RATING RATIONALE
25Aug2023

Avantel Ltd.

Brickwork Ratings reaffirms the long term and short term rating and simultaneously withdraws the ratings for the Bank Loan Facilities of Rs. 52.00 Crs. of Avantel Ltd.

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(19 Sep 2022)
Present
Fund Based 32.40 27.00 Long Term BWR BBB+ /Stable
Reaffirmation
BWR BBB + /Stable
Reaffirmation/Withdrawal
(22.00) (22.00)
(2.00) (2.00) Short Term BWR A2
Reaffirmation
BWR A2
Reaffirmation/Withdrawal
(6.00) (6.00)
(3.00) (3.00)
Non Fund Based 25.00 25.00 Short Term BWR A2
Reaffirmation
BWR A2
Reaffirmation/Withdrawal
Grand Total 57.40 52.00 (Rupees Fifty Two 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
*** Previously we had rated Cash credit limit of Rs.27.00 crs , adhoc limit of Rs.5.40 Crs and BG of 25 crs. In view of closure of adhoc limit of Rs.5.40 crs, we are withdrawing the rating without assigning any rating to this adhoc facility and reaffirming and simultaneously withdrawing the rating for the CC limit of Rs.27.00 crs and BG of Rs.25.00 crs.

RATING ACTION / OUTLOOK

The Bank Loan rating of  Avantel Ltd is due for review in September 2023. However , the client has requested for withdrawal of rating. 

Financial performance of the Company was analyzed based on the Q1 FY 24 results published on BSE- SME on 14/8/2023 as well as the audited Financials of FY2023.

The rating continues to draw strength from the extensive experience of the promoters in the execution of government projects, substantial improvement in the scale of operations on an yearly basis, improving net worth, and healthy financial risk profile. However, are constrained by the moderate scale of operations, working capital intensive operations, segment and customer concentration risk and exposure to risks inherent in the tender-based business.

Outlook: Stable

BWR believes the  Avantel Ltd’s business risk profile will be maintained over the medium term. The ‘Stable’ outlook indicates a low likelihood of rating change over the medium term.

Brickwork Ratings has reaffirmed the long term rating of “BWR BBB+/Stable" and reaffirmed the short term rating of “BWR A2" and simultaneously withdrawn the ratings to the bank loan facilities of “ Avantel Ltd.”, at the request of the company. The request letter from the company to this effect, as well as the ‘No Objection’ certificate from the banker of the company for withdrawal of the rating, are held on record.

ABOUT THE ENTITY

Avantel Limited ('Avantel' or 'the company')  was incorporated on 30th May 1990 as a private limited company under the name of Dialog Communications Private Limited, Subsequently, in December 1994 it was converted into a public company and rechristened to Avantel limited in September 2008. The company has been listed on BSE since January 2001. The company has its registered office, manufacturing and R&D facilities at Visakhapatnam, Andhra Pradesh. The company is engaged in the designing, developing and maintaining wireless and satellite communication products, defense electronics, radar systems and the development of network management software applications for its customers predominantly from the aerospace and defense sectors. Avantel undertakes R&D activities for development of innovative solutions in the related areas. Dr. A. Vidyasagar is the Chairman & Managing Director of the company.  Mrs. A. Sarada and Mr. A. Siddhartha Sagar are the other whole-time directors of the family-managed business.

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Not applicable

ANY OTHER INFORMATION

Nil

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 27.00
BWR BBB+/Stable
(Reaffirmation/Withdrawal)
19Sep2022
BWR BBB+ Stable
(Reaffirmation)
18Aug2021
BWR BBB+ Stable
(Assignment)
NA
NA
FB SubLimit LT (22.00)
BWR BBB+/Stable
(Reaffirmation/Withdrawal)
19Sep2022
BWR A2
(Reaffirmation)
18Aug2021
BWR A2
(Assignment)
NA
NA
Fund Based ST 0.00
NA
19Sep2022
BWR A2
(Reaffirmation)
18Aug2021
BWR A2
(Assignment)
NA
NA
FB SubLimit ST (2.00)
BWR A2
(Reaffirmation/Withdrawal)
19Sep2022
BWR A2
(Reaffirmation)
18Aug2021
BWR A2
(Assignment)
NA
NA
FB SubLimit ST (6.00)
BWR A2
(Reaffirmation/Withdrawal)
NA
NA
NA
NA
NA
NA
FB SubLimit ST (3.00)
BWR A2
(Reaffirmation/Withdrawal)
NA
NA
NA
NA
NA
NA
Non Fund Based ST 25.00
BWR A2
(Reaffirmation/Withdrawal)
19Sep2022
BWR A2
(Reaffirmation)
18Aug2021
BWR A2
(Assignment)
NA
NA
Grand Total 52.00 (Rupees Fifty Two Crores Only)
*** Previously we had rated Cash credit limit of Rs.27.00 crs , adhoc limit of Rs.5.40 Crs and BG of 25 crs. In view of closure of adhoc limit of Rs.5.40 crs, we are withdrawing the rating without assigning any rating to this adhoc facility and reaffirming and simultaneously withdrawing the rating for the CC limit of Rs.27.00 crs and BG of Rs.25.00 crs. 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

Deepthi Nair V.

Rating Analyst deepthinair.v@brickworkratings.com

RamaKrishna

Director - Ratings ramakrishna@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Avantel 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 Canara Bank Open Cash Credit / Cash Credit (Hypothecation/Pledge)Sanctioned 27.00 _ 27.00
Sub-Limit (BULC) Sanctioned (2.00)
Sub-Limit (ILC/FLC) Sanctioned (6.00)
Sub-Limit (ODBD) Sanctioned (22.00)
Sub-Limit (PCFC) Sanctioned (3.00)
2 Canara Bank Bank GuaranteeSanctioned _ 25.00 25.00
Total 27.00 25.00 52.00
TOTAL (Rupees Fifty Two Crores Only)
* Previously we had rated Cash credit limit of Rs.27.00 crs , adhoc limit of Rs.5.40 Crs and BG of 25 crs. In view of closure of adhoc limit of Rs.5.40 crs, we are withdrawing the rating without assigning any rating to this adhoc facility and reaffirming and simultaneously withdrawing the rating for the CC limit of Rs.27.00 crs and BG of Rs.25.00 crs.

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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 11,560 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.

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