RATING RATIONALE
18Apr2023

Uflex Ltd.

Brickwork Ratings downgrades and simultaneously withdraws the ratings for the Bank Loan Facilities of Rs.440.00Crs. of Uflex Ltd.

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(27 Feb 2023)
Present
Fund Based 440.00 440.00 Long Term BWR AA- /Rating Watch with Negative Implications
-
BWR A + /Negative
Downgrade/Withdrawal
Grand Total 440.00 440.00 (Rupees Four Hundred Forty Crores 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- The company has given part mandate to BWR for sanctioned TL only

RATING ACTION / OUTLOOK

On 27 February 2023, Brickwork Ratings (BWR) had placed the existing long term ratings of BWR AA- of Uflex Ltd (UL or ‘the Company’) for the Bank Loan Facilities aggregating Rs.440 Crores (INR Four Hundred Forty Crore Only) on Rating Watch with Negative Implications on account of pending implications of raid/search conducted by the Income Tax Department (ITD) across various locations/offices of the Group from 21 Feb 2023 to 27 Feb 2023. Now, the company has taken up with BWR for withdrawal of its existing rating along with No Objection Certificates (NOCs) from the concerned lenders as required for withdrawal of ratings.

Accordingly, based on the best available information at the time of withdrawal, BWR has downgraded the long term ratings for the bank loan facilities aggregating Rs.440 Crores of Uflex Ltd., to BWR A+, and has simultaneously withdrawn the same with immediate effect. The withdrawal of the rating is based on the company’s request for withdrawal vide letter dated 20 February, 2023 and pursuant to receiving No Objection Certificates (NOCs) from all the concerned lenders on 29 March, 2023. The withdrawal of ratings is in line with BWR's policy for withdrawal of ratings on bank loan facilities, and the relevant documents are held on record. 

Further, BWR has resolved the Rating Watch with Negative Implications and revised the outlook to negative as BWR will not be in a position to continue monitoring the ratings including the impact on the credit risk profile due to the Income Tax (IT) raid developments on the Group. 

The current rating action factors in overall financial performance during 9MFY23 (nine months period ended December 2022), stretched bottom lines on consolidated basis and limited available information for review at the time of withdrawal of ratings. During 9MFY23, on consolidated basis, the operating and net margins of the Group has moderated to 12.29% and 4.27% respectively vis a vis 16.44% and 8.10% respectively during the same period last year (9MFY22). 

ABOUT THE ENTITY

Promoted and founded in 1985 by Mr. Ashok Chaturvedi, a first generation entrepreneur, is having its Corporate Office located at Noida, UP. It was previously known as Flex Industries. Another Group Company Flex Packaging was merged into Flex Industries to form the now known Uflex Limited.It is engaged in providing end-to-end flexible packaging solutions to customers viz. packaging design & colour scheme, packaging structure, packaging products (value added anti-counterfeiting solutions to prevent look alike from eroding the brand equity. The company has effectively utilised backward and forward integration to hold a strong market position.

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

NA

ANY OTHER INFORMATION

NA

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)
Facilities Current Rating  (2023) 2023 (History) 2022 2021 2020
Type Tenure Amount
(Rs.Crs.)
Rating Date Rating Date Rating Date Rating Date Rating
Fund Based LT 440.00
BWR A+/Negative
(Downgrade/Withdrawal)
27Feb2023
BWR AA- Rating Watch with Negative Implications
(-)
05Apr2022
BWR AA- Stable
(Assignment)
NA
NA
NA
NA
Grand Total 440.00 (Rupees Four Hundred Forty Crores Only)
*** Note- The company has given part mandate to BWR for sanctioned TL 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.

Hyperlink/Reference to applicable Criteria
Analytical Contacts

Akanksha

Senior Rating Analyst akanksha@brickworkratings.com

Ravi Rashmi Dhar

Associate Director - Ratings ravi.d@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Uflex 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 Bank of Bahrain and Kuwait Term LoanSanctioned 50.00 _ 50.00
2 Indian Overseas Bank Term LoanSanctioned 100.00 _ 100.00
3 Punjab National Bank Term LoanSanctioned 290.00 _ 290.00
Total 440.00 0.00 440.00
TOTAL (Rupees Four Hundred Forty Crores Only)
* Note- The company has given part mandate to BWR for sanctioned TL only

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