RATING RATIONALE
08Feb2022

Aries Agro Ltd.

Brickwork Ratings reaffirms and simultaneously withdraws the ratings for the Bank Loan Facilities of Rs.163.36 crs. of Aries Agro Ltd.

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(08 Feb 2021)
Present
Fund Based 136.16 136.16 Long Term BWR BBB /Stable
Reaffirmation
BWR BBB /Stable
Reaffirmation/Withdrawal
Non Fund Based 27.20 27.20 Short Term BWR A3+
Reaffirmation
BWR A3 +
Reaffirmation/Withdrawal
Grand Total 163.36 163.36 (Rupees One Hundred Sixty Three Crores and Thirty Six 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

Brickwork Ratings (BWR) has reaffirmed the long-term rating to BWR BBB (Stable) and short-term rating to BWR A3+ to the bank loan facilities of Aries Agro Ltd (AAL or the company) and simultaneously withdrawn it with immediate effect. The issuer has requested via mail dated 17th January, 2022 to withdraw the rating and submitted No Objection Certificate (NOC) from all the bankers.

Reaffirmation of ratings factors in the improved financial performance of the company in FY21 and H1FY22, coupled with continued strength such as company’s experienced promoters, established long track record of over five decades with a demonstrated execution capability, diversified product portfolio with wide spread distribution network and comfortable financial risk profile. However, these strengths are partially offset by the working capital intensive nature of operations with an elongated operating cycle and inherent risk associated with agricultural sector along with intense competition.

BWR has principally relied upon the consolidated audited financial results of AAL upto 31st March 2021, H1FY22 unaudited financials and publicly available information.

Credit Strength

Credit Risks

ABOUT THE ENTITY

Aries Agro Limited (AAL) was founded in 1969 by the Mirchandani family, having more than four decades of experience in agrochemical business. The promoter group holds 52.66% equity stake in the company as on December 31, 2021. It is primarily engaged in manufacturing and sale of nutrients including micronutrients, speciality fertilisers, secondary nutrients and water soluble NPK fertilizers for plants in India and abroad. It is listed on both Bombay Stock Exchange (BSE)and National Stock Exchange (NSE). They have 4 manufacturing units in India with a capacity of 95,400 MT per annum which are located in Mumbai, Hyderabad, Chhatral & Lucknow. It is an ISO certified company. They have 85 brands which are successfully tested at over 100 research institutions in India and abroad.

NON-COOPERATION WITH PREVIOUS CREDIT RATING AGENCY

NIL

ANY OTHER INFORMATION

Key Financial Indicators (Consolidated)

Particular     Unit
 
     FY19     FY20     FY 21
Result Type     Audited    Audited    Audited
Total Operating Income Rs. Cr      265.32      296.14     381.47
OPBDIT Rs. Cr        43.76        42.28       58.89
PAT Rs.Cr          7.70          7.80       16.40
Tangible Net Worth Rs. Cr      212.58      202.82      217.41
Total Debt/TNW Times          0.81          0.74          0.63
Current Ratio Times          1.47          1.42          1.45

 

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 136.16
BWR BBB/Stable
(Reaffirmation/Withdrawal)
08Feb2021
BWR BBB Stable
(Reaffirmation)
03Feb2020
BWR BBB Stable
(Assignment)
NA
NA
Non Fund Based LT NA
NA
08Feb2021
BWR
()
03Feb2020
BWR
()
NA
NA
Non Fund Based ST 27.20
BWR A3+
(Reaffirmation/Withdrawal)
08Feb2021
BWR A3+
(Reaffirmation)
03Feb2020
BWR A3+
(Assignment)
NA
NA
Grand Total 163.36 (Rupees One Hundred Sixty Three Crores and Thirty Six 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.

Analytical Contacts

Akanksha

Ratings Analyst akanksha@brickworkratings.com

Tanu Sharma

Director - Ratings tanusharma@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Aries Agro 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 Axis Bank Ltd. Cash Credit 46.00 _ 46.00
2 Axis Bank Ltd. Letter of Credit _ 2.00 2.00
3 Bandhan Bank Cash Credit 10.00 _ 10.00
4 Canara Bank Term Loan 2.86 _ 2.86
5 Canara Bank Cash Credit 47.80 _ 47.80
6 Canara Bank Letter of Credit _ 5.20 5.20
7 Canara Bank Covid -19 Emergency Line Credit 2.50 _ 2.50
8 HDFC Bank Cash Credit 7.00 _ 7.00
9 HDFC Bank Letter of Credit _ 20.00 20.00
10 HDFC Bank Working Capital Demand Loan 14.00 _ 14.00
11 ICICI Bank Cash Credit 6.00 _ 6.00
Total 136.16 27.20 163.36
TOTAL (Rupees One Hundred Sixty Three Crores and Thirty Six lakhs Only)
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