Brickwork Ratings downgrades the rating for the Bank Loan Facilities of Rs. 48.00 Crs. of SSV Pharma Pvt. Ltd.
Particulars| Facilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
|---|---|---|---|---|---|
| Previous | Present | Previous (24 Mar 2020) |
Present | ||
| Fund Based | 48.00 | 48.00 | Long Term |
BWR BB-
/Stable |
BWR D
Downgrade |
| Grand Total | 48.00 | 48.00 | (Rupees Forty Eight Crores Only) | ||
Brickwork Ratings (BWR) has downgraded the rating as BWR D to SSV Pharma Pvt. Ltd.
The downgrade of the rating is based on the feedback received from the company’s banker about the delays made by the company in servicing the interest obligations related to the term loan facility from the bank. The rating of the company is also constrained by intense competition due to presence of many small and large players in the industry and being at nascent stage of operations with few orders in hand. However, the considerable experience of the management, established track record of the promoters, group support and increased promoters contribution, have also been duly considered in the rating review process.
The rating may be upgraded in case the company pay its interest obligations on time, achieve its projected revenue and maintains overall financial risk profile.
KEY RATING DRIVERSCredit Strengths:
Promoter directors have vast business experience. Mr. Venkateswara Rao, Managing Director & founder of SSV group of companies has more than two decades of experience in the field of Real Estate, Infrastructure, Ginning & Spinning mill supported by qualified and experienced management. Their long experience, understanding of business dynamics and experienced management shall drive the business growth.
Net worth of the company in FY 20 stood at Rs 9.76 Crs more than FY 19 led to a low gearing of 0.49x in FY 20. It further improved in FY 21 and stood at Rs 19.94 Crs on a provisional basis due to infusion of capital by the promoters.
The management has been able to identify prospective customers for its bulk drugs/ intermediates and has received orders from Laurus Labs Ltd and Mylan Laboratories while few are in under process.
Credit Risks:
As per the banker feedback and bank statement, there is a delay of upto 10 days (Oct 20 to Feb 21) in interest payment of term loan while interest for the month of Mar 21 is not paid yet. However, as per the banker the account is standard under SMA-0 category.
Pharmaceuticals is one of the most closely monitored and controlled industry; any breach can have significant business impact. Further, there is a high competition due to presence of many small and large players in the industry which limits the product pricing and profitability of the company.
The company has started its commercial operations in April 2021 with few orders from companies like Laurus Labs Ltd and Mylan Laboratories. Hence, there is a risk related to successful execution of the product in the market and attaining the projected revenue. However, as per the management few orders from its probable customers are under process which will be executed in the coming months.
For arriving at its ratings, Brickwork Ratings has applied its rating methodology as detailed in the Rating criteria below (hyperlinks provided at the end of this rationale).
RATING SENSITIVITIES
Going forward, the ability of the company to ensure timely payment of its debt obligations, as well as achieving its projected revenue and maintaining overall financial risk profile would be the key rating sensitivities.
Positive: The rating may be upgraded in case the company pay its interest obligations on time, achieve its projected revenue and maintains overall financial risk profile.
LIQUIDITY INDICATORS - Stretched
The company has started its commercial operations in April 2021. Hence, other key financial ratios are yet to be achieved.
ABOUT THE ENTITYSSV Pharma Private Limited (SPPL) was incorporated as a private limited company on 22nd August 2016 at Ameerpet, Hyderabad now changed to Khanamet, Hyderabad. The company is formed to set up a bulk drugs / active pharmaceutical ingredients manufacturing unit at plot no. 1A, APSEZ, Visakhapatnam, Andhra Pradesh. Mr. G Venkateswara Rao is managing director of the company also, the founder of SSV group is qualified and has more than 2 decades of experience in the field of real estate, construction, ginning & spinning industries.
KEY FINANCIAL INDICATORS (Standalone)| Key Parameters | Units |
FY 19-20 (Audited) |
FY 18-19 (Audited) |
|---|---|---|---|
| Operating Revenue | Rs.Crs. | Not Available | Not Available |
| EBITDA | Rs.Crs. | Not Available | Not Available |
| PAT | Rs.Crs. | -0.01 | Not Available |
| Tangible Net Worth | Rs.Crs. | 9.76 | 0.01 |
| Total Debt/Tangible Net Worth | Times | 0.49 | 126.02 |
| Current Ratio | Times | 0.76 | 504.97 |
NA
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 | 48.00 |
BWR D
(Downgrade) |
24Mar2020 |
BWR BB-/Stable
() |
NA |
NA
|
NA |
NA
|
| Grand Total | 48.00 | (Rupees Forty Eight 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 | |
|---|---|
|
Nitish Kumar Rating Analyst nitish.k@brickworkratings.com |
Nagaraj K Associate Director - Ratings Board : +91 80 4040 9940 nagaraj.ks@brickworkratings.com |
| 1-860-425-2742 | media@brickworkratings.com | |
| SL.No. | Type Of Facilities | Long Term(Rs.Crs.) | Short Term(Rs.Crs.) | Total(Rs.Crs.) | ||
|---|---|---|---|---|---|---|
| 1 | Cash CreditSanctioned | 6.00 | _ | 6.00 | ||
| 2 | Term LoanSanctioned | 42.00 | _ | 42.00 | ||
| Total | 48.00 | 0.00 | 48.00 | |||
| TOTAL (Rupees Forty Eight Crores Only) | ||||||
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