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term ratings for the bank loan facilities aggregating Rs.440 Crores of Uflex Ltd., to BWR A+, and has simultaneously withdrawn the same with immediate effect.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.

NON-COOPERATION WITH PREVIOUS CREDIT RATING AGENCY

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

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 12,000 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.