RATING RATIONALE
25Mar2022

Khaitan Winding Wire Pvt. Ltd.

Brickwork Ratings reaffirms the ratings for the Bank Loan Facilities of Khaitan Winding Wire Pvt. Ltd. for an enhanced aggregate amount of Rs. 52.36 Crs.

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(10 Feb 2021)
Present
Fund Based 29.00 41.36 Long Term BWR BBB- /Stable
Reaffirmation
BWR BBB - /Stable
Reaffirmation
Non Fund Based 9.00 11.00 Short Term BWR A3
Reaffirmation
BWR A3
Reaffirmation
Grand Total 38.00 52.36 (Rupees Fifty Two Crores and Thirty Six 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 reaffirmed the ratings for the long term bank loan facilities of Khaitan Winding Wire Pvt. Ltd. for Rs.41.36 Crs.(enhanced from Rs.29.00 crs) at BWR BBB-/ Stable and  also the ratings for their short term bank loan facilities for Rs.11.00 Crs (enhanced from Rs.9.00 Crs) at BWR A3, (aggregate rated amount enhanced to Rs.52.36 Crs from Rs. 38.00 Crs). The reaffirmation in the rating factors in the experienced management, favourable financial parameters and diversified client base. However, the ratings are constrained by the Low profitability, with susceptibility to raw material price fluctuations, supplier concentration risk, as well as the Competitive and fragmented nature of the wire industry. The outlook has been retained at Stable as BWR believes that the business risk profile of the Company will be maintained over the medium term. The Stable outlook indicates a low likelihood of a rating change over the medium term. The rating outlook may be revised to Positive in case of significant improvement in its topline and its credit metrics, or to Negative if there is any substantial decrease in the operating income or deterioration in the financial parameters and delay in debt servicing. 

For arriving at the ratings, Brickwork Ratings has relied upon the Audited Financial statements of FY21, key financial figures 9MFY22, projections for FY22 and FY23, as well as information / clarifications provided by the company and its bankers.

 

KEY RATING DRIVERS

Credit Strengths:


Credit Risks:

ANALYTICAL APPROACH - Standalone

Standalone

RATING SENSITIVITIES

Positive triggers – The ratings could be upgraded if the company demonstrates a sustained improvement in its revenues, operating profit margin, while maintaining healthy coverage metrics.

Negative triggers – The downward pressure on rating could arise in case of a material decline in the revenues and profitability of the company leading to adverse impact on the debt coverage metrics.

LIQUIDITY INDICATORS - Adequate

Liquidity is adequate, as characterized by EBITDA of Rs.4.70 Crs.in FY21 (Rs.4.76 Crs for FY20) which was sufficient to cover the interest and finance charges of Rs.1.90 Crs (Rs.2.38 Crs for FY20). Net cash accruals was Rs.2.73 Crs for FY21 as against Net cash accruals of Rs.2.70 Crs in FY20. Current ratio was 1.59 times in FY21 (FY20: 1.71 times). ISCR was 2.47 times in FY21 as compared to ISCR of 2.00 times in FY20. The average utilization of WC limits from SBI and BOI in the past 6 months is at around 70% and 85% respectively as confirmed by the bankers. The company has also availed GECL aggregating to Rs.7.86 Crs from its lenders to meet its operational liabilities. Future cash accruals are expected to be sufficient to cover the debt obligations arising out of these loans.

ABOUT THE ENTITY

Khaitan Winding Wire Private Limited (KWWPL) was incorporated on 22/2/1989 with its registered office at P-38, India Exchange Place, Kolkata. It is into the manufacture of enamelled winding wire made of copper. In 2014-15, the company established a new aluminium plant and diversified into manufacturing of  aluminium wires.T he manufacturing plant is located in Jalan Complex, Argori, Howrah (West Bengal). The Company was promoted by Sri Ajit Kumar Khaitan and Sri Pradeep Kumar Khaitan

 

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 20-21
(Audited)
FY 19-20
(Audited)
Operating Revenue Rs.Crs. 129.13 122.36
EBITDA Rs.Crs. 4.70 4.76
PAT Rs.Crs. 1.37 1.27
Tangible Net Worth Rs.Crs. 30.05 28.68
Total Debt/Tangible Net Worth Times 1.03 0.68
Current Ratio Times 1.59 1.71
KEY COVENANTS OF THE FACILITY RATED

Usual covenants for bank loan facilities.


STATUS OF NON-COOPERATION WITH PREVIOUS CRA

ACUITE has moved the rating of KWWPL to “Issuer Not Cooperating’’ category with a rating of ACUITE BB/A4+ on 8/10/20, due to non submission of information.

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 41.36
BWR BBB-/Stable
(Reaffirmation)
10Feb2021
BWR BBB- Stable
(Reaffirmation)
NA
NA
19Dec2019
BWR BBB- Stable
(Reaffirmation)
Non Fund Based ST 11.00
BWR A3
(Reaffirmation)
10Feb2021
BWR A3
(Reaffirmation)
NA
NA
19Dec2019
BWR A3
(Reaffirmation)
Grand Total 52.36 (Rupees Fifty Two Crores and Thirty Six 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.

Analytical Contacts

Ambar Kumar Chauhan

Ratings Analyst ambarkumar.c@brickworkratings.com

Anuradha Gupta

Director - Ratings anuradha.g@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Khaitan Winding Wire 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 Standard Chartered Bank Term LoanSanctioned 2.50 _ 2.50
2 Standard Chartered Bank Cash CreditSanctioned 8.50 _ 8.50
3 Standard Chartered Bank Bank GuaranteeSanctioned _ 6.00 6.00
4 Standard Chartered Bank Letter of CreditSanctioned _ 5.00 5.00
5 Standard Chartered Bank Covid -19 Emergency Line CreditSanctioned 1.70 _ 1.70
6 Standard Chartered Bank GECLSanctioned 0.85 _ 0.85
7 State Bank Of India (SBI) GECLSanctioned 2.11 _ 2.11
8 State Bank Of India (SBI) GECLSanctioned 3.20 _ 3.20
9 State Bank Of India (SBI) Letter of CreditSanctioned _ _ 0.00
10 State Bank Of India (SBI) Cash CreditSanctioned 22.50 _ 22.50
Total 41.36 11.00 52.36
TOTAL (Rupees Fifty Two Crores and Thirty Six 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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