Brickwork Ratings reaffirms the long term ratings for the Bank Loan Facilities of Rs. 23.49 Crs. of Kashipur Infrastructure and Freight Terminal Pvt. Ltd.
ParticularsFacilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
---|---|---|---|---|---|
Previous | Present | Previous (26 Mar 2022) |
Present | ||
Fund Based | 32.50 | 23.49 | Long Term |
BWR BB+/Stable
Reaffirmation |
BWR BB +
/Stable Reaffirmation |
Grand Total | 32.50 | 23.49 | (Rupees Twenty Three Crores and Forty Nine lakhs Only) |
BWR has reaffirmed the Long Term rating at BWR BB+ (Stable) for the bank loan facilities of Kashipur Infrastructure and Freight Terminal Pvt. Ltd. (KIFTPL).
BWR has principally relied upon audited financial results up to FY22, projected financials for FY23 & FY24, publicly available information and information/clarifications provided by the management of the firm and their representatives. While assigning the rating, BWR has factored the strategic support from KIFTPL's JV parents (IGL & ALS), location advantage of the terminal coupled with growing EXIM trade industry in India aiding the business of KIFTPL.
KEY RATING DRIVERSCredit Strengths:
Both ALS and IGL exhibit strong operational and strategic linkages with KIFTPL. ALS is a logistics service provider that supplements KIFTPL’s operations at the logistics facility, while IGL (public listed company) provides cargos to KIFTPL’s facility, which is strategically located next to IGL’s flagship production plant. .
KIFTPL is at a comfortable position in term of its locational advantage with plenty of sugar and paper mills in the Kashipur district which will aid the operations of the business in cargo handling service, warehousing or custom clearance services. Moreover, with the economy reviving and the EXIM business starting to reach the pre covid-19 levels, the cargo volumes are expected to rise amid stronger macroeconomic fundamentals and e-commerce push in India. Also, the recent 'Dedicated Freight Corridor' initiative by the government and increased double stacking volume will support higher operating efficiencies, which is likely to support EBITDA margins in FY22-FY23 of the ICDs/CFS players.
Total operating income of the company increased by 36.04%, thereby increasing the top line from Rs. 20.25 Crs in FY21 (Audited) to Rs. 27.55 Crs. in FY22(Audited). The net worth of the company has improved from Rs. 63.01 Crs. in FY21 (Audited) to Rs. 66.84 Crs. in FY22 (Audited). Gearing Ratio (Total Debt/TNW) has improved from 0.46X in FY21 (Audited) to 0.31X in FY22 (Audited).
KIFTPL has been relying on the support by its JV parents for its debt servicing/interest servicing/operational support. The promoting companies are infusing funds for any mismatch in the company as and when it occurs. BWR expects the credit profile to improve on account of improvement in the operations of the company that might reduce the reliance of support from its JV parents.
Entry barriers in the industry are low on account of limited capital and technology requirement and also low differentiation in the end product leading to intense competition and limiting the pricing power resulting in low profitability
For arriving at its ratings, BWR has applied its rating methodology as detailed in the Rating Criteria detailed below (hyperlinks provided at the end of this rationale).
RATING SENSITIVITIES
Positive : Developments that could lead to a positive rating action include significant improvement in overall financial and operational profile of KIFTPL and also its JV parents. With significant improvement in scale of the business coupled with adequate debt repayment capacity might be favorable for a positive rating action. Low reliance on the JV parents for operational and financial support would also be positive for KIFTPL.
Negative : The rating may be downgraded if there is deterioration in the financial profile led by a drop in the revenue from the FY20 level, rise in equity infusion by the JV parents or declining cash generation from operations. The rating might also be downgraded if there is a significant deterioration in the financial profile of KIFTPL's JV parents.
LIQUIDITY INDICATORS - Adequate
Kashipur Infrastructure & Freight Terminal Pvt. Ltd. (KIFTPL) was incorporated in 2012 as a joint Venture between India Glycol Limited (IGL) and Apollo Logisolutions Limited (ALS). The operations were started in April, 2017 in Kashipur district, Uttarakhand as a Private Freight Terminal cum inland Container Depot (ICD) with services offered like cargo handling (dry/liquid), container handling, storage, warehousing and custom clearance for its EXIM and domestic trade clients. Among the JV parents, IGL holds 42.3% of shareholding and ALS holds 51% of shareholding in KIFTPL as on 31st March 2020.
KEY FINANCIAL INDICATORS (Standalone)Key Parameters | Units |
FY 21-22 (Audited) |
FY 20-21 (Audited) |
---|---|---|---|
Operating Revenue | Rs.Crs. | 27.55 | 20.25 |
EBITDA | Rs.Crs. | 10.98 | 8.78 |
PAT | Rs.Crs. | 3.76 | 1.70 |
Tangible Net Worth | Rs.Crs. | 66.84 | 63.01 |
Total Debt/TNW | Times | 0.31 | 0.46 |
Current Ratio | Times | 0.33 | 0.40 |
NA
NA
RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)Facilities | Current Rating (2022) | 2022 (History) | 2021 | 2020 | 2019 | ||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Type | Tenure | Amount (Rs.Crs.) |
Rating | Date | Rating | Date | Rating | Date | Rating | Date | Rating |
Fund Based | LT | 23.49 |
BWR BB+/Stable
(Reaffirmation) |
26Mar2022 |
BWR BB+Stable
(Reaffirmation) |
05Apr2021 |
BWR BB+Stable
(Assignment) |
NA |
NA
|
NA |
NA
|
Grand Total | 23.49 | (Rupees Twenty Three Crores and Forty Nine lakhs Only) |
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 CriteriaAnalytical Contacts | |
---|---|
Ashish Kumar Ratings Analyst ashish.k@brickworkratings.com |
Hari Kishan Yadav Associate Director - Ratings hari.ky@brickworkratings.com |
1-860-425-2742 | media@brickworkratings.com |
SL.No. | Name of the Bank/Lender | Type Of Facilities | Long Term(Rs.Crs.) | Short Term(Rs.Crs.) | Total(Rs.Crs.) | |
---|---|---|---|---|---|---|
1 | IndusInd Bank | Term Loan | 18.49 | _ | 18.49 | |
2 | IndusInd Bank | GECL | _ | _ | 0.00 | |
3 | IndusInd Bank | Working Capital (CC)Sanctioned | 5.00 | _ | 5.00 | |
Total | 23.49 | 0.00 | 23.49 | |||
TOTAL (Rupees Twenty Three Crores and Forty Nine lakhs Only) |
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