RATING RATIONALE
29Nov2022

Vinko Auto Industries Ltd.

Brickwork Ratings reaffirms the ratings for the Bank Loan Facilities of Rs. 36.63 Crs. of Vinko Auto Industries Ltd.

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(21 Sep 2021)
Present
Fund Based 12.77 12.23 Long Term BWR BB+ /Stable
Upgrade
BWR BB + /Stable
Reaffirmation
9.00 11.50 Short Term BWR A4+
Upgrade
BWR A4 +
Reaffirmation
Non Fund Based 8.90 12.90 Short Term BWR A4+
Upgrade
BWR A4 +
Reaffirmation
(2.50) (4.00)
Grand Total 30.67 36.63 (Rupees Thirty Six Crores and Sixty Three lakhs 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
Note: This mandate was received before 6th October, 2022.


RATING ACTION / OUTLOOK

BWR reaffirms the long term rating at BWR BB+ with Stable "Outlook" and the short term rating at BWR A4+ for the bank loan facilities of Vinko Auto Industries Ltd.

The rating draws strength from the extensive experience of the promoters, moderate financial risk profile and favourable manufacturing location. However, the rating is constrained on account of competition in the industry and elongated working capital operations.

BWR believes that Vinko Auto Industries Ltd. business risk profile of  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 there is deterioration in the financial risk profile.

KEY RATING DRIVERS

Credit Strengths:


Credit Risks:

ANALYTICAL APPROACH - Standalone

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

Going forward, the ability of the company to improve its revenues, and financial risk profile would remain the key rating sensitivities.

Positive: Rating may be upgraded in case of substantial improvement in revenues, and profitability margins.

Negative: Rating may be downgraded in case there is deterioration in financial risk profile of the company..

LIQUIDITY INDICATORS - Stretched

Company is not having any group concerns/ associates or any subsidiary. 

The company has Cash & Bank Balance Rs 1.07 Cr in FY 22 (A). The current ratio is 1.39 times in FY 22 (A). Average CC utilization from April 2022 to September 2022 is 85.69%. The conversion cycle is 179 days in FY 22 (A), ISCR is 2.62 times in FY 22 (A). DSCR is 1.28 times in FY 22(A). Long term borrowings of Rs 8.37 Cr in FY22(A) includes bank/NBFC borrowing of Rs. 6.76 Cr and unsecured loan of Rs. 1.60 Cr from director. CPLTD is Rs. 2.89 Cr as on FY22(A) against the net cash accruals of Rs. 5.40 Cr projected for FY23(P).

 

ABOUT THE ENTITY

Vinko Auto Industries Limited (VAI) was established as a partnership firm in 1965 by the name of Vinko Auto Industries. The firm was reconstituted as a private limited company in 1972 and then as a public limited company with the current name in 1977. The company is currently being managed by Mr. Mohinder Lal Gupta, Mr. Mukund Rai Gupta, Mr. Anay Gupta, Mr. Rajesh Gupta and Mr. Vinay Gupta who in their individual capacity have a business experience of over a decade. The company is into manufacturing of auto components like hoses & belts. The company has it`s head office located at Jalandhar, Punjab and has 2 manufacturing units at Jalandhar and Noida. The company exports to countries like the USA, Canada, Germany etc while catering to the needs of major domestic PSUs like the railways, ONGC etc. Approximately 30-35% of the revenue is derived from exports sales. 

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 21-22
(Audited)
FY 20-21
(Audited)
Operating Revenue Rs.Crs. 61.32 56.28
EBITDA Rs.Crs. 5.44 7.29
PAT Rs.Crs. 1.11 2.80
Tangible Net Worth Rs.Crs. 25.99 24.88
Total Debt/TNW Times 1.07 1.06
Current Ratio Times 1.39 1.40
KEY COVENANTS OF THE FACILITY RATED

Nil.


NON-COOPERATION WITH PREVIOUS CREDIT RATING AGENCY

N.A.

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)
Facilities Current Rating  (2022) 2022 (History) 2021 2020 2019
Type Tenure Amount
(Rs.Crs.)
Rating Date Rating Date Rating Date Rating Date Rating
Fund Based LT 12.23
BWR BB+/Stable
(Reaffirmation)
NA
NA
21Sep2021
BWR BB+ Stable
(Upgrade)
05Aug2020
BWR BB Stable
(Reaffirmation)
08Apr2019
BWR BBStable
(Assignment)
Fund Based ST 11.50
BWR A4+
(Reaffirmation)
NA
NA
21Sep2021
BWR A4+
(Upgrade)
05Aug2020
BWR A4
(Reaffirmation)
08Apr2019
BWR A4
(Assignment)
Non Fund Based ST 12.90
BWR A4+
(Reaffirmation)
NA
NA
21Sep2021
BWR A4+
(Upgrade)
05Aug2020
BWR A4
(Reaffirmation)
08Apr2019
BWR A4
(Assignment)
NFB SubLimit ST (4.00)
BWR A4+
(Reaffirmation)
NA
NA
NA
NA
NA
NA
NA
NA
Grand Total 36.63 (Rupees Thirty Six Crores and Sixty Three lakhs 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

Mukul Thakur

Ratings Analyst mukul.t@brickworkratings.com

V.K.Kukreja

Associate Director - Ratings Board : +91 11 2341 2232 kukreja.vk@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Vinko Auto 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 Punjab National Bank Cash CreditSanctioned 7.00 _ 7.00
2 Punjab National Bank Packing Credit (PC)Sanctioned _ 7.00 7.00
3 Punjab National Bank ILC/FLCSanctioned _ 12.00 12.00
4 Punjab National Bank Foreign Documentary Bills Purchase/Foreign Outward Bills Purchase (FDBP/FOBP)Sanctioned _ 4.50 4.50
5 Punjab National Bank BG/ILCSanctioned _ 0.90 0.90
6 Small Industries Development Bank of India (SIDBI) Term LoanSanctioned 5.23 _ 5.23
Total 12.23 24.40 36.63
TOTAL (Rupees Thirty Six Crores and Sixty Three lakhs Only)
Print and Digital Media

The Rating Rationale is sent to you for the sole purpose of dissemination through your print, digital or electronic media. While it may be used by you acknowledging credit to BWR, please do not change the wordings in the rationale to avoid conveying a meaning different from what was intended by BWR. BWR alone has the sole right of sharing (both direct and indirect) its rationales for consideration or otherwise through any print or electronic or digital media.

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 12,000 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.

Disclaimer

Brickwork Ratings India Pvt. Ltd. (BWR), a Securities and Exchange Board of India [SEBI] registered Credit Rating Agency and accredited by the Reserve Bank of India [RBI], offers credit ratings of Bank Loan facilities, 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. [ hereafter referred to as "Instruments"]. BWR also rates NGOs, Educational Institutions, Hospitals, Real Estate Developers, Urban Local Bodies and Municipal Corporations.

BWR wishes to inform all persons who may come across Rating Rationales and Rating Reports provided by BWR that the ratings assigned by BWR are based on information obtained from the issuer of the instrument and other reliable sources, which in BWR's best judgment are considered reliable. The Rating Rationale / Rating Report & other rating communications are intended for the jurisdiction of India only. The reports should not be the sole or primary basis for any investment decision within the meaning of any law or regulation (including the laws and regulations applicable in Europe and also the USA).

BWR also wishes to inform that access or use of the said documents does not create a client relationship between the user and BWR.

The ratings assigned by BWR are only an expression of BWR's opinion on the entity / instrument and should not in any manner be construed as being a recommendation to either, purchase, hold or sell the instrument.

BWR also wishes to abundantly clarify that these ratings are not to be considered as an investment advice in any jurisdiction nor are they to be used as a basis for or as an alternative to independent financial advice and judgment obtained from the user's financial advisors. BWR shall not be liable to any losses incurred by the users of these Rating Rationales, Rating Reports or its contents. BWR reserves the right to vary, modify, suspend or withdraw the ratings at any time without assigning reasons for the same.

BWR's ratings reflect BWR's opinion on the day the ratings are published and are not reflective of factual circumstances that may have arisen on a later date. BWR is not obliged to update its opinion based on any public notification, in any form or format although BWR may disseminate its opinion and analysis when deemed fit.

Neither BWR nor its affiliates, third party providers, as well as the directors, officers, shareholders, employees or agents (collectively, "BWR Party") guarantee the accuracy, completeness or adequacy of the Ratings, and no BWR Party shall have any liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of any part of the Rating Rationales or Rating Reports. Each BWR Party disclaims all express or implied warranties, including, but not limited to, any warranties of merchantability, suitability or fitness for a particular purpose or use. In no event shall any BWR Party be liable to any one for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of any part of the Rating Rationales and/or Rating Reports even if advised of the possibility of such damages. However, BWR or its associates may have other commercial transactions with the company/entity. BWR and its affiliates do not act as a fiduciary.

BWR keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of the respective activity. As a result, certain business units of BWR may have information that is not available to other BWR business units. BWR has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process.

BWR clarifies that it may have been paid a fee by the issuers or underwriters of the instruments, facilities, securities etc., or from obligors. BWR's public ratings and analysis are made available on its web site, www.brickworkratings.com. More detailed information may be provided for a fee. BWR's rating criteria are also generally made available without charge on BWR's website.

This disclaimer forms an integral part of the Ratings Rationales / Rating Reports or other press releases, advisories, communications issued by BWR and circulation of the ratings without this disclaimer is prohibited.

BWR is bound by the Code of Conduct for Credit Rating Agencies issued by the Securities and Exchange Board of India and is governed by the applicable regulations issued by the Securities and Exchange Board of India as amended from time to time.