NOT COOPERATING*/Downgrade)
24Mar2022
BWR A3
(Reaffirmation)
05Mar2021
BWR A3
(Reaffirmation)
14Feb2020
BWR A3
(Reaffirmation)
0.00
NA
23Aug2022
BWR A3
(Reaffirmation)
NA
NA
NA
NA
Grand Total 180.00 (Rupees One Hundred Eighty Crores Only)
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

Pallav Kumar Goel

Rating Analyst pallavkumar.g@brickworkratings.com

Ravi Rashmi Dhar

Associate Director - Ratings ravi.d@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Hindusthan Urban Infrastructure Limited.
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 Canara Bank Term LoanSanctioned 10.92 _ 10.92
2 Canara Bank Cash CreditSanctioned 5.00 _ 5.00
3 Canara Bank GECLSanctioned 8.00 _ 8.00
4 Canara Bank ILC/FLCSanctioned _ 25.00 25.00
5 Canara Bank BG/LC/ILCSanctioned _ 35.00 35.00
6 IDBI Bank Cash CreditSanctioned 10.00 _ 10.00
7 IDBI Bank GECLSanctioned 4.00 _ 4.00
8 IDBI Bank BG/LC/ILCSanctioned _ 15.00 15.00
9 State Bank Of India (SBI) Funded Interest Term LoanSanctioned 0.56 _ 0.56
10 State Bank Of India (SBI) Cash CreditSanctioned 40.00 _ 40.00
11 State Bank Of India (SBI) BG/LC/ILCSanctioned _ 14.00 14.00
12 State Bank Of India (SBI) GECLSanctioned 12.52 _ 12.52
Total 91.00 89.00 180.00
TOTAL (Rupees One Hundred Eighty Crores Only)
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About Brickwork Ratings

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