RATING RATIONALE
21 Apr 2020
Apollo Animal Medical Group Trust
Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.13.00 Crs. of Apollo Animal Medical Group Trust
Particulars| Facilities** | Amount(Rs.Crs) | Tenure | Rating* |
|---|---|---|---|
| Fund Based | 8.00 | Long Term |
BWR B (Pronounced as BWR Single B ) (Outlook: Stable) |
| Non-Fund Based | 5.00 | Short Term |
BWR A4 (Pronounced as BWR A Four ) |
| Total | 13.00 | (Rupees Thirteen Crores Only) | |
**Details of Bank facilities are provided in Annexure-I RATING ACTION / OUTLOOK : Stable
BWR assigns the rating of BWR B with 'Stable' outlook for the long term bank loan facilities and BWR A4 for the Short term bank loan Facilities of Apollo Animal Medical Group Trust. The ratings take into consideration the rich experience of the trustees, along with average financial risk profile. The ratings are however constrained by small scale of operations with weak liquidity position and regulatory risk in education sector.
KEY RATING DRIVERS
Credit Strengths:
- Experienced trustee with experience of more than two decades in education field :
The trustees have experience of more than two decades in education field and they also work with many NGOs to promote education.
- Average Financial Risk Profile :
The trust has low gearing level with TOL/TNW of 0.64 Times, and moderate Debt Service Indicators with Interest Service Coverage Ratio of 4.80 Times and Debt Service Coverage Ratio of 4.48 Times in FY19 (Audited).
Credit Risks:
- Small Scale of Operations along with weak liquidity position :
The trust has small scale of operations with total operating income of Rs 10.25 crores in FY19, It has improved as compared to previous year of Rs 4.07 crores but it still remain at small level. The trust also has weak liquidity position with low current ratio of 0.41 times in FY19 (Audited).
- Regulatory risk in education sector :
The education sector is highly regulated by the government. Any changes in existing regulatory framework/ environment may adversely affect the operations of the Trust. There will be always risk associated if college is not able to fulfill the conditions recommended by Veterinary Council of India and it will lead to cancellation of college license also. There is also no future arrangements for the placement of students as still the first batch has to complete the full course.
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 trust to Improve their scale of operations, along with their improvement in current ratio would be key rating sensitives.
Positive: The ratings may be upgraded in the future if the Company is able to significantly improve their scale of operations, and current ratio.
Negative: The ratings may be downgraded if any further deterioration in the Financial Risk Profile of trust and if college is not able to fulfill the conditions recommended by Veterinary council of India will also be a key rating sensitive.
LIQUIDITY POSITION
Stretched
1. The Trust has nil associate concern or subsidiary concern and there is no operational linkages between them.
2. The Trust has Fixed deposits from Bank of Rs 2.30 crores and Cash & Bank Balances of Rs 0.25 crores in FY19.
3. The Trust has average utilization of 70% of their O.D Limit from Punjab National Bank from last six months
4. The Trust has Long term borrowings of Rs 1.05 crores out of which unsecured loan from Friends & Relatives of Rs 0.67 crores and a car loan from Kotak Mahindra Bank of Rs 0.38 crores in FY19.
5. The Trust has Interest service coverage ratio of 4.80 times and Debt Service Coverage Ratio of 4.48 times in FY19.
6. The Trust has current ratio of 0.41 Times in FY19 (Audited).
Apollo Animal Medical Group Trust was established in 2002, Jaipur and registered under Rajasthan Public Trust Act, 1959. The trust is running a single college with the name of Apollo College of Veterinary Medicine (ACVM) Jaipur, Rajasthan which was established on 6th October 2003, ACVM offers Bachelor Degree (BV.S.C & A.H) course of Five and Half years duration in Veterinary Science & Animal Husbandry which comprise of 4 and half years course and 1 year compulsory internship. (The 4th year comprises of 1 and half year whereas rest 3 year is for one year only) The college is located at Agra Road, Jaipur. Initially the trust was Earlier being run by Dr Sohan Singh Rathore, Dr Srinivasan Ramanathan and Dr Raj Ishwar Khare (Trustees). In 2013, Trust Management has been take over by Mr Dulhe Ram Meena, Mr Yashwardhan Meena, Mr Lakhan Meena. In nascent stage the trust has got temporary affiliation from Veterinary Council of India from AY 2004 to AY- 2015 as they are not able to fulfill the conditions recommended by the Veterinary. During FY16 the rules changed & it didn’t get the license to run the college as per standard regulation every medical college should have own medical hospital too which AAMGT didn’t have. Thus it posted no income in FY17. In Year 2017, the Central govt on recommendation of the Veterinary Council of India, New Delhi has granted permission for admission BVSC & AH and Rajasthan University of Veterinary & Animal Sciences (RAJUVAS), Bikaner has granted Affiliation. However during FY18, AAMGT completed the construction of its medical hospital and it has again got the license to run the course. As from February 2019, College has got permission for all the four and half years and compulsory internship. The admissions for 4th year will start from August 2020. The college has three storey building is available for teaching, research and extension education with clinical, paraclinical and production science departments. On each floor of building there are five wings, each one is housing an independent departments with sitting rooms, research labs, store and office accomodations. Five lecture halls are spacious to accomodate 100 students each and provided with audio visual aids. Mr Dulhe Ram Meena Working Trustee has rich experience of more than 25 years in Army Field and Other business, Mr Yashwardhan Meena has experience of more than 10 years in Education Field.
KEY FINANCIAL INDICATORS| Key Parameters | Units |
FY 18-19 (Audited) |
FY 17-18 (Audited) |
|---|---|---|---|
| Operating Revenue | Rs.Crs. | 10.25 | 4.07 |
| EBITDA | Rs.Crs. | 4.01 | 1.96 |
| PAT | Rs.Crs. | 3.27 | 0.88 |
| Tangible Net Worth | Rs.Crs. | 13.95 | 10.68 |
| Total Debt/Tangible Net Worth | Times | 0.53 | 0.82 |
| Current Ratio | Times | 0.41 | 0.33 |
NON-COOPERATION WITH PREVIOUS RATING AGENCY ,IF ANY
| CRA Name | Date | Amount | Rating |
|---|---|---|---|
| CARE | 26 Sep 2019 | 13.00 | CARE B/A4 |
| S.No | Current Rating (2020) | Rating History | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Facilities | Tenure | Amount (Rs.Crs) | Rating | 2019 | 2018 | 2017 | ||||
| 1 | Fund Based | Long Term | 8.00 | BWR B(Pronounced as BWR Single B )(Outlook: Stable) | NA | NA | NA | |||
| 2 | Non-Fund Based | Short Term | 5.00 | BWR A4(Pronounced as BWR A Four ) | NA | NA | NA | |||
| Total | 13.00 | (Rupees Thirteen Crores 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.
For More Information Contact:| Analytical Contacts | Investor Contacts |
|---|---|
|
Aman Sharma Ratings Analyst B : +91 172 5032 295 / 6 aman.s@brickworkratings.com |
Liena Thakur Assistant Vice President - Corporate Communications M : +91 84339 94686 liena.t@brickworkratings.com |
|
V.K.Kukreja Associate Director - Ratings B : +91 11 2341 2232 kukreja.vk@brickworkratings.com |
|
| 1-860-425-2742 | |
| SL.No. | Name of the Bank | Long Term(Rs.Crs) | Short Term(Rs.Crs) | Total(Rs.Crs) | |
|---|---|---|---|---|---|
| CC | TL | ||||
| 1 | PNB | 8 | 0 | 5 | 13 |
| TOTAL (Rupees Thirteen Crores Only) | 8 | 0 | 5 | 13 | |
| 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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