RATING RATIONALE
04Jan2024

Vishal Fabrics Ltd

Brickwork Ratings downgrades the long-term and short-term ratings and withdraws the ratings for the Bank Loan Facilities of Rs. 196.84 Crs. of Vishal Fabrics Ltd

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(29 Dec 2022)
Present
Fund Based 345.81 172.84 Long Term BWR A- /Rating Watch with Developing Implications
Reaffirmation
BWR BBB + /Stable
Downgrade/Withdrawal
Non Fund Based 26.00 24.00 Short Term BWR A2+ /Rating Watch with Developing Implications
Reaffirmation
BWR A2
Downgrade/Withdrawal
Grand Total 371.81 196.84 (Rupees One Hundred Ninety Six Crores and Eighty Four 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

Based on the client request for withdrawal, No Objection Certificate from the all the Consortium Lender Banks and No Due Certificate from the Punjab National Bank and DBS Bank India Ltd on account of all Loans closed and as per the BWR rating withdrawal policy, the rating is proposed to downgraded to "BWR BBB+/Stable" and "BWR A2" and simultaneously withdraw. The proposed withdrawal is in Compliance with BWR's Operating Withdrawal Policy.

The company has complied with BWR Withdrawal policy by submitting all the relevant documents required for reviewing and withdrawing the rating. However, due to the following reasons the ratings are downgraded :

1)  The Financials of the company in FY 2022-23 are almost same as they have achieved in FY 2021-22, there is only minor changes in different parameters, the financials of H1FY24 of the company have deteriorated slightly when compared to the financials of H1FY23.

2) The management has confirmed that the Group has not received any communication from the Income Tax Department. As per the LODR regulations, the company shall promptly inform the stock exchanges of any further updates in this regard. Nevertheless, Brickwork understands that this is a material event and the outcome remains uncertain and needs to be monitored closely.

Resolution of Rating Watch - BWR had placed the ratings under Rating Watch with developing implications on 29 December 2022, due to the Income Tax search from 20 July 2022 to 25 July 2022 on Chiripal Group. The Rating team had sent email on 02-Nov-2023 to know the current status of the Income Tax search, for which the client has replied via email dated 03-November-2023 stating that during the Income Tax search the company has cooperated with the Income Tax Authorities and provided all the information and documents sort for, however till date they have not received any information from Income Tax Department. 

In annual report FY23, the auditor made the following remark : The Income Tax Department conducted a Search activity under section 132 of the Income Tax Act on the company in July 2022. Subsequently, the company has provided all support and cooperation and given the necessary documents and data to the department, as requested by the Department. The Company is examining and reviewing the details of the matter and will take appropriate actions, including addressing regulatory actions, if and when they occur.

ABOUT THE ENTITY
Macro Economic Indicator Sector Industry Basic Industry
Consumer Discretionary Textiles Textiles & Apparels Other Textile Products

Incorporated in 1985, Vishal Fabrics Limited (“VFL” or “Company”) is a part of the Ahmedabad based Chiripal Group (“Chiripal” or “Group”). It is primarily engaged in the business of dyeing, printing and processing of fabrics of its own and also on a job work basis. The Company procures mainly gray fabric and dyes, prints and finishes the same as per the client’s requirements. The processing unit of the Company is based in Narol, Ahmedabad (Gujarat) with an installed capacity of 1200 lakh mtr/annum. The company has started its processing unit way back in 1985 and successfully running its process house for more than three decades. VFL has entered into denim processing business by setting up of 8 units in Dholi Integrated Spinning Park (DISP) situated at Dholi near Ahmedabad having the capacity of 800 lakh mtr/annum. Currently the installation capacity of VFL has increased to 900 lakh mtr/annum due to addition of 1 more denim lines in FY23.

NON-COOPERATION WITH PREVIOUS CREDIT RATING AGENCY

No outstanding non-cooperation ratings with other Credit Rating agencies.

ANY OTHER INFORMATION

Nil.

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)
Facilities Current Rating  (2024) 2023 2022 2021
Type Tenure Amount
(Rs.Crs.)
Rating Date Rating Date Rating Date Rating
Fund Based LT 172.84
BWR BBB+/Stable
(Downgrade/Withdrawal)
NA
NA
02Aug2022
BWR A- Rating Watch with Developing Implications
(Reaffirmation)
04Aug2021
BWR A- Stable
(Reaffirmation)
Non Fund Based ST 24.00
BWR A2
(Downgrade/Withdrawal)
NA
NA
02Aug2022
BWR A2+ Rating Watch with Developing Implications
(Reaffirmation)
04Aug2021
BWR A2+
(Reaffirmation)
Grand Total 196.84 (Rupees One Hundred Ninety Six Crores and Eighty Four lakhs 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

R Sriranjani

Rating Analyst sriranjani.r@brickworkratings.com

RamaKrishna

Director - Ratings ramakrishna@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Vishal Fabrics 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 Bandhan Bank Cash CreditSanctioned 25.00 _ 25.00
2 Bandhan Bank Letter of CreditSanctioned _ 5.00 5.00
3 Bandhan Bank Emergency Credit Line Guarantee Scheme (ECLGS)Sanctioned 1.17 _ 1.17
4 Bandhan Bank GECL 2.0Sanctioned _ _ 0.00
5 Bank of Baroda GECL 2.0Sanctioned _ _ 0.00
6 Bank of Baroda Emergency Credit Line Guarantee Scheme (ECLGS)Sanctioned 8.00 _ 8.00
7 Bank of Baroda Letter of CreditSanctioned _ 7.00 7.00
8 Bank of Baroda Term LoanOut-standing _ _ 0.00
9 Bank of Baroda Cash CreditSanctioned 40.00 _ 40.00
10 Bank of Maharashtra Cash CreditSanctioned 40.00 _ 40.00
11 Bank of Maharashtra Term LoanOut-standing _ _ 0.00
12 Bank of Maharashtra Letter of CreditSanctioned _ 7.00 7.00
13 Bank of Maharashtra Emergency Credit Line Guarantee Scheme (ECLGS)Sanctioned 8.46 _ 8.46
14 Bank of Maharashtra GECL 2.0Sanctioned _ _ 0.00
15 DBS Bank India Limited Term LoanProposed _ _ 0.00
16 Punjab National Bank Term LoanOut-standing _ _ 0.00
17 Punjab National Bank Cash CreditSanctioned _ _ 0.00
18 Punjab National Bank Letter of CreditSanctioned _ _ 0.00
19 Punjab National Bank Emergency Credit Line Guarantee Scheme (ECLGS)Sanctioned _ _ 0.00
20 Punjab National Bank GECL 2.0Sanctioned _ _ 0.00
21 South Indian Bank GECL 2.0Sanctioned _ _ 0.00
22 South Indian Bank Emergency Credit Line Guarantee Scheme (ECLGS)Sanctioned 2.35 _ 2.35
23 South Indian Bank Letter of CreditSanctioned _ 1.00 1.00
24 South Indian Bank Cash CreditSanctioned 20.00 _ 20.00
25 State Bank Of India (SBI) Term LoanOut-standing _ _ 0.00
26 State Bank Of India (SBI) Emergency Credit Line Guarantee Scheme (ECLGS)Sanctioned 4.00 _ 4.00
27 Union Bank of India GECL 2.0Sanctioned _ _ 0.00
28 Union Bank of India Cash CreditSanctioned 21.00 _ 21.00
29 Union Bank of India Emergency Credit Line Guarantee Scheme (ECLGS)Sanctioned 2.86 _ 2.86
30 Union Bank of India Letter of CreditSanctioned _ 4.00 4.00
Total 172.84 24.00 196.84
TOTAL (Rupees One Hundred Ninety Six Crores and Eighty Four lakhs Only)
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