RATING RATIONALE
27Aug2021

Vishwaraj Sugar Industries Ltd.

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs. 175.00 Crs. of Vishwaraj Sugar Industries Ltd. (VSIL or the Company)

Particulars
Facilities** Amount(Rs.Crs.) Tenure Rating#
Fund Based 175.00 Long Term BWR BB + /Stable
Assignment
Non Fund Based (10.00) Short Term BWR A4 +
Assignment
Grand Total 175.00 (Rupees One Hundred Seventy Five 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
RATING ACTION / OUTLOOK

BWR Assigns a rating of BWR BB+/A4+(Stable) for the Bank Loan Facilities of Vishwaraj Sugar Industries Ltd.

The rating reflects extensive experience of VSIL's management team in the sugar industry, diversified revenue profile, integrated operations, healthy net worth base and improving profit margins. These strengths are partially offset by high debt levels, below average debt coverage indicators, cyclicality in the sugar business, susceptibility to regulatory changes, volatility in sugar prices and working capital intensive nature of business.

KEY RATING DRIVERS

Credit Strengths:


Credit Risks:

ANALYTICAL APPROACH - Standalone

BWR has relied upon audited financials of the Company upto FY21, unaudted Q1FY22 financial results and projection upto FY23, publicly available data and information/clarifications provided by the management.

RATING SENSITIVITIES

Positive: If the Company manages to achieve its projections and improve the profitability margins as envisaged it would be positive for the ratings.

Negative: Deterioration in sales and key financial indicators, higher than projected debt would be negative for the ratings.

LIQUIDITY INDICATORS - Adequate

The liquidity position of the Company is adequate as its current ratio as on June 30, 2021 stood moderate at 1.23x. The average CC utilisation of the Company for last 7 months stood moderate at 75% and it has cash & bank balance of Rs.2.11 Crs.

Further, the Company is expected to generate cash accruals of around Rs.59 Crs in FY22 as against principal debt repayment of Rs.27.28 Crs.

ABOUT THE ENTITY

Vishwaraj Sugar Industries Limited (VSIL) is Belgaum, Karnataka based company incorporated in May 1995 by Mr.Umesh Katti and family. The Company is listed on BSE & NSE. It is engaged in manufacturing of Sugar, Alcoholic Spirits by Distillation including Ethanol, Natural Alcohol Vinegar and Generation of Power. The Company has a fully integrated plant at Bellad Bagewadi, Belgaum District in North Karnataka. The Company procures only sugarcane as a raw material from local farmers and utilises the by-products for distillery unit and power generation.

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 20-21
(Audited)
FY 19-20
(Audited)
Operating Revenue Rs.Crs. 426.46 376.74
EBITDA Rs.Crs. 62.19 38.28
PAT Rs.Crs. 8.29 -7.88
Tangible Net Worth Rs.Crs. 226.01 221.83
Total Debt/Tangible Net Worth Times 1.66 1.56
Current Ratio Times 1.12 1.06

RATING HISTORY FOR LAST THREE YEARS (including withdrawal and suspended)
Facilities Current Rating  (2021) 2020 2019 2018
Type Tenure Amount
(Rs.Crs.)
Rating Date Rating Date Rating Date Rating
Fund Based LT 175.00
BWR BB+/Stable
(Assignment)
NA
NA
NA
NA
NA
NA
NFB SubLimit ST (10.00)
BWR A4+
(Assignment)
NA
NA
NA
NA
NA
NA
Grand Total 175.00 (Rupees One Hundred Seventy Five 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

Prashant Sahadev Mondkar

Ratings Analyst Board : +91 22 2831 1426, +91 22 2831 1439 prashant.sm@brickworkratings.com

Chintan Dilip Lakhani

Director- Ratings chintan.l@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Vishwaraj Sugar 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 Bank of India Cash CreditSanctioned 46.00 _ 46.00
2 Bank of India Working Capital Demand LoanSanctioned 69.00 _ 69.00
3 State Bank Of India (SBI) Cash Credit (WHR)Sanctioned 60.00 _ 60.00
Total 175.00 0.00 175.00
TOTAL (Rupees One Hundred Seventy Five Crores Only)
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About Brickwork Ratings

Brickwork Ratings (BWR), a Securities and Exchange Board of India [SEBI] registered Credit Rating Agency and accredited by Reserve Bank of India [RBI], offers credit ratings of Bank Loan, Non- convertible / convertible / partially convertible debentures and other capital market instruments and bonds, Commercial Paper, perpetual bonds, asset-backed and mortgage-backed securities, partial guarantees and other structured / credit enhanced debt instruments, Security Receipts, Securitization Products, Municipal Bonds, etc. BWR has rated over 11,400 medium and large corporates and financial institutions’ instruments. BWR has also rated NGOs, Educational Institutions, Hospitals, Real Estate Developers, Urban Local Bodies and Municipal Corporations. BWR has Canara Bank, a leading public sector bank, as one of the promoters and strategic partner. BWR has its corporate office in Bengaluru and a country-wide presence with its offices in Ahmedabad, Chandigarh, Chennai, Hyderabad, Kolkata, Mumbai and New Delhi along with representatives in 150+ locations.

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