Brickwork Ratings reaffirms the long term ratings for the Bank Loan Facilities of Rs. 32.50 Crs. of Kashipur Infrastructure and Freight Terminal Pvt. Ltd.
ParticularsFacilities** | Amount (Rs.Crs.) | Tenure | Rating# | ||
---|---|---|---|---|---|
Previous | Present | Previous (05 Apr 2021) |
Present | ||
Fund Based | 35.34 | 32.50 | Long Term |
BWR BB+/Stable
Assignment |
BWR BB +
/Stable Reaffirmation |
Grand Total | 35.34 | 32.50 | (Rupees Thirty Two Crores and Fifty lakhs Only) |
BWR has reaffirmed the Long Term rating at BWR BB+ (Stable) for the bank loan facilities of Kashipur Infrastructure and Freight Terminal Pvt. Ltd. (KIFTPL).
BWR has principally relied upon audited financial results up to FY21, projected financials for FY22 & FY23, publicly available information and information/clarifications provided by the management of the firm and their representatives. While assigning the rating, BWR has factored the strategic support from KIFTPL's JV parents (IGL & ALS), location advantage of the terminal coupled with growing EXIM trade industry in India aiding the business of KIFTPL.
KEY RATING DRIVERSCredit Strengths:
Both ALS and IGL exhibit strong operational and strategic linkages with KIFTPL. ALS is a logistics service provider that supplements KIFTPL’s operations at the logistics facility, while IGL (public listed company) provides cargos to KIFTPL’s facility, which is strategically located next to IGL’s flagship production plant. KIFTPL received INR 5.38 Cr. of equity infusion from its JV parents' promoters for debt servicing and operational support.
KIFTPL is at a comfortable position in term of its locational advantage with plenty of sugar and paper mills in the Kashipur district which will aid the operations of the business in cargo handling service, warehousing or custom clearance services. Moreover, with the economy reviving and the EXIM business starting to reach the pre covid-19 levels, the cargo volumes are expected to rise amid stronger macroeconomic fundamentals and e-commerce push in India. Also, the recent 'Dedicated Freight Corridor' initiative by the government and increased double stacking volume will support higher operating efficiencies, which is likely to support EBITDA margins in FY22-FY23 of the ICDs/CFS players.
KIFTPL has been relying on the equity infusion by its JV parents for its debt servicing/interest servicing/operational support. The equity infusion increased from INR 4.80 Cr. in FY19 to INR 5.38 Cr. in FY20 as addition to security premium account and issue of new shares during the year. The insufficiency of cash generated from operations of INR 5.08 Cr. in FY20 towards meeting its debt repayment obligations of INR 6 Cr. (excluding interest) has been supported by equity infusion by the JV partners' promoters. However, BWR expects the credit profile to improve on account of improvement in the operations of the company that might reduce the reliance of equity infusion from its JV parents.
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
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
Positive : Developments that could lead to a positive rating action include significant improvement in overall financial and operational profile of KIFTPL and also its JV parents. With significant improvement in scale of the business coupled with adequate debt repayment capacity might be favorable for a positive rating action. Low reliance on the JV parents for operational and financial support would also be positive for KIFTPL.
Negative : The rating may be downgraded if there is deterioration in the financial profile led by a drop in the revenue from the FY20 level, rise in equity infusion by the JV parents or declining cash generation from operations. The rating might also be downgraded if there is a significant deterioration in the financial profile of KIFTPL's JV parents.
LIQUIDITY INDICATORS - Adequate
1. The Cash and Bank balances as on 31.3.2021 is Rs. 0.17 Cr.
2. Net Cash Accruals in FY21 is Rs. 5.84 Cr. against which Current portion of long term debt(CPLTD) is Rs. 7.90 Cr. Net Cash Accrual is estimated to improve in FY22 at Rs. 9.15 Cr. against which CPLTD is Rs. 10.37 Cr.
3. Debt Protection metrics i.e. ISCR and DSCR stands at 1.30X and 0.63X in FY20. Both the coverage ratios have increased to 2.64X and 0.88X in FY21. As per FY22 ISCR and DSCR is estimated to be 4.44X and 0.98X respectively.
Hence, the Liquidity of the company is adequate.
NDS of the company is received from September'21 to February'22.
ABOUT THE ENTITYKashipur Infrastructure & Freight Terminal Pvt. Ltd. (KIFTPL) was incorporated in 2012 as a joint Venture between India Glycol Limited (IGL) and Apollo Logisolutions Limited (ALS). The operations were started in April, 2017 in Kashipur district, Uttarakhand as a Private Freight Terminal cum inland Container Depot (ICD) with services offered like cargo handling (dry/liquid), container handling, storage, warehousing and custom clearance for its EXIM and domestic trade clients. Among the JV parents, IGL holds 42.3% of shareholding and ALS holds 51% of shareholding in KIFTPL as on 31st March 2020.
KEY FINANCIAL INDICATORS (Standalone)Key Parameters | Units |
FY 20-21 (Audited) |
FY 19-20 (Audited) |
---|---|---|---|
Operating Revenue | Rs.Crs. | 20.25 | 17.40 |
EBITDA | Rs.Crs. | 8.78 | 4.76 |
PAT | Rs.Crs. | 1.70 | -0.97 |
Tangible Net Worth | Rs.Crs. | 63.01 | 61.23 |
Total Debt/Tangible Net Worth | Times | 0.46 | 0.49 |
Current Ratio | Times | 0.40 | 0.25 |
NA
Facilities | Current Rating (2022) | 2021 | 2020 | 2019 | |||||
---|---|---|---|---|---|---|---|---|---|
Type | Tenure | Amount (Rs.Crs.) |
Rating | Date | Rating | Date | Rating | Date | Rating |
Fund Based | LT | 32.50 |
BWR BB+/Stable
(Reaffirmation) |
05Apr2021 |
BWR BB+Stable
(Assignment) |
NA |
NA
|
NA |
NA
|
Grand Total | 32.50 | (Rupees Thirty Two 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 CriteriaAnalytical Contacts | |
---|---|
Ashish Kumar Ratings Analyst ashish.k@brickworkratings.com |
Hari Kishan Yadav Associate Director - Ratings hari.ky@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 | IndusInd Bank | Term Loan | 23.50 | _ | 23.50 | |
2 | IndusInd Bank | GECLProposed | 4.00 | _ | 4.00 | |
3 | IndusInd Bank | Working Capital (CC)Sanctioned | 5.00 | _ | 5.00 | |
Total | 32.50 | 0.00 | 32.50 | |||
TOTAL (Rupees Thirty Two Crores and Fifty lakhs Only) |
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