RATING RATIONALE
04 Mar 2020
Impex India (Partnership)
Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.7.93 Crs. of Impex India (Partnership)
Particulars| Facility** | Amount (Rs.Crs) | Tenure | Rating* |
|---|---|---|---|
| Fund Based | |||
| Term Loan Sanctioned | 07.93 | Long Term | BWR D |
| Sub Total | 07.93 | ||
| Grand Total | 07.93 | (Rupees Seven Crores and Ninety Three lakhs Only) | |
**Details of Bank facilities are provided in Annexure-I RATING ACTION / OUTLOOK :
Brickwork Ratings has assigned the rating of M/s Impex India for Bank loan facilities as BWR D. The rating reflects delays by the firm, in servicing its debt obligation on account of liquidity crunch. The rating also takes into account the management experience and revenue visibility with long-term PPA.
KEY RATING DRIVERS
Credit Strengths:
-
Management experience :
M/s Impex India is managed by partners Mr. Rajendra Mimani and Mr. Ashish Mimani. Mr. Rajendra Mimani has 47 years of business experience in the power sector (T&D). Mr. Ashish Mimani has over 12 years Business experience, specializing in operations. He has been handling power segment businesses on EPC basis for last 5 years.
-
Revenue visibility with long-term power purchase agreement :
The firm has entered into a power purchase agreement with state-owned power distribution company UPCL for 25 years, for the entire installed capacity of its plant at Haridwar. Payment security mechanism in the form of Letter of Credit by the UPCL mitigates the risk to some extent. Term loan installments are serviced through ESCROW account maintained with the lender.
Credit Risks:
-
Delays in servicing debt repayments :
There are delays of few days in the monthly repayment of term loan installments, due to delays in payment received from UPCL. However, the account is classified as standard.
-
Debt protection metrics :
Debt protection metrics are weak with DSCR ratio of 0.82x and ISCR of 1.22x for FY19. DSCR below 1.00 indicates the inability of the firm to repay its debt obligations.
-
Variance in cash flows due to fluctuation in solar irradiance :
The solar spectral irradiance is a measure of the brightness of the entire Sun at a wavelength of light. Performance of Solar power plant is susceptible to fluctuations in solar irradiance levels, which may directly impact the cash flows of the firm.
For arriving 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).
RATING SENSITIVITIES
Going forward the ability of the company to improve overall financial risk profile of the company backed by profitability margins, debt coverage indicators, timely repayment of debt would be key rating sensitivities.
Positive: Better operating margins along with an improvement in the overall credit metrics marked by improved coverage ratios and better liquidity management will be positive for the ratings.
LIQUIDITY POSITION
Stretched: The company’s liquidity position remains stretched with low cash accruals against current portion of long term debt. Net cash accruals in FY19 was Rs. 0.34 Crs and CPLTD as on 31.03.2018 was Rs. 0.65 Crs.
PROFILEM/s Impex India, a partnership firm established in 2015, is engaged in power generation through its Solar PV power plant in Haridwar having installed capacity of 2.40 MW. Mr Rajendra Mimani, Ms. Saroj Mimani and Mr Ashish Mimani are partners with equal profit sharing. The firm has a long term power purchase agreement with state-owned power distribution company UPCL.
KEY FINANCIAL INDICATORS| Key Parameters | Units |
FY 18-19 (Audited) |
FY 17-18 (Audited) |
|---|---|---|---|
| Operating Revenue | Rs.Crs. | 1.99 | 1.45 |
| EBITDA | Rs.Crs. | 1.33 | 1.20 |
| PAT | Rs.Crs. | -2.09 | -3.10 |
| Tangible Net Worth | Rs.Crs. | -5.64 | -3.54 |
| Total Debt/Tangible Net Worth | Times | -1.94 | -3.11 |
| Current Ratio | Times | 2.07 | 1.73 |
NA
RATING HISTORY (INCLUDING WITHDRAWAL AND SUSPENSION)
| S.No | Current Rating (2020) | Rating History | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Facilities | Tenure | Amount (Rs.Crs) | Rating | 2019 | 2018 | 2017 | ||||
| Fund Based | ||||||||||
| 1 | Term Loan - Sanctioned | Long Term | 07.93 | BWR D | NA | NA | NA | |||
| Total | 07.93 | (Rupees Seven Crores and Ninety Three lakhs Only) | ||||||||
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 : For More Information Contact:| Analytical Contacts | Investor Contacts |
|---|---|
|
Gaurav Jain Ratings Analyst B : +91 11 2341 2232 Ext : 111 gaurav.j@brickworkratings.com |
Liena Thakur Assistant Vice President - Corporate Communications M : +91 84339 94686 liena.t@brickworkratings.com |
|
Satvinder Kumar Gakhar Associate Director - Ratings B : +91 11 2341 2232 satvinder.g@brickworkratings.com |
|
| 1-860-425-2742 | |
| SL.No. | Type Of Facilities | Long Term(Rs.Crs.) | Short Term(Rs.Crs.) | Total(Rs.Crs.) |
|---|---|---|---|---|
| 1 | Term LoanSanctioned | 7.93 | _ | 7.93 |
| Total | 7.93 | |||
| TOTAL (Rupees Seven Crores and Ninety Three lakhs Only) | ||||
| Instrument | Issue Date | Amount (Rs.Crs) | Coupon Rate | Maturity Date | ISIN Particulars |
|---|---|---|---|---|---|
| NA | NA | NA | NA | NA | NA |
| Name of Entity | % Ownership | Extent of consolidation | Rationale for consolidation |
|---|---|---|---|
| NA | NA | NA | NA |
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