Ask Pharma India Pvt. Ltd.

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.4.75 Crs. of Ask Pharma India Pvt. Ltd.

Particulars

Facility**	Amount (Rs.Crs)	Tenure	Rating*
Fund Based
Term Loan - Proposed Term Loan - Proposed Cash Credit - Proposed	01.40 01.85 01.50	Long Term	BWR B (Stable)
Sub Total	04.75
Grand Total	04.75	(Rupees Four Crores and Seventy Five lakhs Only)

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

BWR believes that Ask Pharma India Pvt. Ltd. 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 revised to 'Negative' if the revenues go down and profit margins show lower than expected figures.

KEY RATING DRIVERS

Credit Strengths:

• Locational Advantage :

  The unit is located in an existing pharmaceutical Industrial Estate in the very central location of Hyderabad’s Industrial Area (IDA) Jeedimetla. This location is the Pharma hub with giant facilities like Dr. Reddy Laboratories, Hetero drugs and Virco Labs located next door in the same industrial Estate and the company has proper transportation facilities etc with abundant trained labour forces.

• Management Experience :

  The directors of the company are highly experienced in the bulk drug industry. Also, the company have the advantage of technical experience of Dr. AVGS Prasad and Dr. P. Srinivas, having almost an experience of three decades. The technical director of the company is Mr. Ramkrishna Tota, has a 25 years experience in multi-locational and multi-product Pharmaceutical Industry, with a complete knowledge in eCGMP compliance.

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.

• Exposure to Regulatory Risk :

  The pharmaceutical industry is highly regulated and requires various approvals, licenses, registrations and permissions for business activities. Each authority has its own requirement and their could be delay or refusal to grant approval. The approval process for a new product registration is complex, lengthy and expensive and the time taken to obtain approval varies by country but generally it takes from six months to several years from the date of application which increases the fixed cost.

• Project Execution Risk :

  The company is expected to commence its operations from 1st Jan 2021, but if it faces any delays it would be exposed to risk of time and cost overrun.

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

The ability of the company to complete the project as per the estimated cost and projected time along with timely commencement of operations and achievement of projected revenue and margins will be the key rating sensitivity.

PROFILE

Incorporated business entitiy in 2016 at Hyderabad, Telangana, Ask Pharma (India) Private Limited is incorporated with the objective of manufacturing of all Pharmaceutical Bulk drug intermediaries viz. Antibiotics, zoles, etc. The company has purchased a Pharma Manufacturing Unit viz, N.R.R. Laboratories Private Limited situated at Jeedimetla, Hyderabad and entered into a sale agreement on 03-03-2020. Mr K. Hanumantha Rao the Managing Director,has to his credit more than 20 years’ in general and more than 10 years of experience in marketing of bulk drug intermediates.

KEY FINANCIAL INDICATORS

Key Parameters	Units	FY 18-19 (Audited)	FY 17-18 (Audited)
Operating Revenue	Rs.Crs.	0.03	0.04
EBITDA	Rs.Crs.	0.00	-0.01
PAT	Rs.Crs.	0.00	-0.01
Tangible Net Worth	Rs.Crs.	0.99	0.00
Total Debt/Tangible Net Worth	Times	0.24	7.74
Current Ratio	Times	2460.61	1.10

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 - Proposed Term Loan - Proposed Cash Credit - Proposed	Long Term	01.40 01.85 01.50	BWR B (Stable)	NA	NA	NA
Total			04.75	(Rupees Four Crores and Seventy Five 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
Parth Modi Lead Analyst parth.m@brickworkratings.com	Liena Thakur Assistant Vice President - Corporate Communications M : +91 84339 94686 liena.t@brickworkratings.com
K Nagaraj 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	Term Loan - Proposed	1.40	_	1.40
2	Term Loan - Proposed	1.85	_	1.85
3	Cash Credit - Proposed	1.50	_	1.50
Total				4.75
TOTAL (Rupees Four Crores and Seventy Five lakhs Only)

Note: Proposed