RATING RATIONALE
06 Jul 2020
Udream Technolab Pvt. Ltd.
Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.5.50 Crs. of Udream Technolab Pvt. Ltd.
Particulars| Facility** | Amount (Rs.Crs) | Tenure | Rating* |
|---|---|---|---|
| Non-Fund Based | |||
| Bank Guarantee Sanctioned | 05.50 | Short Term | BWR A4 |
| Sub Total | 05.50 | ||
| Grand Total | 05.50 | (Rupees Five Crores and Fifty lakhs Only) | |
**Details of Bank facilities are provided in Annexure-I RATING ACTION / OUTLOOK :
BWR has assigned the short term rating of BWR A4 for bank loan facilities of Udream Technolab Pvt. Ltd.
KEY RATING DRIVERS
BWR has essentially relied upon the audited financial statements of Udream Technolab Pvt. Ltd. of FY17, FY18, FY19 , provisional financial statements of FY20 and projected financial statements of FY21, publicly available information and information/clarifications provided by the entity’s management. The rating draws strength from the vast business experience of the director/s and financial closure. However, the rating is constrained by the project execution risk.
Going forward, the ability of the entity to achieve projected revenue & profitability margins and manage liquidity would be key rating sensitivities.
Credit Strengths:
- Management experience :
The promoters have an experience of over 2 decades in electricity distribution and panel manufacturing industry. The parent company of Udream Technolab Pvt.Ltd ie.Akanksha Power and Infrastructure Pvt. Ltd (APIPL)has executed several projects which has enabled it to establish relationships with suppliers and key customer North Orissa Electricity Supply Company (NESCO).
- Financial Closure :
The financial closure of the project has been completed from the Central bank of India.
- Reputed Clientele :
The work order is being executed for the Housing & Urban Development Department of the Odisha government which is a government body.
Credit Risks:
- Work Order Execution Risk :
Udream Technolab Pvt. Ltd do not have any fixed assets as per the Balance Sheet as they will sublet the contract to APIPL and get the entire work done from the group company APIPL. The work order execution risk is inherent until the completion of the contract order.
- Financial Profile :
The work order began in Nov 2019 which is expected to be completed by March 2021 hence there was no revenue booked in FY20.The share capital in FY20 stood at Rs 0.01 Cr and Unsecured loans at Rs 0.94 Cr. The TNW is negative at Rs 0.34 Cr . The gearing as per the FY20 provisionals stood at -2.80x which is expected to improve to 0.16x in FY21 with a revenue of Rs 48.36 Cr and PAT of Rs 6.04Cr.
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 execute its work order on time and achieve its projected revenue in FY21 will be the key sensitivities.
Positive: The ratings may be upgraded with improvement in scale of operations, profit margins, and tangible net worth.
Negative: The ratings may be downgraded in case the company does not achieve its projected revenue.
LIQUIDITY POSITION
Liquidity : Weak
The liquidity profile is weak as per the FY20 Provisional financials as the cash and cash equivalents is NIL and are projected to Rs 2.47 Cr in FY21. The firm does not have any sanctioned fund based cash credit facility. The company has a current investment in the form of a fixed deposit of Rs 1.25 Cr but the same are lien marked by the lender as primary security.
PROFILE
Udream Technolab Pvt Ltd is an SPV of Akanksha Power and Infrastructure Pvt. Ltd(APIPL).which was incorporated in 2016. The SPV received an order for Rs 55.00 Cr in May 2019 from Odisha Housing & Urban Development for supply & installation of equipment and operation & maintenance for the next 7 years.They are required to furnish a BG (Rs 5.5 Cr) equivalent to of 10% of the contract value of Rs 55 Crs. They have been sanctioned BG limit of Rs 5.5 Cr in May 2019 from the Central bank of India(Nashik city).
KEY FINANCIAL INDICATORS| Key Parameters | Units |
FY 18-19 (Audited) |
FY 17-18 (Audited) |
|---|---|---|---|
| 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. | 0.00 | 0.00 |
| Total Debt/Tangible Net Worth | Times | 0.00 | 0.00 |
| Current Ratio | Times | 0.61 | 0.00 |
RATING HISTORY (INCLUDING WITHDRAWAL AND SUSPENSION)
| S.No | Current Rating (2020) | Rating History | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Facilities | Tenure | Amount (Rs.Crs) | Rating | 2019 | 2018 | 2017 | ||||
| Non-Fund Based | ||||||||||
| 1 | Bank Guarantee - Sanctioned | Short Term | 05.50 | BWR A4 | NA | NA | NA | |||
| Total | 05.50 | (Rupees Five Crores and Fifty 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 |
|---|---|
|
Nagesh K Ratings Analyst B : 202267456 Ext : 619 nagesh.k@brickworkratings.com |
Liena Thakur Assistant Vice President - Corporate Communications M : +91 84339 94686 liena.t@brickworkratings.com |
|
Sushil Kumar Chitkara Associate Director - Ratings B : +91 22 2831 1426, +91 22 2831 1439 sushilkumar.c@brickworkratings.com |
|
| 1-860-425-2742 | |
| SL.No. | Type Of Facilities | Long Term(Rs.Crs.) | Short Term(Rs.Crs.) | Total(Rs.Crs.) |
|---|---|---|---|---|
| 1 | Bank GuaranteeSanctioned | _ | 5.50 | 5.50 |
| Total | 5.50 | |||
| TOTAL (Rupees Five Crores and Fifty 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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