RATING RATIONALE
02Jun2023

Jay Shree Tea & Industries Ltd.

Brickwork Ratings downgrades the ratings for the Bank Loan Facilities of Rs. 287.00 Crs. of Jay Shree Tea & Industries Ltd. and migrates the ratings to the Issuer Not Cooperating category, based on best available information, as the issuer did not cooperate.

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(05 Mar 2022)
Present
Fund Based 262.00 247.00 Long Term BWR BBB- /Stable
Reaffirmation and change in Outlook
BWR BB + /Stable
ISSUER NOT COOPERATING* /Downgrade
Non Fund Based 40.00 40.00 Short Term BWR A3
Reaffirmation and change in Outlook
BWR A4 +
ISSUER NOT COOPERATING* /Downgrade
Grand Total 302.00 287.00 (Rupees Two Hundred Eighty Seven Crores Only)
#Please refer to BWR website www.brickworkratings.com for definition of the ratings
**Details of Bank Loan facilities,consolidation or instruments are provided in Annexure
*Issuer did not cooperate; based on best available information.


RATING ACTION / OUTLOOK / NATURE OF NON-COOPERATION

Brickwork Ratings has downgraded the long-term rating to BWR BB+/Stable and short-term rating to BWR A4+ for bank loan facilities aggregating Rs.287 crores of Jay Shree Tea & Industries Ltd with simultaneous migration of the ratings to the “ISSUER NOT COOPERATING” category, based on best available information as the Issuer did not cooperate.

The ratings were due for a review in March,2023. BWR has been seeking information from the entity so as to review and monitor its performance, in response to which the entity’s management has informed BWR that they would like to withdraw the ratings. However, despite requests, necessary documents for withdrawal have not yet been provided.

Further, the company has not been submitting the monthly "No Default Statement" (NDS) as required by regulatory guidelines. Further, despite our requests, the bankers have also not provided any feedback except the State Bank of India which has provided satisfactory feedback on the conduct of the account of the company. Accordingly, the current rating action has been taken by BWR basis best available information on the issuers' performance, and in accordance with extant regulatory guidelines.

Due to the lack of management cooperation and the absence of adequate information / documents, BWR was unable either to withdraw the ratings or to assess the company's financial performance and its ability to service its debts and maintain a valid rating. Hence, BWR has downgraded the ratings and has simultaneously migrated the ratings to the ISSUER NOT COOPERATING* category, based on best available information as the issuer did not cooperate. Such non - cooperation by a rated entity may be a result of deterioration in its credit risk profile.

The ratings have taken into account the financial information about the company as available in the public domain.

LIMITATIONS OF THE RATING

Information availability risk is a key factor in the assessment of credit risk as generally, non cooperation by the rated entities to provide the required information for a review of the assigned rating may also be accompanied by financial stress. Users of the credit ratings should therefore take into account the possible deterioration in the credit quality of the rated entity arising from its non-transparency and withholding of information required for a review of the rating.

ABOUT THE ENTITY

Incorporated in October 1945, Jay Shree Tea & Industries Ltd. is a part of the diversified conglomerate of B.K Birla Group. The Company is controlled by  Mrs. Jayashree Mohta, elder daughter of late Mr. BK Birla. The company is engaged in the manufacturing of tea and chemicals & fertilizers.  It is the third-largest tea producer in the world & 2nd the largest tea producer in India. The tea produced by Jayshree’s estates has consistently commanded a premium over the district average because of quality. Besides Tea, it is also involved in the Chemicals and Fertilizers, Sugar, Real Estate, and Education sectors through its subsidiaries.  JTIL had three Indian subsidiaries (Majhaulia Sugar & Industries Limited, North Tukvar Tea Company Limited, and Jayantika Investment and Finance Limited ) and one foreign subsidiary (Birla Holdings Limited). At present, the Sugar unit under MSIPL has a crushing capacity of 5,000 TCD. The company also has a co-generation plant of 6 MW capacity for captive consumption. In May 2019, MSIPL has also commenced a distillery, with an ethanol production capacity of 60 KLPD. Sugarcane is an agricultural product and renewable source of energy. From sugarcane, the company produces Sugar, Alcohol, Ethanol, Power, and Bio Compost. The Board of Directors of Jay Shree Tea & Industries Ltd and Majhaulia Sugar Industries Private Ltd have considered and approved the scheme of amalgamation of both the companies. The Company has received NCLT order for the amalgamation of Jayshree Tea & Industries Limited (JTIL) & Erst. Majhaulia Sugar Industrious Private Limited (MSIPL) in Q3FY22. (the effective date of amalgamation: 01/04/2020). 

KEY FINANCIAL INDICATORS

Please refer to the following link for the previous detailed rationale that captures the Key Financials Drivers and their Description, Liquidity Position. Rating Sensitivities, Key Financial Indicators. View Previous Document

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

NA

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)
Facilities Current Rating  (2023) 2022 2021 2020
Type Tenure Amount
(Rs.Crs.)
Rating Date Rating Date Rating Date Rating
Fund Based LT 247.00
BWR BB+/Stable
(ISSUER NOT COOPERATING* /Downgrade)
05Mar2022
BWR BBB- Stable
(Reaffirmation and change in Outlook)
12Jan2021
BWR BBB- Stable
(Reaffirmation)
10Dec2020
BWR BBB- Stable
(Assignment)
0.00
NA
NA
NA
16Jul2021
BWR BBB- Credit Watch with Developing Implications
(Reaffirmation and change in Outlook)
NA
NA
Non Fund Based ST 40.00
BWR A4+
(ISSUER NOT COOPERATING* /Downgrade)
05Mar2022
BWR A3
(Reaffirmation and change in Outlook)
12Jan2021
BWR A3
(Reaffirmation)
10Dec2020
BWR A3
(Assignment)
0.00
NA
NA
NA
16Jul2021
BWR A3Credit Watch with Developing Implications
(Reaffirmation and change in Outlook)
NA
NA
Grand Total 287.00 (Rupees Two Hundred Eighty Seven Crores Only)
COMPLEXITY LEVELS OF THE INSTRUMENTS - Simple

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
Analytical Contacts

Anitha More

Rating Analyst anithamore@brickworkratings.com

Anuradha Gupta

Director - Ratings anuradha.g@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Jay Shree Tea & Industries Ltd.
ANNEXURE-I
Details of Bank Facilities rated by BWR
SL.No. Name of the Bank/Lender Type Of Facilities Long Term(Rs.Crs.) Short Term(Rs.Crs.) Total(Rs.Crs.)
1 Axis Bank Ltd. EPC/ PCFC/ FBP/ PSFCSanctioned _ _ 0.00
2 DCB Bank EPC/ PCFC/ FBP/ PSFCSanctioned 35.00 _ 35.00
3 DCB Bank Letter of Credit (Inland/Import) / Buyers CreditSanctioned _ 6.00 6.00
4 HDFC Bank Letter of Credit (Inland/Import) / Buyers CreditSanctioned _ 25.00 25.00
5 HDFC Bank EPC/ PCFC/ FBP/ PSFCSanctioned 59.00 _ 59.00
6 HDFC Bank Bank GuaranteeSanctioned _ 2.00 2.00
7 ICICI Bank Term LoanSanctioned 36.20 _ 36.20
8 ICICI Bank Letter of CreditSanctioned _ 5.00 5.00
9 ICICI Bank EPC/ PCFC/ FBP/ PSFCSanctioned 25.00 _ 25.00
10 Punjab National Bank Term LoanSanctioned 8.48 _ 8.48
11 Punjab National Bank GECLSanctioned 22.08 _ 22.08
12 Punjab National Bank Common Covid Emergency Line of Credit (CCECL)Sanctioned 0.24 _ 0.24
13 Punjab National Bank Cash CreditSanctioned 15.00 _ 15.00
14 RBL Bank EPC/ PCFC/ FBP/ PSFCSanctioned 10.00 _ 10.00
15 State Bank Of India (SBI) EPC/ PCFC/ FBP/ PSFCSanctioned 18.00 _ 18.00
16 UCO Bank Letter of CreditSanctioned _ 1.00 1.00
17 UCO Bank Bank GuaranteeSanctioned _ 1.00 1.00
18 UCO Bank EPC/ PCFC/ FBP/ PSFCSanctioned 18.00 _ 18.00
Total 247.00 40.00 287.00
TOTAL (Rupees Two Hundred Eighty Seven Crores Only)
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