Asian Aqua Feeds and Chemicals

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.6.50 Crs. of Asian Aqua Feeds and Chemicals

Particulars

Facility**	Amount (Rs.Crs)	Tenure	Rating*
Fund Based
Open Cash Credit / Cash Credit (Hypothecation/Pledge) - Sanctioned	06.50	Long Term	BWR B + (Stable)
Sub Total	06.50
Grand Total	06.50	(Rupees Six Crores and Fifty lakhs Only)

*Please refer to BWR website www.brickworkratings.com for definition of the ratings
**Details of Bank facilities are provided in Annexure-I RATING ACTION / OUTLOOK : Stable

BWR believes that Asian Aqua Feeds and Chemicals business risk profile will be maintained over the medium term. the 'Stable' outlook indicates a low likelihood of rating change over the medium term. The rating outlook may be revised to 'Positive' in case the revenues and profit show sustained improvement. The rating outlook may be revisd to 'Negative' if the revenues go down and profit margins show lower than expected figures.

KEY RATING DRIVERS

Credit Strengths:

• Locational Advantage :

  The company/Firm is located in Nellore cluster and thus has a competitive advantage in terms of skilled labor, logistics, production knowledge and vendors making the company more efficient and cost effective.

• Debt Protection Metrics :

  DSCR and ISCR of the company stand at 6.94 and 6.94 respectively in FY indicating company’s adequacy to meet its debt obligations.

• Experience Experience :

  Partners are having experience of more than 2 decades indicating the experienced management.

Credit Risks:

• Competition in the Industry :

  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.

• Company’s Existence :

  The company has pursued its business for only couple of years.

• Networth :

  Low net worth of the company resulting in high gearing.

ANALYTICAL APPROACH AND APPLICABLE RATING CRITERIA

For ariving 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).

PROFILE

The firm M/S Asian Aqua feeds and chemicals has been established in the year 2014 but started operations from dec2017. The firm deals with the retail sale of aqua feeds and chemicals. The managing partner of the firm Mr. Nagareddy Sreedhar reddy is engaged in same activity for the past 10years. The other three partners Mr. Kamireddy suresh, kamireddy sravanthi and Nagareddy padmaja are helping in day to day activities of the firm.

KEY FINANCIAL INDICATORS

Key Parameters	Units	FY 17-18	FY 16-17
Operating Revenue	Rs.Crs.	18.73	0.00
EBITDA	Rs.Crs.	0.21	0.00
PAT	Rs.Crs.	0.18	0.00
Tangible Net Worth	Rs.Crs.	2.23	0.00
Total Debt/Tangible Net Worth	Times	2.22	0.00
Current Ratio	Times	1.41	0.00

RATING HISTORY (INCLUDING WITHDRAWAL AND SUSPENSION)

S.No	Current Rating (2019)				Rating History
	Facilities	Tenure	Amount (Rs.Crs)	Rating	2018	2017	2016
Fund Based
1	Open Cash Credit / Cash Credit (Hypothecation/Pledge) - Sanctioned	Long Term	6.50	BWR B+ (Pronounced as BWR Single B plus) (Outlook: Stable)	NA	NA	NA
Total			06.50	(Rupees Six Crores and Fifty lakhs Only)

COMPLEXITY LEVELS OF THE INSTRUMENTS

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.

For More Information Contact:

Analytical Contacts	Investor Contacts
Rasmita Mishra Ratings Analyst B : +91 023310161 rasmita.m@brickworkratings.com	Liena Thakur Assistant Vice President - Corporate Communications M : +91 84339 94686 liena.t@brickworkratings.com
Nagaraj KS Associate Director - Ratings B : +91 80 4040 9940 nagaraj.ks@brickworkratings.com
1-860-425-2742

SL.No.	Type Of Facilities	Long Term(Rs.Crs.)	Short Term(Rs.Crs.)	Total(Rs.Crs.)
1	Open Cash Credit / Cash Credit (Hypothecation/Pledge) - Sanctioned	6.50	_	6.50
Total				6.50
TOTAL (Rupees Six Crores and Fifty lakhs Only)