Raipur Power and Steel Limited August 21, 2018

Transcription

1 Ratings Long term Bank Short term Bank Total (Rupees Three hundred fifty four crore and sixty five lakhs only) Details of instruments/facilities in Annexure-1 Raipur Power and Steel Limited August 21, 2018 Amount Rating CARE D; ISSUER (Single D; ISSUER ) CARE D; ISSUER (Single D; ISSUER ) Rating Action cooperating; Revised from CARE BB; Negative Issuer Not Cooperating (Double B; Outlook: Negative; Issuer Not Cooperating) on the basis of best cooperating; Revised from CARE A4; Issuer Not Cooperating (A Four; Issuer Not Cooperating) on the basis of best Detailed Rationale & Key Rating Drivers CARE has been seeking from Raipur Power and Steel Limited (RPSL) to monitor the rating vide letters/ communications dated August 16, 2018; August 03, 2018; August 01, 2018; July 19, 2018 & July 12, 2018 and numerous phone calls. However, despite our repeated requests, the company has not provided the requisite for monitoring the rating. In line with the extant SEBI guidelines, CARE has reviewed the rating on the basis of the publicly which however, in CARE s opinion is not sufficient to arrive at a fair rating. The ratings on Raipur Power and Steel Limited s bank facilities will now be denoted as CARE D /CARE D; ISSUER. Users of this rating (including investors, lenders and the public at large) are hence requested to exercise caution while using the above rating. Detailed description of the key rating drivers The revision in the ratings takes into account ongoing delays in the servicing of the debt obligation. Key Rating Weaknesses Ongoing delays in debt servicing: There are ongoing delays in the servicing of the interest and principle repayments for the term loans availed. Furthermore, the cash credit limit has remained overdrawn for more than 30 days. Analytical approach: Standalone Applicable Criteria Policy in respect of Non-cooperation by issuer Criteria on assigning Outlook to Credit Ratings CARE s Policy on Default Recognition Financial ratios Non-Financial Sector Criteria for short term instruments CARE s methodology for manufacturing companies CARE s methodology for Steel manufacturing About the Company Incorporated in 2007, Raipur Power and Steel Limited (RPSL) is a closely held public limited company belonging to the Garg group of Ludhiana, Punjab. RPSL has its sole manufacturing facility located at Durg, Chhattisgarh, for manufacturing of sponge iron, ferro alloys (silicon manganese), billets, iron ore pellets, wire rods and hard black (HB) wires with annual 1 Complete definitions of the ratings are at and in other CARE publications *Issuer did not cooperate; Based on best 1 CARE Ratings Limited

2 capacities of 90,000 tonnes per annum (tpa), 32,000 tpa, 90,000 tpa, 3,00,00 tps, 90,000 tpa and 90,000 tpa, respectively, as on August 31, RPSL has two other group companies engaged in the steel industry, namely, Garg Industries Limited (GIL; CARE B+; / CARE A4; Issuer Not Cooperating) and Parth Concast Limited (PCL). GIL is engaged in the manufacturing of wire rods and has an installed capacity of 36,000 mtpa, as on March 31, 2017, at its manufacturing unit at Ludhiana, Punjab, while PCL is engaged in the manufacturing of billets and has an installed capacity of 90,000 mtpa, as on March 31, 2017, at its manufacturing unit at Durg, Chhattisgarh. Status of non-cooperation with previous CRA: CRISIL has suspended its rating vide press release dated April 01, 2016 on account of non-cooperation by Raipur Power and Steel limited with CRISIL s efforts to undertake a review of the outstanding ratings. ICRA has conducted the review on the basis of best and has classified the Raipur Power and Steel limited as Not cooperating vide its press release dated August 13, Any other : Not Applicable Rating History (Last three years): Please refer Annexure-2 Note on complexity levels of the rated instrument: CARE has classified instruments rated by it on the basis of complexity. This classification is at Investors/market intermediaries/regulators or others are welcome to write to care@careratings.com for any clarifications. Analyst Contact Name: Mr Sudeep Sanwal Tel: Cell: sudeep.sanwal@careratings.com **For detailed Rationale Report and subscription, please contact us at About CARE Ratings: CARE Ratings commenced operations in April 1993 and over two decades, it has established itself as one of the leading credit rating agencies in India. CARE is registered with the Securities and Exchange Board of India (SEBI) and also recognized as an External Credit Assessment Institution (ECAI) by the Reserve Bank of India (RBI). CARE Ratings is proud of its rightful place in the Indian capital market built around investor confidence. CARE Ratings provides the entire spectrum of credit rating that helps the corporates to raise capital for their various requirements and assists the investors to form an informed investment decision based on the credit risk and their own risk-return expectations. Our rating and grading service offerings leverage our domain and analytical expertise backed by the methodologies congruent with the international best practices. Disclaimer CARE s ratings are opinions on credit quality and are not recommendations to sanction, renew, disburse or recall the concerned bank facilities or to buy, sell or hold any security. CARE has based its ratings/outlooks on obtained from sources believed by it to be accurate and reliable. CARE does not, however, guarantee the accuracy, adequacy or completeness of any and is not responsible for any errors or omissions or for the results obtained from the use of such. Most entities whose bank facilities/instruments are rated by CARE have paid a credit rating fee, based on the amount and type of bank facilities/instruments. In case of partnership/proprietary concerns, the rating /outlook by CARE is based on the capital deployed by the partners/proprietor and the financial strength of the firm at present. The rating/outlook may undergo change in case of withdrawal of capital or the unsecured loans brought in by the partners/proprietor in addition to the financial performance and other relevant factors. 2 CARE Ratings Limited

3 Annexure-1: Details of Instruments/ Name of the Instrument Date of Issuance Coupon Rate Maturity Date Size of the Issue Rating along with Rating Outlook Fund-based - LT-Cash Credit CARE D; ISSUER from CARE BB; on the basis of best Non-fund-based - ST- Letter of credit Non-fund-based - ST- Bank Guarantees Fund-based - LT-Term Loan CARE D; ISSUER from CARE A4; ISSUER on the basis of best CARE D; ISSUER from CARE A4; ISSUER on the basis of best February *Issuer did not cooperate; Based on best CARE D; ISSUER from CARE BB; on the basis of best 3 CARE Ratings Limited

4 Annexure-2: Rating History of last three years Sr. No. Name of the Instrument/Bank 1. Fund-based - LT- Cash Credit 2. Non-fund-based - ST-Letter of credit 3. Non-fund-based - ST-Bank Guarantees 4. Fund-based - LT- Term Loan Current Ratings Type Amount Rating Outstanding LT CARE D; ISSUER from CARE BB; on the basis of best ST CARE D; ISSUER from CARE A4; ISSUER on the basis of best ST 0.20 CARE D; ISSUER from CARE A4; ISSUER on the basis of best LT CARE D; ISSUER from CARE BB; on the basis of best *Issuer did not cooperate; Based on best in Rating history in )CARE BB; 2)CARE BBB; 3)CARE BBB; (03-Aug-17) - 1)CARE A4; ISSUER 2)CARE A3+ 3)CARE A3+ (03-Aug-17) - 1)CARE A4; ISSUER 2)CARE A3+ - 1)CARE BB; 2)CARE BBB; in in CARE Ratings Limited

5 CONTACT Head Office Mumbai Ms. Meenal Sikchi Mr. Ankur Sachdeva Cell: Cell: meenal.sikchi@careratings.com ankur.sachdeva@careratings.com Ms. Rashmi Narvankar Mr. Saikat Roy Cell: Cell: rashmi.narvankar@careratings.com saikat.roy@careratings.com CARE Ratings Limited (Formerly known as Credit Analysis & Research Ltd.) Corporate Office: 4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern Express Highway, Sion (East), Mumbai Tel: Fax: care@careratings.com AHMEDABAD Mr. Deepak Prajapati 32, Titanium, Prahaladnagar Corporate Road, Satellite, Ahmedabad Cell: Tel: deepak.prajapati@careratings.com BENGALURU Unit No , 11th Floor, Prestige Meridian II, No. 30, M.G. Road, Bangalore Cell: Tel: , CHANDIGARH Mr. Anand Jha SCF No , First Floor, Phase 11, Sector 65, Mohali Chandigarh Cell: / Tel: /01 anand.jha@careratings.com CHENNAI Unit No. O-509/C, Spencer Plaza, 5th Floor, No. 769, Anna Salai, Chennai Cell: Tel: / 0811 COIMBATORE T-3, 3rd Floor, Manchester Square Puliakulam Road, Coimbatore Tel: / JAIPUR Mr. Nikhil Soni 304, Pashupati Akshat Heights, Plot No. D-91, Madho Singh Road, Near Collectorate Circle, Bani Park, Jaipur Cell: Tel: / 14 nikhil.soni@careratings.com KOLKATA Ms. Priti Agarwal 3rd Floor, Prasad Chambers, (Shagun Mall Bldg.) 10A, Shakespeare Sarani, Kolkata Cell: Tel: priti.agarwal@careratings.com NEW DELHI Ms. Swati Agrawal 13th Floor, E-1 Block, Videocon Tower, Jhandewalan Extension, New Delhi Cell: Tel: swati.agrawal@careratings.com PUNE Mr.Pratim Banerjee 9th Floor, Pride Kumar Senate, Plot No. 970, Bhamburda, Senapati Bapat Road, Shivaji Nagar, Pune Cell: Tel: pratim.banerjee@careratings.com CIN - L67190MH1993PLC HYDERABAD Mr. Ramesh Bob 401, Ashoka Scintilla, , Himayat Nagar, Hyderabad Cell : Tel: ramesh.bob@careratings.com 5 CARE Ratings Limited