RATING RATIONALE
03Feb2022

Steel Space Pvt. Ltd

Brickwork Ratings upgrades the ratings for the Bank Loan Facilities of Rs. 19.49 Crs. of Steel Space Pvt. Ltd

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(29 Sep 2020)
Present
Fund Based 20.00 19.49 Long Term BWR BB+ /Stable
Reaffirmation/ISSUER NOT COOPERATING*
BWR BBB - /Stable
Upgrade
Grand Total 20.00 19.49 (Rupees Nineteen Crores and Forty Nine 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

Brickwork Ratings upgrades the rating to BWR BBB- (Stable) for the bank loan facilities amounting to Rs. 19.49 Crs. of Steel Space Pvt Ltd. BWR believes that Steel Space Pvt 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. The rating outlook may be revised to 'Positive' in case the revenues and profit show sustained improvement backed by a favorable industry scenario. The rating outlook may be revised to 'Negative' if the revenues and profit margins show lower than expected figures.

BWR has essentially relied upon the audited financial statements of steel Space Pvt Ltd for FY19, FY20 and FY21, and projections for FY22 and FY23, and information/clarifications provided by the entity’s management. The rating draws strength from the experienced management and established market position, moderate scale of operations, and moderate financial risk profile. The rating is however constrained by margins susceptible to changes in the government policies and volatility in the raw material prices in international market.

Going forward the ability of the company to maintain its overall financial risk profile would be its key rating sensitivity

KEY RATING DRIVERS

Credit Strengths:


Credit Risks:

RATING SENSITIVITIES

The ability of the company to successfully scale up its operations, while maintaining a comfortable financial risk profile
and adequate liquidity would be its key rating sensitivities.
Positive: The rating may be upgraded if the scale of operations, profitability and overall financial risk profile of the
company shows significant improvement.
Negative: The rating may be downgraded if there is a significant deterioration in the scale of operations and financial risk
profile affecting the debt servicing capacity of the company.

LIQUIDITY INDICATORS - Adequate

The liquidity profile of the company is adequate driven by current ratio of 1.36x during FY21. The liquidity is projected to remain at a similar level at 1.35x in FY22 and 1.6x in FY23  The cash and cash equivalents stood at Rs 5.86 Crs. as on March 2021. The Net Cash accruals of the company are Rs.8.28 and 11.23 for FY22 and FY23. These are sufficient to discharge the matured debt obligations in FY22 and FY23.

ABOUT THE ENTITY

Steel Space Pvt Ltd (‘SSPL’ or ‘the company’) was incorporated in the year 2007 at Kolkata by Mr. Ram Niwas Gupta. The directors of SSPL have been in the business of trading stainless steel raw materials since 1960. The company is engaged in trading of stainless steel sheets, coils, hot roll plates, hot roll coils, cold roll plates, cold roll coils along with austenitic stainless steel, martensitic stainless steel, ferritic stainless steel and duplex stainless steel. SSPL is the authorised dealers for Jindal Stainless Limited.

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 20-21
(Audited)
FY 19-20
(Audited)
Operating Revenue Rs.Crs. 371.54 356.49
EBITDA Rs.Crs. 8.94 8.60
PAT Rs.Crs. 3.79 3.33
Tangible Net Worth Rs.Crs. 46.03 42.23
Total Debt/Tangible Net Worth Times 1.04 0.95
Current Ratio Times 1.36 1.78

RATING HISTORY FOR THE PREVIOUS 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 19.49
BWR BBB-/Stable
(Upgrade)
NA
NA
29Sep2020
BWR BB+ Stable
(Reaffirmation/ISSUER NOT COOPERATING*)
06Aug2019
BWR BB+ Stable
(Reaffirmation)
Grand Total 19.49 (Rupees Nineteen Crores and Forty Nine lakhs 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

Rujuta Sadanand Zajam

Ratings Analyst rujuta.sz@brickworkratings.com

Sushil Kumar Chitkara

Director - Ratings Board : +91 22 2831 1426, +91 22 2831 1439 sushilkumar.c@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Steel Space Pvt. Ltd
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 State Bank Of India (SBI) Cash CreditSanctioned 15.00 _ 15.00
2 State Bank Of India (SBI) GECLSanctioned 2.99 _ 2.99
3 State Bank Of India (SBI) GECLSanctioned 1.50 _ 1.50
Total 19.49 0.00 19.49
TOTAL (Rupees Nineteen Crores and Forty Nine 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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