RATING RATIONALE
15 Sep 2022

Dhaliwal-Sobti Sugar & Chemical Industries Pvt. Ltd.

Brickwork Ratings assigns the ratings for the Bank Loan Facilities of Rs.23.00 Crs. of Dhaliwal-Sobti Sugar & Chemical Industries Pvt. Ltd.

Particulars
Facility** Amount (Rs.Crs) Tenure Rating*
Fund Based
Term Loan
Cash Credit
18.00
05.00
Long Term BWR BB - (Stable)
Sub Total 23.00
Grand Total 23.00 (Rupees Twenty Three Crores Only)
*Please refer to BWR website www.brickworkratings.com for definition of the ratings
**Details of Bank facilities are provided in Annexure-I
RATING ACTION / OUTLOOK : Stable

Brickwork assigns the long term rating to Dhaliwal-Sobti Sugar & Chemical Industries Pvt. Ltd. of BWR BB- Stable as business risk profile will be maintained over the medium term. The 'Stable' outlook indicates a low likelihood of rating change over the medium term. It continues to derive comfort from the vast experience of its management  for smooth functioning of the business. The ratings also positively factor in its gradual improving of  scale of operations, capital structure and moderate debt protection metrics. However, these rating strengths remain constrained due to cyclic nature of the business. 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 the revenues go down and profit margins show lower than expected figures.

KEY RATING DRIVERS

Credit Strengths:


Credit Risks:

ANALYTICAL APPROACH AND APPLICABLE RATING CRITERIA

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 further increase its scale of operations by improving its revenue, profitability margins and financial risk profile, as usual maintaining its debt obligations and efficiently managing its working capital will be the key rating sensitivities.

Positive: The ratings may be upgraded if revenue, profitability, financial strength, liquidity and overall credit profile show substantial improvement.

Negative: The rating may be downgraded in case there is a significant deterioration in the business and financial risk profile of the company from its current level.

LIQUIDITY POSITION

Hence, the overall liquidity of the company is adequate.

PROFILE

Dhaliwal-Sobti Sugar & Chemical Industries Pvt. Ltd. incorporated on 14th October 2020 at Bareilly, Uttar Pradesh. The Company is formed with a business objective for manufacturing of sugar products, refinery of sugar, sugarcane, molasses and chemicals. They generally deal in sugar, sugar beets, sugarcane, molasses, syrups, alcohol and all products or by products thereof and food products. The manufacturing plant is located at Lakhimrpur Kheeri, U.P with the installed capacity of 1500 TCD (Tones of Cane per day). The company is managed by Mr. Nainjeet Singh Sobti and Mr. Harpreet Singh Dhaliwal who joined hands to share their experience for smooth functioning of the business.

KEY FINANCIAL INDICATORS
Key Parameters Units FY 21-22
(Provisional)
FY 20-21
(Audited)
Operating Revenue Rs.Crs. 5.30 0.00
EBITDA Rs.Crs. 1.52 0.00
PAT Rs.Crs. 0.08 0.00
Tangible Net Worth Rs.Crs. -0.28 0.50
Total Debt/Tangible Net Worth Times -125.22 11.92
Current Ratio Times 1.02 1.31

RATING HISTORY (INCLUDING WITHDRAWAL AND SUSPENSION)
S.No Current Rating (2022) Rating History
Facilities Tenure Amount (Rs.Crs) Rating 2021 2020 2019
Fund Based
1
Term Loan
Cash Credit
Long Term
18.00
05.00
BWR BB-
(Stable)
NA NA NA
Total 23.00 (Rupees Twenty Three Crores Only)
COMPLEXITY LEVELS OF THE INSTRUMENTS

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 : For More Information Contact:
Analytical Contacts

Kartik Arora

Lead Analyst kartik.a@brickworkratings.com

Hari Kishan Yadav

Associate Director - Ratings hari.ky@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Dhaliwal-Sobti Sugar & Chemical Industries Pvt. 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 & Sind Bank Term Loan 18.00 _ 18.00
2 Punjab & Sind Bank Cash Credit 5.00 _ 5.00
Total 23.00 0.00 23.00
TOTAL (Rupees Twenty Three Crores Only)
ANNEXURE-II
INSTRUMENT DETAILS

InstrumentIssue DateAmount (Rs.Crs)Coupon RateMaturity DateISIN Particulars
NANANANANANA

ANNEXURE-III
List of entities consolidated

Name of Entity% OwnershipExtent of consolidationRationale for consolidation
NANANANA

Additional information is available at www.brickworkratings.com The ratings above were solicited by,or on behalf of , the issuer, and therefore, Brickwork Ratings has been compensated for the provision of the ratings.
Ratings are not a recommendation or suggestion ,directly or indirectly, to you or any other person, to buy sell, make or hold on any investement,loan or security or to undertake any investement strategy with respect to any investment,loan or security or any issuer.
About Brickwork Ratings

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