RATING RATIONALE
14Sep2021

Arise Automotives Pvt Ltd.

Brickwork Ratings reaffirms the ratings for the Bank Loan Facilities of Rs. 33.31 Crs. of Arise Automotives Pvt Ltd.

Particulars
Facilities** Amount (Rs.Crs.) Tenure Rating#
Previous Present Previous
(15 Oct 2020)
Present
Fund Based 32.07 33.31 Long Term BWR B+ Stable
Reaffirmation/ISSUER NOT COOPERATING*
BWR B + /Stable
Reaffirmation
Grand Total 32.07 33.31 (Rupees Thirty Three Crores and Thirty One 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

BWR has reaffirmed the long term rating of  “BWR B+ with “Stable” outlook for the bank loan facilities of Arise Automotives Private Limited (‘AAPL’ or ‘the Company’).

The rating draws strength from the experienced promoters and its association with Hyundai India, and moderate financial risk profile. However, the rating is constrained by high gearing level & low current ratio, geographic concentration risk, and competition in the industry

The rating outlook has been assigned as "Stable" as BWR believes that Arise Automotives Private Limited  business risk profile 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 there is improvement in gearing level  and profitability. The rating outlook may be revised to 'Negative' if there is any deterioration in financial risk profile or any liquidity issues.

KEY RATING DRIVERS

Credit Strengths:


Credit Risks:

RATING SENSITIVITIES

Going forward, the ability of the company  to improve its gearing level  and maintaining adequate liquidity will remain the key rating sensitivities.

Positive: The rating may be upgraded if the company is able to improve its profitability margins, and improvement in  gearing levels.

Negative :The rating may be downgraded if inter alia, there is any deterioration in financial risk profile, fails to maintain adequate liquidity or on account of any unforeseen unfavourable events.

LIQUIDITY INDICATORS - Stretched

(1) The company  has no associate concerns or subsidiary concerns.

(2) The company   has cash & Bank  balances in FY20 (Audited)  is Rs 0.55 Crs in FY20 (Audited).

(3) The  company   has average utilisation of 99% of their cash credit  limit  from last six months.

(4) The company  has long term debt of Rs. 1.64  crs as at FY20 (Audited)  which comprises of term Loan   of  Rs 1.64 cr in FY20 (Audited). The company has net cash accruals of Rs 1.54 crores against the current portion of long term debt of Rs 0.49 crores in FY20 (Audited).

(5) The company   has  Interest service coverage ratio of 1.36  times and  Debt Service  Coverage Ratio of 1.25 times in FY20(Audited).

(6) The current ratio has been 0.91 Times  as at FY20 (Audited).

(7)  The company has conversion cycle of 85 days in FY20 (Audited).

ABOUT THE ENTITY

The company was incorporated on 23.08.2013. The company has been founded by Mr Sajad Ahmed Beigh, Mr Omar Ismail Beigh, and Mr Altaf Hussain Beigh, with commercial commencing in the year 2013, and is an authorised dealer of Hyundai Cars. The company is presently operating at Tengpora, and having further showrooms at Batmaloo (Srinagar), Sangrama Sopore, Bumhama Kupwara & Handwara. All the showrooms are on rented premises.

KEY FINANCIAL INDICATORS (Standalone)
Key Parameters Units FY 19-20
(Audited)
FY 18-19
(Audited)
Operating Revenue Rs.Crs. 108.58 140.33
EBITDA Rs.Crs. 6.01 6.30
PAT Rs.Crs. 0.09 1.09
Tangible Net Worth Rs.Crs. 4.27 4.18
Total Debt/Tangible Net Worth Times 8.31 7.37
Current Ratio Times 0.91 0.93

STATUS OF NON-COOPERATION WITH PREVIOUS CRA

N.A.

RATING HISTORY FOR THE PREVIOUS THREE YEARS (including withdrawal and suspended)
Facilities Current Rating (2021) 2020 2019 2018
Type Tenure Amount
(Rs.Crs.)
Rating Date Rating Date Rating Date Rating
Fund Based LT 33.31
BWR B+/Stable
(Reaffirmation)
15Oct2020
BWR B+ Stable
(Reaffirmation/ISSUER NOT COOPERATING*)
11Jul2019
BWR B+ Stable
(Upgrade)
16Apr2018
BWR B Stable
(Assigned)
Grand Total 33.31 (Rupees Thirty Three Crores and Thirty One lakhs Only)
COMPLEXITY LEVELS OF THE INSTRUMENTS - NA

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

Aman sharma

Rating Analyst Board : +91 172 5032 295 / 6 aman.s@brickworkratings.com

V.K.Kukreja

Associate Director - Ratings Board : +91 11 2341 2232 kukreja.vk@brickworkratings.com
1-860-425-2742 | media@brickworkratings.com
Arise Automotives 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 Jammu and Kashmir Bank Cash CreditSanctioned 32.00 _ 32.00
2 Jammu and Kashmir Bank Term LoanSanctioned 1.31 _ 1.31
Total 33.31 0.00 33.31
TOTAL (Rupees Thirty Three Crores and Thirty One lakhs Only)
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About Brickwork Ratings

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