RATING RATIONALE
08Mar2022

A.K Spintex Ltd.

Brickwork Ratings revises the ratings for the Bank Loan Facilities of Rs. 12.99 Crs. of A.K Spintex Ltd.

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(23 Oct 2020)
Present
Fund Based 9.18 12.99 Long Term BWR BB/Stable
Downgrade/ISSUER NOT COOPERATING*
BWR BB + /Stable
Upgrade
Grand Total 9.18 12.99 (Rupees Twelve Crores and Ninety 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
*** Note : Previous rating was done on the facilities of UCO Bank which is taken over by HDFC Bank in September 2021.


RATING ACTION / OUTLOOK

BWR upgraded  the long term bank loan ratings of  A.K. Spintex Limited  to BWR BB+ Stable and remove from Issuer Not Cooperating* Category.

The rating draws strength from the extensive experience of the promoters, & moderate Financial Risk Profile. . The rating of the firm  is constrained by inherent risk associated with industry, competition from presence of established players & Margins susceptible to volatility in raw material prices. 

The rating outlook has been assigned as "Stable" as BWR believes that A.K. Spintex Limited  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 there is improvement in revenues and profitability margins of the company. The rating outlook may be revised to 'Negative' if there is any deterioration in financial risk profile or any liquidity issues.

KEY RATING DRIVERS

Credit Strengths:


Credit Risks:

ANALYTICAL APPROACH - Standalone

For Arriving at the Rating BWR has used Consolidated Approach considering Standalone Financials of Pruthi Hospital & Capitol Hospital.For arriving at its ratings, as detailed in the Rating Criteria detailed below (hyperlinks provided at the end of this rationale).

RATING SENSITIVITIES

Going forward, the ability of the company  to improve its revenues along with sustainability in profitability margins  would remain the key rating sensitivities.

Positive: Rating may be upgraded in case of substantial improvement in revenues and able to sustained profitability margins.

Negative: Rating may be downgraded in case there is deterioration in financial risk profile of the firm  including the liquidity of the firm.

LIQUIDITY INDICATORS - Adequate

The company has no associate concerns or subsidiary concerns. The company has cash & bank balances of Rs 0.02 crores in FY21 (Audited). The company has average utilisation of 60% in last 5 months of their cash credit limit. The company has long term borrowings of Rs 5.11 comprises of term loans of Rs 3.44 crores and covid loan of Rs 1.67 in FY21 (Audited). The company has cash accruals of Rs 3.84 crores against the CPLTD of Rs 1.49 crores. The company has projected long term borrowings of Rs 3.52 crores in FY22 (Projected) comprises of term loans of Rs 3.52 crores. The company has projected cash accruals of Rs 4.46 crores against the CPLTD of Rs 1.50 crores in FY22 (projections). The company has Interest Service Coverage Ratio of 4.94 Times and Debt Service Coverage Ratio of 2.25 Times in FY21 (Audited). The current ratio has been 1.36 Times in FY21 (Audited). The company has negative conversion cycle of 17 days in FY21 (Audited).

ABOUT THE ENTITY

A.K. Spintex Ltd. was incorporated in Bhilwara, Rajasthan in 1994. The main objective of the company is to process (including dyeing & printing) synthetic and cotton grey fabric on a job-work basis. The manufacturing unit of the company is located in Bhilwara. The total capacity of the plant is 36,00,000 Mtr. The company is promoted by Mr. Prakash Chand (Managing Director) and Mr. Tilok Chand (director). The shares of the company have been listed on the Bombay Stock Exchange since August, 2015. 

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 20-21
(Audited)
FY 19-20
(Audited)
Operating Revenue Rs.Crs. 48.00 63.58
EBITDA Rs.Crs. 4.69 7.14
PAT Rs.Crs. 0.46 1.91
Tangible Net Worth Rs.Crs. 21.39 20.93
Total Debt/Tangible Net Worth Times 0.51 0.49
Current Ratio Times 1.36 1.36

NON-COOPERATION WITH PREVIOUS CREDIT RATING AGENCY

CRISIL BB+ Stable under Issuer Not Cooperation on 29.10.2021.

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 12.99
BWR BB+/Stable
(Upgrade)
NA
NA
23Oct2020
BWR BBStable
(Downgrade/ISSUER NOT COOPERATING*)
27Jun2019
BWR BB+Stable
(Assignment)
Grand Total 12.99 (Rupees Twelve Crores and Ninety Nine lakhs Only)
*** Note : Previous rating was done on the facilities of UCO Bank which is taken over by HDFC Bank in September 2021. 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

Aman sharma

Rating Analyst Board : +91 172 5032 295 / 6 aman.s@brickworkratings.com

V.K.Kukreja

Associate Director - Ratings Board : +91 11 2341 2232 kukreja.vk@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
A.K Spintex 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 HDFC Bank Term LoanOut-standing 5.49 _ 5.49
2 HDFC Bank Cash CreditSanctioned 7.50 _ 7.50
Total 12.99 0.00 12.99
TOTAL (Rupees Twelve Crores and Ninety Nine lakhs Only)
* Note : Previous rating was done on the facilities of UCO Bank which is taken over by HDFC Bank in September 2021.

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