RATING RATIONALE
25Apr2022

Sri Shiridi Sairam Rice Mill

Brickwork Ratings revises the ratings for the Bank Loan Facilities of Rs. 12.88 Crs. of Sri Shiridi Sairam Rice Mill

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(08 Apr 2021)
Present
Fund Based 9.86 11.88 Long Term BWR BB- /Stable
Reaffirmed
BWR D
Downgrade
Non Fund Based 1.00 1.00 Short Term BWR A4
Reaffirmed
BWR D
Downgrade
Grand Total 10.86 12.88 (Rupees Twelve Crores and Eighty Eight 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 essentially relied upon the audited financials up to FY21, 10MFY22 provisional financials of FY22, projected financials up to FY24, publicly available information and information/clarifications provided by the firm's management.

Brickwork Ratings (BWR) downgrades the long term and short term rating to BWR D for the bank loan facilities of Sri Shiridi Sairam Rice Mill. The downgrade to BWR D is on account of a delay in debt servicing obligations.

KEY RATING DRIVERS

Credit Strengths:


Credit Risks:

RATING SENSITIVITIES

Upward - Sustained improvement in scale of operations with improved profitability margins, capital structure and timely debt servicing. Specific credit metrics that could lead to an upgrade of the firm's rating include (1) Total Debt/Partners capital below 1.00 times on a continuous basis, (2) DSCR and ISCR greater than 3.0 times on a continuous basis.

LIQUIDITY INDICATORS - Stretched

The liquidity position of the firm is stressed as its observed delays in the accounts and the account was moved to SMA I category, as on 18 April 2022. Inadequate net cash accruals of Rs.0.41 Crs and Rs.0.43 Crs against the CPLTD of Rs.1.04 Crs and Rs.0.94 Crs in FY23 and FY24 respectively. Though, its current ratio as on March 31, 2021 is moderate at 1.41 times and the average working capital utilization for the last 12 months is 51%. 

ABOUT THE ENTITY

Sri Shiridi Sai Ram Rice mill was established in September 2013 as a partnership firm located at Vedurumudi, East Godavari District, & Andhra Pradesh. The firm is engaged in the processing of paddy into rice. The main products are Rice and by-products are Boiled Rice, Raw Rice, Broken Rice , and Husk. The firm also has the brand names “SSS” and “Double bull” “Double Peacock ”and new quality of rice Swarna 1061,1010,1001. The main Product is Rice and the products are Boiled Rice, Raw Rice, Broken Rice, and Husk. The firm produces three qualities of rice – Levi (FCI) quality, Sona Rice, and for export quality rice Swarna 1010, 1061, and 1001 quality. 
 
Mr. Surya Rao is the Managing partner and holding management interest in other entities
 
Mr. Krishna Murthy, Mr. Rama Krishna Murthy, Mr. Satyanarayana Chowdary, Mr. Meher Baba, Mr. Narayana Rao & Mr. Satyanarayana other partners of the firm.

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 20-21
(Audited)
FY 19-20
(Audited)
Operating Revenue Rs.Crs. 48.24 42.47
EBITDA Rs.Crs. 1.37 1.55
PAT Rs.Crs. 0.04 0.04
Tangible Net Worth Rs.Crs. 3.87 3.83
Total Debt/Tangible Net Worth Times 3.23 3.08
Current Ratio Times 1.41 1.18

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 11.88
BWR D
(Downgrade)
08Apr2021
BWR BB- Stable
(Reaffirmed)
13Feb2020
BWR BB- Stable
(Reaffirmation)
30Mar2019
BWR BB- Stable
(Upgrade)
Non Fund Based ST 1.00
BWR D
(Downgrade)
08Apr2021
BWR A4
(Reaffirmed)
13Feb2020
BWR A4
(Reaffirmed)
30Mar2019
BWR A4
(Reaffirmed)
Grand Total 12.88 (Rupees Twelve Crores and Eighty Eight lakhs Only)
COMPLEXITY LEVELS OF THE INSTRUMENTS - NA

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

Prashanth Boorala

Ratings Analyst Board : +91 40 2331 0161 / 2331 0071 prashanth.b@brickworkratings.com

Nagaraj K

Associate Director - Ratings Board : +91 80 4040 9940 nagaraj.ks@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Sri Shiridi Sairam Rice Mill
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 Indian Bank Term LoanOut-standing 0.01 _ 0.01
2 Indian Bank Term LoanOut-standing 0.09 _ 0.09
3 Indian Bank Cash CreditSanctioned 9.50 _ 9.50
4 Indian Bank Bank GuaranteeSanctioned _ 1.00 1.00
5 Indian Bank GECLOut-standing 2.28 _ 2.28
Total 11.88 1.00 12.88
TOTAL (Rupees Twelve Crores and Eighty Eight lakhs Only)
Print and Digital Media

The Rating Rationale is sent to you for the sole purpose of dissemination through your print, digital or electronic media. While it may be used by you acknowledging credit to BWR, please do not change the wordings in the rationale to avoid conveying a meaning different from what was intended by BWR. BWR alone has the sole right of sharing (both direct and indirect) its rationales for consideration or otherwise through any print or electronic or digital media.

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.

Disclaimer

Brickwork Ratings India Pvt. Ltd. (BWR), a Securities and Exchange Board of India [SEBI] registered Credit Rating Agency and accredited by the Reserve Bank of India [RBI], offers credit ratings of Bank Loan facilities, 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. [ hereafter referred to as "Instruments"]. BWR also rates NGOs, Educational Institutions, Hospitals, Real Estate Developers, Urban Local Bodies and Municipal Corporations.

BWR wishes to inform all persons who may come across Rating Rationales and Rating Reports provided by BWR that the ratings assigned by BWR are based on information obtained from the issuer of the instrument and other reliable sources, which in BWR"s best judgment are considered reliable. The Rating Rationale / Rating Report & other rating communications are intended for the jurisdiction of India only. The reports should not be the sole or primary basis for any investment decision within the meaning of any law or regulation (including the laws and regulations applicable in Europe and also the USA).

BWR also wishes to inform that access or use of the said documents does not create a client relationship between the user and BWR.

The ratings assigned by BWR are only an expression of BWR"s opinion on the entity / instrument and should not in any manner be construed as being a recommendation to either, purchase, hold or sell the instrument.

BWR also wishes to abundantly clarify that these ratings are not to be considered as an investment advice in any jurisdiction nor are they to be used as a basis for or as an alternative to independent financial advice and judgment obtained from the user"s financial advisors. BWR shall not be liable to any losses incurred by the users of these Rating Rationales, Rating Reports or its contents. BWR reserves the right to vary, modify, suspend or withdraw the ratings at any time without assigning reasons for the same.

BWR"s ratings reflect BWR"s opinion on the day the ratings are published and are not reflective of factual circumstances that may have arisen on a later date. BWR is not obliged to update its opinion based on any public notification, in any form or format although BWR may disseminate its opinion and analysis when deemed fit.

Neither BWR nor its affiliates, third party providers, as well as the directors, officers, shareholders, employees or agents (collectively, "BWR Party") guarantee the accuracy, completeness or adequacy of the Ratings, and no BWR Party shall have any liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of any part of the Rating Rationales or Rating Reports. Each BWR Party disclaims all express or implied warranties, including, but not limited to, any warranties of merchantability, suitability or fitness for a particular purpose or use. In no event shall any BWR Party be liable to any one for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of any part of the Rating Rationales and/or Rating Reports even if advised of the possibility of such damages. However, BWR or its associates may have other commercial transactions with the company/entity. BWR and its affiliates do not act as a fiduciary.

BWR keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of the respective activity. As a result, certain business units of BWR may have information that is not available to other BWR business units. BWR has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process.

BWR clarifies that it may have been paid a fee by the issuers or underwriters of the instruments, facilities, securities etc., or from obligors. BWR"s public ratings and analysis are made available on its web site, www.brickworkratings.com. More detailed information may be provided for a fee. BWR"s rating criteria are also generally made available without charge on BWR"s website.

This disclaimer forms an integral part of the Ratings Rationales / Rating Reports or other press releases, advisories, communications issued by BWR and circulation of the ratings without this disclaimer is prohibited.

BWR is bound by the Code of Conduct for Credit Rating Agencies issued by the Securities and Exchange Board of India and is governed by the applicable regulations issued by the Securities and Exchange Board of India as amended from time to time.