Brickwork Ratings revises the ratings for the Bank Loan Facilities of Rs. 300.00 Crs. of HIL (India) Ltd. (erstwhile Hindustan Insecticides Ltd.)
ParticularsFacilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
---|---|---|---|---|---|
Previous | Present | Previous (11 May 2020) |
Present | ||
Fund Based | 250.00 | 250.00 | Long Term |
BWR BBB- (Stable)
#Upgrade |
BWR D
Downgrade |
Non Fund Based | 50.00 | 50.00 | Short Term |
BWR A3
#Upgrade |
BWR D
Downgrade |
Grand Total | 300.00 | 300.00 | (Rupees Three Hundred Zero Crores Only) |
Brickwork ratings has downgraded the Long Term and short term ratings of HIL (India) Ltd to BWR D. The rating downgrade reflects the delays in debt servicing in term loans and cash credit accounts in the last six months. The lender has also confirmed that there are instances of delay in servicing of debt of Covid loan and term loan and instances of over utilization of Cash Credit facility.
KEY RATING DRIVERSANALYTICAL APPROACH - Standalone
For arriving at its ratings, BWR has applied its rating methodology as debited in the Rating Criteria detailed below ( hyperlinks provided at the end of this rationale).
RATING SENSITIVITIES
Positive : Timely debt servicing for three consecutive months will be a positive rating sensitivity.
LIQUIDITY INDICATORS - Stretched
Company has Fund Based facility of Rs. 150 crs and its average utilisation of the fund-based limits is 97% over the last 6 months. There are instances of over utilisation of Cash Credit facility and delays were observed in servicing of Term loan and covid loan. Company has cash accruals(PAT +DEP) of Rs 6.13 Crs in FY 20 declined from Rs. 9.63 Cr in FY19. Company has shown an improvement in generated cash from its operating activities from Rs. (21.24) Crs in FY20 declined from Rs. 45.79 Crs in FY 19. Due to covid - 19, the company has been facing issues in the realisation of payment from Ministry resulting in debt servicing. However, the company has received a payment of Rs. 21 Crs as part compensation from HUDA for land acquired and expected to receive Rs. 16 Crs by FY 22.
ABOUT THE ENTITYHIL (INDIA) LTD formerly known as Hindustan Insecticide Limited is a Government of India Enterprise. Company is under the administrative control of Department of Chemicals and Petrochemicals, under Ministry of Chemicals and Fertilizers. HIL is the only manufacturer of DDT and also the only CPSE operating in Public Health and Crop Protection segments in India. The company gradually diversified into agrochemicals and is presently the sole public sector enterprise in the pesticides field The product range of the company includes Insecticides, Herbicides, Weedicides and Fungicides etc. The Company has three manufacturing units in Rasayani (Maharashtra), Udyogamandal (Kerala) and Bhatinda in Punjab. The company exports its agro-products to Netherlands, UK, Jamaica, UAE, Manila, South Korea, Belgium, Guatemala, France, Germany, Argentina, Ethiopia, Egypt, Spain, etc. and its products are well-accepted internationally. HIL has reputed clientele viz., Ministry of Chemicals & Fertilizers, Ministry of Health & Family Welfare, Ministry of Agriculture, Steel Authority of India Limited, Indian Oil Corporation, Bharat Electronics Limited., Coal India Limited, Haryana Tourism etc.
KEY FINANCIAL INDICATORS (Standalone)Key Parameters | Units |
FY 19-20 (Audited) |
FY 18-19 (Audited) |
---|---|---|---|
Operating Revenue | Rs.Crs. | 394.11 | 450.75 |
EBITDA | Rs.Crs. | -6.59 | 25.06 |
PAT | Rs.Crs. | 0.59 | 3.62 |
Tangible Net Worth | Rs.Crs. | 98.43 | 97.08 |
Total Debt/Tangible Net Worth | Times | 1.65 | 1.54 |
Current Ratio | Times | 1.16 | 1.16 |
Facilities | Current Rating (2021) | 2020 | 2019 | 2018 | |||||
---|---|---|---|---|---|---|---|---|---|
Type | Tenure | Amount (Rs.Crs.) |
Rating | Date | Rating | Date | Rating | Date | Rating |
Fund Based | LT | 250.00 |
BWR D
(Downgrade) |
11May2020 |
BWR BBB- (Stable)
(#Upgrade) |
20Sep2019 |
BWR BB+ (Stable)
(#Issuer Non Cooperation) |
NA |
NA
|
Non Fund Based | ST | 50.00 |
BWR D
(Downgrade) |
11May2020 |
BWR A3
(#Upgrade) |
20Sep2019 |
BWR A4+
(#Issuer Non Cooperation) |
NA |
NA
|
Grand Total | 300.00 | (Rupees Three Hundred Zero 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.
Hyperlink/Reference to applicable CriteriaAnalytical Contacts | |
---|---|
Neha Wahi Ratings Analyst Board : +91 11 2341 2232 nehawahi@brickworkratings.com |
Tanu Sharma Director - Ratings tanusharma@brickworkratings.com |
1-860-425-2742 | media@brickworkratings.com |
SL.No. | Name of the Bank/Lender | Type Of Facilities | Long Term(Rs.Crs.) | Short Term(Rs.Crs.) | Total(Rs.Crs.) | |
---|---|---|---|---|---|---|
1 | Union Bank of India | Cash CreditSanctioned | 150.00 | _ | 150.00 | |
2 | Union Bank of India | Letter of CreditSanctioned | _ | 50.00 | 50.00 | |
3 | Union Bank of India | Term LoanSanctioned | 100.00 | _ | 100.00 | |
4 | Union Bank of India | Term LoanProposed | _ | _ | 0.00 | |
Total | 250.00 | 50.00 | 300.00 | |||
TOTAL (Rupees Three Hundred Zero Crores Only) |
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