RATING RATIONALE
23Sep2022

Vasista Marine

Brickwork Ratings revises the ratings for the Bank Loan Facilities of Rs. 62.20 Crs. of Vasista Marine

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(28 Jun 2021)
Present
Fund Based 48.00 61.20 Long Term BWR BB /Negative
Downgrade
BWR D
Downgrade
(30.00) (30.00)
(5.00) (5.00)
(8.00) (8.00)
Non Fund Based 1.00 1.00 Short Term BWR A4
Downgrade
BWR D
Downgrade
Grand Total 49.00 62.20 (Rupees Sixty Two Crores and Twenty 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, provisional financials of FY22, projected financials up to FY25, publicly available information, and information/clarifications provided by the firm's management.

The rating downgrades factors of stretched liquidity position, declined/improved scale of operations and remains at moderate, low debt service metrics and profitability margins, intense competition, susceptibility of profitability to volatility in raw material prices, susceptibility of profitability to volatility in shrimp prices and intense competition, and the working capital-intensive nature of operations. However, the ratings are supported by the experienced promoter, moderate debt service capital structure, and locational advantages.

KEY RATING DRIVERS

Credit Strengths:


Credit Risks:

ANALYTICAL APPROACH - Standalone

BWR has applied its rating methodology as detailed at the end of the document. BWR has adopted a standalone approach for arriving at its ratings.

RATING SENSITIVITIES

Positive:
Increase in scale of operations and profitability on a sustained basis
Improvement in the liquidity position.
Prudent working capital management and timely recovery of receivables
Specific credit metrics that could lead to an upgrade of the firm’s rating include (1) Total Debt/Partner’s capital below 1 time on a sustained basis, (2) ISCR and DSCR greater than 3.00 times on a sustained basis.
 

LIQUIDITY INDICATORS - Stretched

The liquidity is stretched as reflected by delays in the accounts, deteriorated cash conversion cycle, low debt service coverage metrics and the working capital utilization was ~100% in the past 12 months, as 30 Aug ended, 2022. The cash conversion cycle was at 138 days and 127 days as on 31 Mar 2021 and as on 31 Mar 2022 prov respectively, an account of higher inventory days. Though the current ratio as on March 31, 2021, and Mar 31 2022 prov. is moderate at 1.33 times and 1.59 times respectively and the net cash accruals sufficiently covered debt repayments in FY21 and FY22 provisional and the trend is expected to continue in FY23, FY24, and FY25 projections also.
 

ABOUT THE ENTITY

Vasista Marine was established in December 2003 as a partnership firm by Mr. N Srinivasa Raju and Mrs. N Krishna Veni. The Firm’s registered office is located at Bhimavaram, West Godavari, Andhra Pradesh. It is engaged in processing and export of frozen Vannamei Shrimps, Hatchery business, and trading of Aqua Feed. The Firm provides shrimp processing services to other entities. The Firm operates through a leased Shrimp processing unit from Laila Nutraceuticals, with an installed capacity of 30 MT per day. The firm majorly exports to the USA, China, Vietnam and etc. through the local ports of Vizag, Chennai, Kakinada, Krishnapatnam and etc. 
Krishnapatnam, Kattupalli
 
Mr. N Srinivasa Raju and Mrs. N Krishna Veni are the Managing Partner and Partners of the Firm.

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 20-21
(Audited)
FY 19-20
(Audited)
Operating Revenue Rs.Crs. 140.69 154.40
EBITDA Rs.Crs. 7.40 6.61
PAT Rs.Crs. 1.78 2.45
Tangible Net Worth Rs.Crs. 17.53 16.11
Total Debt/TNW Times 3.82 3.61
Current Ratio Times 1.33 1.46

NON-COOPERATION WITH PREVIOUS CREDIT RATING AGENCY

India Ratings & Research has reaffirmed the ratings of IND BB/Stable/A4+ and continues to the Issuer Not Cooperating Category on 5th October 2018 for the bank loan facilities of Rs.41.00 Crs of Vasita Marine.
 

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 61.20
BWR D
(Downgrade)
28Jun2021
BWR BB Negative
(Downgrade)
05Mar2020
BWR BB+ Negative
(Reaffirmation)
NA
NA
FB SubLimit LT (30.00)
BWR D
(Downgrade)
28Jun2021
BWR BBNegative
(Downgrade)
05Mar2020
BWR BB+ Negative
(Reaffirmation)
NA
NA
(5.00)
BWR D
(Downgrade)
28Jun2021
BWR BBNegative
(Downgrade)
05Mar2020
BWR BB+ Negative
(Reaffirmation)
NA
NA
(8.00)
BWR D
(Downgrade)
28Jun2021
BWR BBNegative
(Downgrade)
05Mar2020
BWR BB+ Negative
(Reaffirmation)
NA
NA
Non Fund Based ST 1.00
BWR D
(Downgrade)
28Jun2021
BWR A4
(Downgrade)
05Mar2020
BWR A4+
(Reaffirmation)
NA
NA
Grand Total 62.20 (Rupees Sixty Two Crores and Twenty lakhs Only)
Rating Advisory, as on 01Jul2022
Press Release, as on 01Jul2022
Issued an advisory

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

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
Vasista Marine
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 Canara Bank PC/PCFC/FDB/BRD/FBESanctioned 40.00 _ 40.00
Sub-Limit (FDB/FBE/BRD) Sanctioned (8.00)
Sub-Limit (PC) Sanctioned (30.00)
Sub-Limit (PCFC) Sanctioned (5.00)
2 Canara Bank GECLOut-standing 13.20 _ 13.20
3 Canara Bank Standby PC/PCFC/FDB/FBE/BRDSanctioned 8.00 _ 8.00
4 Canara Bank Standby Letter of CreditSanctioned _ 1.00 1.00
Total 61.20 1.00 62.20
TOTAL (Rupees Sixty Two Crores and Twenty lakhs Only)
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About Brickwork Ratings

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