Versil Pumps LLP

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.18.00 Crs. of Versil Pumps LLP

Particulars

Facility**	Amount (Rs.Crs)	Tenure	Rating*
Fund Based
Term Loan - Sanctioned Cash Credit - Sanctioned Term Loan - Proposed Cash Credit - Proposed	05.45 02.50 07.55 02.50	Long Term	BWR B + (Stable)
Sub Total	18.00
Grand Total	18.00	(Rupees Eighteen Crores 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 has principally relied upon the management certified financials upto 9 months FY20, projected financials upto March 2025, publicly available information and information & clarifications provided by management.

The rating draws comfort from the group's track record, experienced management and the ability of the partners to bring additional capital as per business requirement. However, the rating continues to remain constrained due to competitive nature of business, nascent stage of operation and working capital intensive operation.

BWR believes that Versil Pumps LLP business risk profile will be maintained over the medium term. The 'Stable' outlook indicates a low likelihood of rating change over the medium term. 

KEY RATING DRIVERS

Credit Risk:

• Competitive nature of business: Entry barriers in the industry are low on account of low differentiation in the end product leading to intense competition and limiting the pricing power resulting in low profitability.

• Nascent stage of operations: Since the company was incorporated in 2018, it has a limited track record.

Credit Strength: 

• Experienced partners and group support:   All the partners of the firm are having an extensive experience in pump, motor and casting industry. It also has strong group support from various group entities.

ANALYTICAL APPROACH AND APPLICABLE RATING CRITERIA

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

Positive:

• Healthy improvement in its scale of operations while managing its working capital requirement.
• Improvement in debt protection metrics.

Negative:

• Decline in scale of operations or delay in execution of outstanding orders or further weakening of liquidity position.
• Deterioration of debt protection metrics.

LIQUIDITY POSITION

Liquidity position: Stretched

Liquidity position of Versil Pumps LLP is stretched as evident from low net cash accrual of Rs. 0.21 crs. till Dec 19 and stretched working capital cycle. Current ratio of the firm was 1.70 times as on 31st Dec, 2019.

PROFILE

The Business entity was incorporated in Nov 2018 at Rajkot, Gujarat Versil Pumps LLP is engaged in manufacturing of self priming pumps, submersible pumps and solar pumps. It is an ISO 9001:2015 certified firm. The manufacturing plant is located at Dholara, Rajkot, with an installed capacity of 300,000 self priming pumps, 120,000 submersible pumps and 36,000 solar controllers per annum. Mr. Shailesh Bedia, Mr. Mansukh Bedia and Mr. Arvind bedia are the Designated Partners of the firm and have extensive experience in pumps, motor and casting industry.

KEY FINANCIAL INDICATORS

Key Parameters	Units	FY 18-19	FY 17-18
Operating Revenue	Rs.Crs.	0.00	0.00
EBITDA	Rs.Crs.	0.00	0.00
PAT	Rs.Crs.	0.00	0.00
Tangible Net Worth	Rs.Crs.	6.85	0.00
Total Debt/Tangible Net Worth	Times	0.12	0.00
Current Ratio	Times	1.88	0.00

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 Cash Credit - Sanctioned Term Loan - Proposed Cash Credit - Proposed	Long Term	05.45 02.50 07.55 02.50	BWR B+ (Stable)	NA	NA	NA
Total			18.00	(Rupees Eighteen Crores 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.

Hyperlink/Reference to applicable Criteria :

• General Criteria
• Approach to Financial Ratios
• Approach to Financial Ratios

For More Information Contact:

Analytical Contacts	Investor Contacts
Siddharth Shah Lead Analyst siddharth.s@brickworkratings.com	Liena Thakur Assistant Vice President - Corporate Communications M : +91 84339 94686 liena.t@brickworkratings.com
Dileep Narayan Singh dileep.s@brickworkratings.com
1-860-425-2742

SL.No.	Type Of Facilities	Long Term(Rs.Crs.)	Short Term(Rs.Crs.)	Total(Rs.Crs.)
1	Term Loan - Sanctioned	5.45	_	5.45
2	Cash Credit - Sanctioned	2.50	_	2.50
3	Term Loan - Proposed	7.55	_	7.55
4	Cash Credit - Proposed	2.50	_	2.50
Total				18.00
TOTAL (Rupees Eighteen Crores Only)