RATING RATIONALE
23Feb2022

TMI Healthcare Pvt Ltd

Brickwork Ratings reaffirms the rating for the Bank Loan Facilities of Rs. 27.10 Crs. of TMI Healthcare Pvt Ltd

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(24 Nov 2020)
Present
Fund Based 18.00 27.10 Long Term BWR BB/Stable
Reaffirmation
BWR BB /Stable
Reaffirmation
Grand Total 18.00 27.10 (Rupees Twenty Seven Crores and Ten 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) has reaffirmed the long term rating at "BWR BB/Stable" for the bank loan facilities amounting Rs 27.10 Crores of TMI Healthcare Pvt Ltd.
 
The scale of operations had been adversely effected in FY21 due to Covid19 pandemic. The profitability margins also remain thin with a weak financial risk profile in FY21. The rating is also constrained by modest scale of operations, high gearing and low debt protection metrics in FY21. However the company has infused funds in the current FY22 with Pratithi Investment Trust picking up a 52% stake which will help improve the financial risk profile of the company by improving its gearing and debt protection metric due to repayment of loans with the funds infused. The company is projecting to achieve increased scale of operations in FY22. The reaffirmation of the rating also takes into account the CAPEX plans in pipeline for the current and next financial year.
 
The ‘Stable’ outlook indicates a low likelihood of rating change over the medium term. BWR expects that the business risk profile of TMI Healthcare Pvt Ltd will be maintained over the medium term. The rating outlook may be revised to 'Positive' in case the company improves its scale of operations and revenue. The rating outlook may be revised to 'Negative' if there is decrease in the revenue generation and deterioration in the financial risk profile of the company.

KEY RATING DRIVERS

Credit Strengths:


Credit Risks:

ANALYTICAL APPROACH - Standalone

For arriving at its ratings, Brickwork Ratings has adopted a standalone approach and applied its rating methodology as detailed in the Rating criteria below.
 
1. General Criteria (link - http://www.brickworkratings.com/download/Criteria-GeneralCriteria.pdf)
2. Approach to Financial Ratios (link - http://www.brickworkratings.com/download/Criteria-FinancialRatios.pdf)

RATING SENSITIVITIES

Going forward the ability of the company to improve its scale of operation, to increase its revenue and profitability margin, whist improving their overall financial risk profile will be the key rating sensitivities.
 
Positive: The ratings may be upgraded if revenue, profitability, gearing 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 INDICATORS - Stretched

Liquidity of the company remains stretched with the current ratio at 0.60 times as on 31 March 2021. The current ratio is expecting to improve slightly to 0.65 times as per provisional FY22 figures as on 31 December 2021. PAT remains negative in FY20, FY21 and as per the provisional FY22 figures. However PAT is expected to become positive as per projected FY22 financials.  NCA remains negative indicating stretched liquidity position of the company and is expected to become positive as per FY22 projections. Cash and Bank Balances remain low at Rs 0.64 Crores as on 31 March 2021 and is expected to improve to Rs  2.97 Crores as on 31 March 2022. OD limit utilization remains average at 62.3%. The debt protection metrics, ISCR and DSCR remains negative and is expected to improve to 3.43 times and 2.23 times respectively in FY22. Cash Conversion Cycle remains negative due to high payable days.

ABOUT THE ENTITY

Incorporated in June 2011 and based in Bengaluru, TMI Healthcare Private Limited operates multi-specialty hospitals under the name 'People Tree Hospitals'.  The first People Tree Hospital was inaugurated in Yeshwanthpur in 2013-2014. Thereafter, four hospitals were inaugurated under the name 'People Tree Hospitals’ at Dasarahalli (in 2015-16), Yelahanka (in 2016-17) and Hanumanthnagar (Meenakshi Hospitals, TMIHPL’s 99% direct control in the Partnership Firm) (in 2016). People Tree Hospital Chris was closed in May 2018.
 
Currently, the Company operates four hospitals at Yeshwanthpur, Dasarahalli, Yelahanka and Hanumanthnagar (Meenakshi Hospitals) in Bengaluru, with total 268 operational beds. Total number of Doctors at present is ~160 (90-100 permanent doctors and 50-60 visiting doctors). People Tree Hospitals have NABH Certifications (Safe I - TSM, Certified Medical Labs, Patient Safety & Quality of Care).
 
Specialities in the Hospital include: Orthopaedics, Women & Child Care, ENT, Head & Neck surgery, Dental care, Eyecare, Gastroenterology, Neurology, Nephrology, Respiratory, Cardiology, Paediatrics, Obstetrics, Psychiatric, Dermatology, Oncology, Pulmology etc. People Tree Hospitals have their own laboratories, pharmacies, ambulance facilities etc. The Hospitals are managed by experienced and professional team of doctors.

KEY COVENANTS OF THE FACILITY RATED

Nil


RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)
Facilities Current Rating (2022) 2021 2020 2019
Type Tenure Amount
(Rs.Crs.)
Rating Date Rating Date Rating Date Rating
Fund Based LT 27.10
BWR BB/Stable
(Reaffirmation)
NA
NA
24Nov2020
BWR BBStable
(Reaffirmation)
NA
NA
0.00
NA
NA
NA
21Jan2020
BWR BBStable
(Downgrade/ISSUER NOT COOPERATING*)
NA
NA
Grand Total 27.10 (Rupees Twenty Seven Crores and Ten lakhs Only)
Rating Advisory, as on 21Jan2021
Press Release, as on 21Jan2020
Brickwork Ratings (BWR) had assigned the rating of BWR BB (Stable) on 24 November 2020 for the bank loan facilities of Rs. 18.00 Crores availed by TMI Healthcare Pvt Ltd. The rating is now due for review and is under process. As more than12 months have lapsed since the last rating, BWR hereby informs that it has not been possible to review the rating within the stipulated time, mainly due to non-receipt of essential information required for review. If TMI Healthcare Pvt Ltd. continues to delay in providing the essential information, BWR will act suitably in accordance with the extant SEBI guidelines. This advisory should not be construed as a rating reaffirmation.

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

Nimmy Anand

Ratings Analyst nimmy.a@brickworkratings.com

Nagaraj K

Associate Director - Ratings Board : +91 80 4040 9940 nagaraj.ks@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
TMI Healthcare 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 Federal Bank Term LoanOut-standing _ _ 0.00
2 Federal Bank Term LoanOut-standing _ _ 0.00
3 Federal Bank Term LoanOut-standing _ _ 0.00
4 Federal Bank Term LoanOut-standing _ _ 0.00
5 Federal Bank Term LoanOut-standing _ _ 0.00
6 Federal Bank Term LoanOut-standing _ _ 0.00
7 Federal Bank Term LoanProposed _ _ 0.00
8 Federal Bank Cash CreditSanctioned _ _ 0.00
9 HDFC Bank Over DraftSanctioned 1.80 _ 1.80
10 HDFC Bank Over DraftSanctioned 0.20 _ 0.20
11 HDFC Bank Over DraftSanctioned 0.50 _ 0.50
12 HDFC Bank Term LoanOut-standing 1.21 _ 1.21
13 HDFC Bank Term LoanOut-standing 0.44 _ 0.44
14 HDFC Bank Term LoanOut-standing 1.36 _ 1.36
15 HDFC Bank Term LoanOut-standing 0.56 _ 0.56
16 HDFC Bank Term LoanOut-standing 1.00 _ 1.00
17 HDFC Bank Term LoanOut-standing 0.03 _ 0.03
18 Kotak Mahindra Bank Term LoanSanctioned 5.20 _ 5.20
19 Kotak Mahindra Bank Over DraftSanctioned 14.80 _ 14.80
Total 27.10 0.00 27.10
TOTAL (Rupees Twenty Seven Crores and Ten lakhs Only)
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