Haripriya Spinning Mill Pvt. Ltd.

Brickwork Ratings assigns the long-term ratings of BWR BBB-/Stable for the Bank Loan Facilities of Rs. 126.75 Crores. of Haripriya Spinning Mill Pvt. Ltd.

Particulars

Facilities**	Amount(Rs.Crs.)	Tenure	Rating#
Fund Based	119.50	Long Term	BWR BBB - /Stable Assignment
Non Fund Based	7.25	Long Term	BWR BBB - /Stable Assignment
Grand Total	126.75	(Rupees One Hundred Twenty Six Crores and Seventy Five 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 RATING ACTION / OUTLOOK

Brickwork Ratings (BWR) assigns the ratings BWR BBB-/Stable for the long-term bank loan facilities of Haripriya Spinning Mill Pvt. Ltd amounting to Rs.126.75 crores. The ratings factor in the company’s management expertise and strong client base. The assessment also considers the company’s improved and healthy financial profile with improvement in revenue with Y-o-Y growth rate of 21% over FY25 with an EBITDA margin of 9.53% in FY26 Provisionals, comfortable capital structure with improved Y-o-Y  Adjusted TNW of Rs.104 Crores as at FY26 Provisionals along with adequate liquidity with sufficient cash accruals to cover the upcoming debt obligations and satisfactory debt protection metrics supported by satisfactory bankers feedback—each of which contributes to the overall credit strength. However, the ratings are constrained by several factors, including risks associated with working capital–intensive nature of operations and susceptibility to raw material price volatility as well as the highly competitive nature and cyclicality of the industry and exposure to evolving ESG compliance. The stable outlook indicates a moderate likelihood of a rating change over the medium term due to promoters' extensive industry experience and expertise, the company's strong relationship with its clientele and its stable financial risk profile. BWR expects the company to enhance its scale of operations, improve profitability margins and strengthen its liquidity position and show stabilization of operations for long-term by mitigating risks involved in the business while maintaining adequate capital structure, all of which could lead to a positive outlook. However, any significant underperformance in revenue, deterioration in profitability or gearing indicators or a deterioration in the capital structure or debt protection metrics due to fresh debt-financed capital expenditure, liquidity challenges due to extended working capital cycle could result in a revision to a negative outlook. 

KEY RATING DRIVERS

Credit Strengths:

• Extensive Industry Experience of the Promoters & Established Track Record :

  The Haripriya Spinning Mill Private Limited (HSMPL) or the company benefits significantly from the deep-rooted industry expertise and active involvement of its core promoter-directors, who possess an established operational track record in the highly competitive textile domain. The strategic vision and day-to-day operations are steered by Mr. Rameshbhai Jivrajbhai Ranipa (aged 54 years), who brings more than three decades of extensive industrial experience, alongside Mr. Hareshbhai Kanjibhai Ranipa (aged 45 years), who contributes over two decades of specialized expertise in the yarn business. Both key promoters hold graduation degrees, anchoring the management framework with a strong blend of formal academic qualifications and technical acumen. This multi-decadal operational experience gives the management a profound understanding of raw cotton procurement cycles, domestic demand dynamics, and spinning mill asset optimization. This extensive background provides significant comfort to lenders, mitigates operational execution risks, and enhances the company’s ability to navigate cyclical industry downturns effectively and their networking governance, which includes common directorships in other related entities, aiding strong decision-making and the business's going concern ability.

   

• Improving and Healthy Financial Risk Profile Driven by Strong Scale Up :

  The Haripriya Spinning Mill Private Limited (HSMPL) or the company has demonstrated an exceptional trajectory of operational scale-up, maintaining its revenue above the Rs. 300 crore thresholds for the last two consecutive fiscal years. Revenue from operations grew from a nascent base of Rs. 3.12 crore in FY24 (initial launch period) to Rs. 307.00 crore in FY25 and further accelerated to Rs. 371.32 crore in the FY26 provisionals—registering a robust year-on-year growth rate of 21% over FY25, due to surging sales volumes of cotton yarn and cotton waste. Along with volume-driven expansion, the company’s absolute profitability has strengthened considerably. EBITDA rose from Rs. 27.42 crore in FY25 to Rs. 35.38 crore in FY26 (provisional), with the operating margin optimizing from 8.94% in FY25 to 9.53% in FY26. Concurrently, the bottom line witnessed a sharp turnaround; after turning positive at Rs. 2.86 crore in FY25 (PAT margin of 0.93%), Net Profit surged to Rs. 12.01 crore in FY26 (provisional), driving up the net profit margin to a healthy 3.23%.

• Strengthened Capital Structure and Comfortable Debt Coverage Metrics :

  The continuous retention of operating profits has steadily augmented the company's equity base, fostering a resilient capital structure. Adjusted Tangible Net Worth (TNW) increased progressively from Rs.75.50 crore in FY25 to a robust Rs.104.35 crore in the FY26 provisionals. This accretion of capital significantly deleveraged the balance sheet, with the adjusted Debt-to-Equity ratio improving from a peak of 2.34 times in FY25 to a conservative time of 1.18 times in FY26 provisionals. Liquidity and short-term debt-servicing capabilities have moved in tandem; the current ratio rebounded strongly from 1.01 times in FY25 to a comfortable 1.72 times in FY26 provisionals, indicating adequate current asset padding against short-term obligations. Backed by expanding cash accruals, key solvency metrics exhibit a high degree of cushion for lenders: the Interest Service Coverage Ratio (ISCR) strengthened from 2.18 times in FY25 to 2.85 times in FY26 provisionals, while the Debt Service Coverage Ratio (DSCR) scaled up from 1.36 times to a healthy 1.46 times over the same period, mitigating credit risk. 

   

Credit Risks:

• Product Concentration and Geographic Risk and High Exposure to Key Domestic Hubs :

  The Haripriya Spinning Mill Private Limited (HSMPL) or the company benefits from high operational utilization across its production lines; its business model remains exposed to product and geographic concentration risks. During FY26 (Provisional), revenue streams were heavily weighted toward a single core segment, with Cotton Yarn sales accounting for 88% of total sales and Cotton Waste contributing 12% of total sales. This high reliance on cotton spinning leaves the company's financial performance acutely vulnerable to localized supply-demand mismatches and sudden price corrections in the yarn market.
  This product concentration is further amplified by geographic risk, as the company operates with a purely pan-India domestic footprint, lacking international export diversification. Sales are heavily tied to specific industrial textile states, namely Gujarat, Maharashtra, Madhya Pradesh, Punjab, and Tamil Nadu. This multi-state concentration means that any regional economic shocks, amendments to state-specific power subsidies, localized labor challenges, or consumption slowdowns within these primary weaving and garmenting clusters could immediately damp demand and compress operating margins.

• Susceptibility of Profitability to Raw Material Price Volatility and High Working Capital Intensity :

  The profitability of Haripriya Spinning Mill Private Limited (HSMPL) remains highly sensitive to systemic volatility in raw cotton prices, which constitutes the primary cost component at approximately 80% of the company's total manufacturing expense. Raw cotton prices fluctuate significantly due to seasonal harvesting factors, vagaries of the monsoon, domestic production yields, global demand-supply imbalances, and regulatory interventions such as the Government of India's Minimum Support Price (MSP) adjustments. Given the highly competitive and commoditized nature of the spinning industry, HSMPL has limited pricing flexibility and low bargaining power, restricting its ability to pass on sudden hikes in input costs to downstream customers and exposing the company to severe inventory valuation loss risks.

  This margin vulnerability is further magnified by the inherent working capital intensity of the company's operations. Because raw cotton availability is highly seasonal, the mill must engage in bulk procurement during the peak harvest period to lock in raw material inventory for year-round production requirements. This cyclical procurement strategy ties up significant liquidity in inventory over extended durations. While HSMPL partially mitigates these working capital pressures by leveraging established relationships with suppliers to secure extended credit periods of around 2 months, the combination of elevated seasonal working capital requirements and raw material price volatility continues to be a primary credit concern.

   

• Presence in a Fragmented, Cyclical, and Competitive Industry Alongside Stringent ESG Compliance Pressures :

  Haripriya Spinning Mill Private Limited (HSMPL) or company  operates within an inherently cyclical and highly fragmented textile manufacturing landscape. The industry is characterized by the presence of a vast number of both organized and unorganized players, resulting in aggressive pricing competition. Because cotton yarn is commoditized with low product differentiation, HSMPL's standalone pricing flexibility is constrained. Furthermore, the textile sector is tightly linked to global and domestic macroeconomic business cycles; fluctuations in international demand-supply dynamics directly impact local yarn valuations and finished goods pricing, making the company's operating profit margins highly sensitive to global economic shifts.
  Compounding these marketplace risks are the increasing operational headwinds associated with stringent environmental regulations and evolving Sustainability/ESG (Environmental, Social, and Governance) mandates. The textile industry is subject to rigorous pollution control norms, particularly regarding wastewater discharge, chemical effluent treatment, and industrial waste management. Non-compliance with these evolving benchmarks poses material credit risks, including legal penalties, unexpected operational disruptions, and severe reputational damage. Adhering to rising ESG expectations from lenders and regulatory authorities will require the company to commit ongoing capital expenditure toward eco-friendly technologies, sustainable raw material sourcing, and zero-liquid-discharge systems. These mandatory investments could escalate near-term operational costs and strain cash flows, while any delay in adaptation would adversely impair the mill's long-term market competitiveness and credit profile.

   

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). BWR has principally relied upon the Standalone audited financials up to FY25 and clarification/information provided by the company.

RATING SENSITIVITIES

The company’s ability to increase its scale of operations, improve profitability and margins, efficiently manage its working capital requirements with adequate liquidity, debt protection metrics and strengthen overall credit profile would be the key rating sensitivities.

Positive Rating Factors:

• The rating may be upgraded if the revenue performance improved with Y-o-Y revenue growth, supported by enhanced profitability, with EBITDA margins exceeding 12%.
• A healthier debt profile, including Adjusted Total Debt/ Adjusted TNW below 1.00x, TOL/TNW below 1.50x, and maintaining debt protection metrics DSCR above 1.40 times, ISCR above 2.5 times and liquidity with an improved current ratio above current level which strengthens working capital efficiency.

Negative Rating Factors:

• The ratings may be downgraded if revenue declines by more than 10% Y-o-Y due to weaker demand, or if profitability weakens, with EBITDA margins dropping under 7%.
• A rising debt burden, accompanied by a decline in key ratios such as Total Debt to Tangible Net Worth (TOD/TNW) above 2 times , Current Ratio (CR), Interest Coverage Ratio (ISCR), and Debt Service Coverage Ratio (DSCR) falling below 1 times, may signal a deterioration in the financial position and reduced debt servicing capacity.

LIQUIDITY INDICATORS - Adequate

The company’s (HSMPL)  liquidity position is adequate with a cash and cash equivalents  of Rs.6.95 crores in FY25 and Rs.8.06  Crores in FY26 provisionals, EBITDA of Rs.27.42 crores in FY25 and Rs.35.38 crores in FY26 provisionals, and gross cash accruals of Rs.15.29 crores in FY 25 and Rs.23.33 crores in FY26 Provisionals , which is adequate to cover interest and finance charges of Rs.12.56  crores in FY25 and Rs.12.43  crores in FY26 provisionals and the current portion of long-term debt of Rs.12.00 crores in FY25 and Rs.13.50  crores in FY26 provisionals respectively. The average utilization of working capital facilities stands at around 85 to 90%, reflecting efficient use of the sanctioned limits. Further liquidity is supported by adequate net worth with a gearing of times 1.14 times in FY26 provisionals, a current ratio of 1.02 times in FY25 and 1.72 times in FY26 provisionals and 1.19 time in FY26 provisionals and projected cash accruals of Rs.30.64 crores and current ratio of 1.50 times respectively show an adequate current and liquid assets. Based on these factors, the liquidity is assessed as "Adequate”. 

ABOUT THE ENTITY

Haripriya Spinning Mill Private Limited is a domestic private limited company incorporated under the CIN U17309GJ2021PTC127548. The company specializes in manufacturing high-quality cotton yarn, positioning itself as a key player in the regional textile industry. Its registered corporate office is strategically located at AURA Wing A-1301, near Arjun Party Plot, New Ring Road, Rajkot - 360005.

The company operates a comprehensive manufacturing facility situated at Survey No. 157/2, 158/2/paiki 1, 165/1/paiki 1, 165/2, 164, 160, and 161 on the Rajkot-Jamnagar Highway. Located near Ram Dham Ashram in Depaliya Tal., Padadhri (District Rajkot - 360110), the unit is well-positioned for efficient logistics and distribution. Through its dedicated manufacturing infrastructure, Haripriya Spinning Mill Private Limited continues to contribute to the domestic textile supply chain.

The company is led by an experienced management team, led by Mr. Hareshbhai Kanjibhai Ranipa and Mr. Rameshkumar Jivrajbhai Ranipa are the directors and brings over three decades of expertise in the Yarn Industry.

ESG Profile

Environmental, Social, and Governance (ESG) Profile: Haripriya Spinning Mill Pvt. Ltd.

The company’s ESG profile of Haripriya Spinning Mills Private limited assessed as Adequate, demonstrating a strong commitment to clean energy transition, legal and regulatory compliance, industrial workforce equity, and international sustainable textile standards.

Environmental (E):

Haripriya Spinning Mill Pvt. Ltd. demonstrates a proactive approach to environmental sustainability by curbing carbon intensity and adhering to global organic processing standards. To optimize energy consumption at its facility—which requires an annual power capacity of 4,000 KVA—the company has successfully transitioned 40% of its operations to renewable solar energy, significantly reducing its reliance on the state utility grid, Gujarat State Electricity Corporation Limited (GSECL). Further validating its commitment to sustainable manufacturing and strict raw material traceability, the enterprise strictly complies with global ecological standards, holding the Organic Content Standard (OCS) - Version 3.0 certification (Scope Certificate Number: CU1421960OCS-2026-00025534, valid until March 11, 2027). Verified and issued by Control Union Certifications (License Number: CB-CUI-1421960), this eco-certification guarantees complete supply chain integrity across its primary low-impact spinning processes (PR0027) and greige yarns product category (PC0030) at its Khijadiya Nana manufacturing facility. 

By adhering to the OCS standard, the company guarantees the integrity of organic material content from the raw fiber stage to the final yarn product. This minimizes the use of hazardous substances, promotes bio-diversity, and ensures complete supply chain transparency for environmentally conscious global markets. 

Social (S) : 

Haripriya Spinning Mill Private Limited maintains an adequate social governance framework focused on human capital optimization, safe workplace infrastructure, and gender equity. The company ensures a secure, inclusive, and legally aligned operational ecosystem by strictly conforming to the Factories Act, 1948, which effectively mitigates labor risks and guarantees high occupational health and safety standards. This regulatory commitment is supported by a structured, multi-tiered workforce of 253 personnel systematically deployed to optimize production workflows, establish clear internal accountability, and drive operational excellence. Furthermore, the company champions diversity within a traditionally male-dominated heavy industrial sector by maintaining a progressive demographic balance of 30% female and 70% male personnel. By offering structured employment, equal professional advancement avenues, and a safe, non-discriminatory workspace, the enterprise actively enhances local community livelihoods while building a resilient, low-turnover human resource foundation. 

Governance (G):

Haripriya Spinning Mill Private Limited maintains a highly disciplined corporate governance framework rooted in strict regulatory alignment, operational safety oversight, and verified financial transparency under the executive leadership of Mr. Hareshbhai Kanjibhai Ranipa. The company eliminates structural and operational liabilities by maintaining absolute conformity with the Factories Act, 1948 under Factory License No. 55000, with all site boundaries and manufacturing limits formally validated by the Joint Director of Industrial Safety and Health (ISH), Rajkot Region. Furthermore, to enforce robust internal controls and protect multi-stakeholder interests, the enterprise subjects its financial disclosures to rigorous independent external audits executed by J.G. UNADAKAT & CO. (Chartered Accountants). Every statutory audit and financial filing is secured with a Unique Document Identification Number (UDIN), guaranteeing uncompromised financial integrity, absolute legal compliance, and a highly resilient corporate risk mitigation profile. 

 

KEY FINANCIAL INDICATORS (Standalone)

Key Parameters	Units	FY 23 - 24 (Audited)	FY 24 - 25 (Audited)	FY 25 - 26 (Provisional)
Operating Revenue	Rs.Crs.	3.12	306.66	371.32
EBITDA	Rs.Crs.	0.28	27.42	35.38
PAT	Rs.Crs.	-1.24	2.86	12.01
Tangible Net Worth	Rs.Crs.	58.76	61.62	73.63
Total Debt / Tangible Net Worth	Times	1.88	2.34	1.60
Current Ratio	Times	1.21	1.02	1.72

KEY COVENANTS OF THE FACILITY RATED

The terms of sanction include standard covenants applicable for such facilities. The entity should achieve or maintain the DSCR, ISCR and Debt to Equity key Ratios as per the projections or CMA and any adverse deviation in these three key ratios more than 10% will, allow penalty.

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

Not Applicable

ANY OTHER INFORMATION

Not Applicable.

RATING HISTORY FOR LAST THREE YEARS (including withdrawal and suspended)

Facilities	Current Rating  (2026)			2025		2024		2023
Type	Tenure	Amount (Rs.Crs.)	Rating	Date	Rating	Date	Rating	Date	Rating
Fund Based	LT	119.50	BWR BBB-/Stable (Assignment)	NA	NA	NA	NA	NA	NA
Non Fund Based	LT	7.25	BWR BBB-/Stable (Assignment)	NA	NA	NA	NA	NA	NA
Grand Total		126.75	(Rupees One Hundred Twenty Six Crores and Seventy Five lakhs Only)

Hyperlink/Reference to applicable Criteria

• General Criteria
• Approach to Financial Ratios
• Manufacturing Company

Analytical Contacts
Likith M S Rating Analyst likith.ms@brickworkratings.com	Suryanarayan N Associate Director - Ratings suryanarayan.n@brickworkratings.com
Media Contact | media@brickworkratings.com	Client Support | clientsupport@brickworkratings.com

SL.No.	Name of the Bank/Lender	Type Of Facilities	Long Term(Rs.Crs.)	Short Term(Rs.Crs.)	Total(Rs.Crs.)	Complexity of the Instrument
1	Punjab National Bank	Term Loan - Out-standing	102.00	_	102.00	Simple##
2	Punjab National Bank	Cash Credit - Sanctioned	17.50	_	17.50	Simple##
3	Punjab National Bank	Bank Guarantee - Sanctioned	7.25	_	7.25	Simple##
Total			126.75	0.00	126.75
TOTAL (Rupees One Hundred Twenty Six Crores and Seventy Five 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.