GMR Hotels and Resorts Limited

Transcription

1 GMR Hotels and Resorts Limited ICRA has assigned an LBBB(SO) (pronounced as L Triple B Structured Obligation) rating to the Rs. 140 crore term loan programme of GMR Hotels and Resorts Limited (GHRL). The letters SO in parenthesis suffixed to the rating symbol stand for Structured Obligation. An SO rating is specific to the rated issue, its terms, and its structure. SO ratings do not represent ICRA s opinion on the general credit quality of the issuers concerned. The LBBB(SO) rating is solely based on the strength of the guarantee provided by GMR Hyderabad International Airport Limited (GHIAL, rated LBBB/A3+ by ICRA). The LBBB(SO) rating addresses the servicing of the rated facilities to happen as per the terms of the underlying loan and the guarantee arrangement and the rating assumes that the guarantee will be duly invoked, as per the terms of the underlying loan and guarantee agreements, in case there is a default in payment by the borrower. Company Profile: GHRL, a 100% subsidiary of GHIAL, owns and operates a 305 room 4-Star business hotel at the GMR Hyderabad Airport, within about 2 kms from the passenger terminal. The hotel division was initially part of GHIAL and was subsequently demerged into GHRL w.e.f. April 01, The hotel is being managed by the Accor Group under the Novotel brand. For the year , GHRL reported a net income of Rs crore and a net loss of Rs. 8.3 crore; for the nine months ended December 31, 2010, net income and net loss were at Rs crore and Rs crore respectively. Guarantor Company Profile: GHIAL operates the Rajiv Gandhi International Airport located at Shamshabad, Hyderabad which commenced commercial operations on March 23, GHIAL s sponsors include GMR Infrastructure Limited (63% holding), Malaysia Airport Holdings Berhad (MAHB) (11% holding), Airports Authority of India (AAI) (13% holding), and Government of Andhra Pradesh (GoAP) (13% holding). GHIAL has a 30-year concession for the maintenance and operation of the Shamshabad airport, extendable for a further 30 years at its option. The airport was constructed at a total cost of Rs crore with an initial handling capacity of 12 million passengers per annum. The Master Plan envisages a terminal capacity of 40 million passengers per annum by the end of the 30-year term of the Concession Agreement. In the period April 2009-March 2010, the airport handled 6.5 million passengers. For the year , GHIAL recorded an income of Rs. 452 crore and a net loss of Rs. 107 crore. For further details please contact: Analyst Contacts: Mr. Vikas Aggarwal (Tel No ) vikas@icraindia.com Relationship Contacts:, (Tel. No / ) jayantac@icraindia.com For complete rating scale and definitions please refer to ICRA's website or other ICRA Rating Publications PRESS RELEASE Page 1

2 Copyright, 2011, ICRA Limited. All Rights Reserved. Contents may be used freely with due acknowledgement to ICRA ICRA ratings should not be treated as recommendation to buy, sell or hold the rated debt instruments. The ICRA ratings are subject to a process of surveillance which may lead to a revision in ratings. Please visit our website ( or contact any ICRA office for the latest information on ICRA ratings outstanding. All information contained herein has been obtained by ICRA from sources believed by it to be accurate and reliable. Although reasonable care has been taken to ensure that the information herein is true, such information is provided as is without any warranty of any kind, and ICRA in particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness or completeness of any such information. All information contained herein must be construed solely as statements of opinion and ICRA shall not be liable for any losses incurred by users from any use of this publication or its contents PRESS RELEASE Page 2

3 Registered Office ICRA Limited 1105, Kailash Building, 11th Floor, 26, Kasturba Gandhi Marg, New Delhi Tel: , Fax: Corporate Office Mr. Vivek Mathur Mobile: Building No. 8, 2nd Floor, Tower A, DLF Cyber City, Phase II, Gurgaon Ph: (D), / (B) Fax; Mumbai Mobile: / rd Floor, Electric Mansion, Appasaheb Marathe Marg, Prabhadevi, Mumbai Ph : / 1053/ 1062/ 1074/ 1086/ 1087 Fax : Chennai Mr. K. Ravichandran Mobile: / ravichandran@icraindia.com Kolkata Ms. Anuradha Ray Mobile: / anuradha@icraindia.com A-10 & 11, 3rd Floor, FMC Fortuna, 234/ 3A, A.J.C. Bose Road, Kolkata Tel: / 8839/ Fax: Bangalore 2 nd Floor.,Vayudhoot Chambers, Trinity Circle, M.G.Road, Bangalore Tel: / 4049 Fax: th Floor, Karumuttu Centre, 498 Anna Salai, Nandanam, Chennai Tel: / 94, / 9659/ 8080, , Fax: Ahmedabad 907 & 908 Sakar -II, Ellisbridge, Ahmedabad Tel: , , , TeleFax: Hyderabad Mr. M.S.K. Aditya Mobile: adityamsk@icraindia.com Pune 5A, 5th Floor, Symphony, S.No. 210, CTS 3202, Range Hills Road, Shivajinagar,Pune Tel : (91 20) ; Fax : (91 20) , CONCOURSE, 3rd Floor, No , Ameerpet, Hyderabad Tel: /7251 Fax: PRESS RELEASE Page 3

4 Saya Automobiles Limited Rating History Instrument Amount (Cr) Rating Rating History Cash Credit Non Fund Based Limits Unallocated As on Feb 2011 As on Feb 2011 Sep 2010 Sep (Enhanced from 20.0) LBB/stable LBB/stable^ LBB/stable 4.5 A4 A4^ A4 3 (Reduced from 15.5) Total 30 ^Rating suspended due to insufficient information LBB/stable LBB/stable^ LBB/stable ICRA has reinstated LBB (pronounced L double B) rating to Rs.25.5 crore, 1 long-term, fund based bank facilities of Saya Automobiles Limited (SAL). ICRA has also reinstated A4 (pronounced A four) rating to Rs 4.5 crore shortterm, non-fund based bank facilities of the company. The outlook on the long-term rating is stable. The ratings reaffirmation of the revised limits takes into account SAL s long standing relationship with MSIL, being one of oldest MSIL dealers in Delhi, and experienced promoters with an established track record of operations. The ratings factor in the thin profit margins of SAL, which is inherent in the automotive dealership business; and limited financial flexibility on account of weak cash flows. The ratings also take into account the company s scale of operations which continues to be moderate, and increasing short term borrowings which is likely to deteriorate their financial risk profile even further. Company Profile SAL is an authorized MSIL dealer based in National Capital Region (NCR) and is engaged in sales and service of vehicles along with sale of spare parts.. Spread over an area of 1406 square yards the company has a sales cum service outlet at Azadpur (Delhi). SAL also has two other repair workshops in Delhi at Siraspur and Ashram apart from a Maruti True Value used cars sales outlet in Gurmandi.The promoters of SAL are the Handa family with Mr. Ramesh Handa as the Managing Director, with his wife as director The promoters of SAL have also entered the dealership of commercial vehicles of Hino Motors Limited, Japan (Hino) through- Saya Automotive India Limited (SAIL). SAIL began operations in August 2009 and the showroom cum workshop for the same is located adjacent to the SAL s existing MSIL repair workshop at Siraspur (Delhi). The Handa family is also involved in the fitment of CNG kits (for both petrol and diesel variants) in cars and buses though another company- Nugas Technologies India Private Limited February Lakh = 1 Crore = 10 million For complete rating scale and definitions, please refer to ICRA s website or other ICRA Rating Publications. PRESS RELEASE Page 4

5 For further details please contact: Analyst Contacts: Subrata Ray (Tel. No ) Relationship Contacts: Vivek Mathur (Tel. No ) Copyright, 2011, ICRA Limited. All Rights Reserved. Contents may be used freely with due acknowledgement to ICRA ICRA ratings should not be treated as recommendation to buy, sell or hold the rated debt instruments. The ICRA ratings are subject to a process of surveillance which may lead to a revision in ratings. Please visit our website ( or contact any ICRA office for the latest information on ICRA ratings outstanding. All information contained herein has been obtained by ICRA from sources believed by it to be accurate and reliable. Although reasonable care has been taken to ensure that the information herein is true, such information is provided as is without any warranty of any kind, and ICRA in particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness or completeness of any such information. All information contained herein must be construed solely as statements of opinion and ICRA shall not be liable for any losses incurred by users from any use of this publication or its contents PRESS RELEASE Page 5

7 Aarti Steels Limited Rating History Instrument Amount Amount Outstanding In Rs. Crore In Rs. Crore As on December 2009 Rating As on February 2011 Term Loans LBBB+ LBBB+ Fund Based Limits LBBB+ LBBB+ Non-Fund Based Limits A2+ A2+ Unallocated LBBB+ LBBB+ ICRA has re-affirmed the long-term rating of LBBB+ (pronounced L triple B plus) for the Rs crore 1 fund based limits and term loans of Aarti Steels Limited (ASL). ICRA has also re-affirmed the short term rating of A2+ (pronounced A two plus) for the Rs. 43 crore non-fund based limits of the company. The ratings reaffirmation takes into account ASL s experienced management, its long track record in the steel industry and its established brand-image as reflected in its reputed client base in the auto-component industry. The ratings continue to derive comfort from ASL s operational efficiencies with backward integration into manufacturing of sponge-iron, steel billets and captive power-generation; and steps taken by the company over the years to improve its product-mix by adding value-added products such as wires, rounds, etc. The ratings also take into account the expected improvement in the revenues and the profitability through its new 50 MW independent power plant (IPP) in Cuttack. However the ratings are constrained by the relatively high gearing of the company and its significant expansion plans. While assigning the rating, ICRA has also taken into consideration the inherent cyclical and intensely competitive nature of the industry which is escalated by the fact that company does not have access to captive raw material sources including coal and iron ore. Also the absence of firm off-take arrangements for the IPP is a cause of concern. However going forward, ICRA expects ASL s cash flows to remain strong on account of integrated operations, reputed-client base and its improving product-mix which will translate into adequate debtprotection indicators. Company Profile Aarti Steels Limited (ASL), incorporated in 1979, is a public limited company engaged in the business of manufacturing & marketing of iron & steel products like rounds, steel wires, billets and ferro alloys. Company started its operations with a rolling mill at Ludhiana (Punjab) and has over the years undertaken several expansions in the unit by setting up manufacturing facilities including wire-rod rolling mill, induction furnaces, oxygen gas plant, steel wire drawing unit, tyre bead wire unit, electric arc furnace and a 6 Mega-Watt (MW) captive power plant. Further, in the year 2005, company also set-up steel and power plant at Cuttack (Orissa) for manufacturing spongeiron (installed capacity of 0.16 MTPA), steel-billets (0.18 MTPA), ferro-alloys (25,000 tpa) and a 40 MW captive power-plant. The company has also established a 50 MW IPP which became operational in March Lakh = 1 Crore = 10 million For complete rating scale and definitions, please refer to ICRA s website or other ICRA Rating Publications. PRESS RELEASE Page 7

8 Recent Results ASL reported a net profit after tax of Rs crore on an operating income of Rs crore for FY For further details, please contact: February 2011 Analyst Contact: Mr. Vikas Aggarwal, (Tel. No ) vikas@icraindia.com Relationship Contact: Mr. Vivek Mathur, (Tel. No ) vivek@icraindia.com Copyright, 2011, ICRA Limited. All Rights Reserved. Contents may be used freely with due acknowledgement to ICRA ICRA ratings should not be treated as recommendation to buy, sell or hold the rated debt instruments. The ICRA ratings are subject to a process of surveillance which may lead to a revision in ratings. Please visit our website ( or contact any ICRA office for the latest information on ICRA ratings outstanding. All information contained herein has been obtained by ICRA from sources believed by it to be accurate and reliable. Although reasonable care has been taken to ensure that the information herein is true, such information is provided as is without any warranty of any kind, and ICRA in particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness or completeness of any such information. All information contained herein must be construed solely as statements of opinion and ICRA shall not be liable for any losses incurred by users from any use of this publication or its contents PRESS RELEASE Page 8

10 Rating History Manipal Academy of Higher Education Amount in Rs. crore as on Rating Outstanding Previous Ratings March 31, 2010 February 2011 November 2009 Term Loans LAA- LA+ ICRA has upgraded the long-term rating assigned to the Rs 200 crore term loans of Manipal Academy of Higher Education (MAHE) from LA+ (pronounced as L A plus) to LAA- (pronounced as L double A minus). The long-term rating carries stable outlook. The rating revision takes into account the favourable developments in the trust s ongoing dispute with the Medical Council of India (MCI), the various measures proposed to be taken by the Indian Government to improve the regulatory scenario governing the Indian higher education sector, healthy occupancy levels posted by the trust s engineering college despite a significant seat addition, and the improvement in MAHE s operating profitability during FY10. The rating is further supported by the established track record of MAHE, spanning over 50 years, in the Indian education sector, good reputation of its two key colleges ensuring healthy occupancy levels, an eminent Board of Trustees and the overall favourable outlook for higher education in India. The rating also factors in its comfortable financial risk profile characterised by healthy credit metrics, stable cash flows and satisfactory liquidity profile. The rating is, however, constrained by the trust s dependence on its Medical college for a significant portion of its profits, which is further aggravated by regulatory issues with the MCI that can negatively impact cash flows in case of a reduction in student intake. The rating is also limited by the threat from increasing student intake at competing colleges, particularly due to the relatively high fee charged by MAHE. Company profile Manipal Academy of Higher Education (MAHE), one of the pioneers of self-financed education in India, owns and operates fourteen colleges in Karnataka, most of them located in the town of Manipal. The trust was formed in 1993, when the Government of India granted it "Deemed university" status through an Act of UGC. Currently, MAHE has more than 16,500 students, and offers about 278 courses through its constituent colleges. MAHE includes in its portfolio, Kasturba Medical College and Manipal Institute of Technology, which are ranked among the best in their respective fields. Recent results For the year ended March 31, 2010, MAHE reported an operating income of Rs crore and a surplus of Rs crore. The operating income increased by 24% over FY09, helped by higher student intake, while surplus was lower compared to FY09 figure of Rs 47.6 crore on account of a change in depreciation policy. For further details please contact: Analyst Contacts: Mr. Vikas Aggarwal (Tel No ) vikas@icraindia.com Relationship Contacts:, (Tel. No / ) jayantac@icraindia.com For complete rating scale and definitions please refer to ICRA's Website or other ICRA Rating Publications PRESS RELEASE Page 10

11 Copyright, 2011, ICRA Limited. All Rights Reserved. Contents may be used freely with due acknowledgement to ICRA ICRA ratings should not be treated as recommendation to buy, sell or hold the rated debt instruments. The ICRA ratings are subject to a process of surveillance which may lead to a revision in ratings. Please visit our website ( or contact any ICRA office for the latest information on ICRA ratings outstanding. All information contained herein has been obtained by ICRA from sources believed by it to be accurate and reliable. Although reasonable care has been taken to ensure that the information herein is true, such information is provided as is without any warranty of any kind, and ICRA in particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness or completeness of any such information. All information contained herein must be construed solely as statements of opinion and ICRA shall not be liable for any losses incurred by users from any use of this publication or its contents PRESS RELEASE Page 11

13 GVPR Engineers Limited Rating History Instrument Amount Amount Outstanding In Crore In Crore Rating Outstanding As on December 10 Previous Rating As on September 09 Cash Credit LBBB LBBB- Non fund based limits A3+ A3 ICRA has upgraded the long-term rating assigned to the Rs 132 crore cash credit limits (enhanced from Rs crore) of GVPR Engineers Limited to LBBB (pronounced L triple B) from LBBB- (pronounced L triple B minus). The rating carries a stable outlook. ICRA has also upgraded the short-term rating assigned to the Rs 275 crore (enhanced from Rs crore) non fund based limits of GVPR Engineers to A3+ (pronounced A three plus) from A3 (pronounced A three). The revision in the ratings takes into account the improved financial risk profile of the company, satisfactory execution record till date, improvement in the company s working capital intensity, which is also reflected in H1 FY11 numbers, and GVPR s healthy order book that provides visibility of revenues for the next two years. ICRA also draws comfort from the strong demand potential for companies engaged in Engineering, procurement and construction (EPC) of electrical projects. The ratings are also supported by GVPR s experienced management, a strong client base, and low gearing level of 0.38 times as on March 31st, However, the ratings are constrained by the higher execution risk for larger and complex projects that GVPR is bidding for (GVPR has previously been engaged in low value and moderately complex jobs), high geographic concentration with majority of the pending order book being concentrated in Andhra Pradesh (38%) and high exposure to Government and semi government clients. However, the company s exposure to Andhra Pradesh is partially mitigated by the World Bank funding of a significant number of projects, which ensures regular payments. ICRA also takes into account the delay in some of the undergoing projects on account of land-acquisition and encroachment issues, which might restrain the revenues of the company in the near term. Going forward, ICRA expects GVPR to be able to post healthy growth in its top-line, given its strong order-book and its efforts to capitalise on the infrastructure spending planned in the lift irrigation and electrical works space. However, the capital expenditure required to support the substantial growth in the order book is expected to result in an increase in debt levels, although to a satisfactory level. Company Profile GVPR Engineers Limited was incorporated in the early sixties as a proprietary firm by Mr. G.S.P. Veera Reddy as its Managing Director and started with executing civil engineering projects. Subsequently, it was converted into a limited company in December Presently, the company is actively managed promoted by Mr. G.S.P. Veera Reddy and his family members. Also, over a period of time it diversified from civil construction projects into engineering, procurement and construction services for electrical works. Currently, GVPR s operations can be broadly divided into five segments viz. Water supply & lift Irrigation projects, Earth Bund projects, construction of Roads/bridges/flyovers, construction of buildings, mining projects and EPC of T&D lines & substations. PRESS RELEASE Page 13

14 Recent Results GVPR reported a profit after tax (PAT) of Rs crore in FY10 on an operating income of Rs crore, with net profits increasing over FY09 due to a substantial rise in operating income (compared to Rs crore in FY09). The revenue growth was supported by execution of relatively larger projects, although profit margins have suffered due to initial expenses on design and drawings. For further details please contact: Analyst Contacts: Vikas Agarwal (Tel. No ) vikas@icraindia.com Relationship Contacts: Jayanta Chatterjee (Tel. No ) jayantac@icraindia.com February 2011 Copyright, 2011, ICRA Limited. All Rights Reserved. Contents may be used freely with due acknowledgement to ICRA ICRA ratings should not be treated as recommendation to buy, sell or hold the rated debt instruments. The ICRA ratings are subject to a process of surveillance which may lead to a revision in ratings. Please visit our website ( or contact any ICRA office for the latest information on ICRA ratings outstanding. All information contained herein has been obtained by ICRA from sources believed by it to be accurate and reliable. Although reasonable care has been taken to ensure that the information herein is true, such information is provided as is without any warranty of any kind, and ICRA in particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness or completeness of any such information. All information contained herein must be construed solely as statements of opinion and ICRA shall not be liable for any losses incurred by users from any use of this publication or its contents PRESS RELEASE Page 14

16 SKS Microfinance Limited India Microfinance Loan Receivables Trust January 2011 ICRA has assigned a conditional rating of A1(SO) to PTC Series A1 issued by India Microfinance Loan Receivables Trust January 2011, backed by a pool of micro loans originated by SKS Microfinance Limited (SKSML). Table 1: Rating Summary Description Amount (Rs. Crore 1 ) Payout Maturity Rating PTC Series A Dec 2011 A1(SO)! Originator s Residual Share 8.72 Unrated Total A1 is the highest credit-quality rating assigned by ICRA to short-term debt instruments. The instruments rated in this category carry the lowest credit risk. The conditional rating is subject to the fulfillment of all conditions under the structure, due diligence audit of the pool, review by ICRA of the documentation pertaining to the transaction and SKSML furnishing to ICRA an independent legal opinion on the transaction from the transaction legal counsel. The rating is based on the assumption that the transaction is valid under the prevalent regulatory guidelines on securitisation.the conditional rating is based on the strength of cash flows from the selected pools of contracts; the credit enhancement available in the form of cash collateral of 10.75% of the pool principal, principal subordination of 15.00% of the pool principal for PTC A1, subordination of the entire Excess Interest Spread (EIS) in the structure, and the integrity of the legal structure. The selected pool consists of unsecured Microfinance loans (not more than Rs. 50,000 each), and is characterized by moderate seasoning, short residual tenure of 11 months and no overdue on the selected loans as of date. The current pool comprises of Group Loans only. According to the transaction structure, the entire pool of selected contracts will be assigned to a Special Purpose Vehicle (Trust) at par. The Trust will issue a single series of PTCs viz. PTC Series A1, backed by the receivables. The upfront purchase consideration to be paid by PTC A1 to the Trustee will be 85% of the total pool principal i.e. Rs crore. The Originator will have a beneficial subordinated residual share of 15% of the pool principal, which the Trust will hold for the benefit of the Originator. Though the pool would be receiving cashflows on a weekly basis, payouts to the PTCs would be made on a monthly basis. On a monthly basis, only the interest payment is promised to PTC A1, whereas the principal repayment to PTC A1 is promised on the last payout date. However, the balance monthly excess cashflow excess of collections from the loan pool over the scheduled PTC A1 payouts will be used to accelerate the principal amortisation of PTC A1. Any payment to the Originator against the residual share will be made only after all the payouts to PTC A1 are fully made. The Ordinance (which was subsequently adopted as an Act in December 2010) issued by the Andhra Pradesh (AP) government in October 2010, has had an adverse impact in the short term on the activities of MFIs operating out of the state. While the asset quality in other states has largely remained unaffected, banks have restricted the flow of funds to MFIs, particularly those operating out of AP. While the recommendations of the Malegam Committee Lakh = 1 Crore = 10 million For complete rating scale and definitions please refer to ICRA's Website or other ICRA Rating Publications On Jun 3, 2010, RBI has put out draft guidelines relating to certain issues like minimum holding period and minimum retention requirement for securitisation transactions by NBFCs and has invited comments on the same. However, the said guidelines are at a draft stage right now. ICRA expects to get a legal opinion on these lines, in addition to the true sale opinion on the transaction. Given to borrowers who are organised in groups of five, where each group member is responsible for repayment by the other group members. These loans are given for income-generating purpose only. PRESS RELEASE Page 16

17 (released on January 2011) have been largely acknowledged to have several long-term positives for the sector, there are several operational challenges in the short to medium term. Also, the RBI s final stance on the same would be a key factor. Given this scenario, banks are continuing to watch the situation and are taking a cautious view while lending to MFIs. Given the nature of the business, the regular flow of funds is crucial to maintain as well as grow the business operations. Hence, SKSML s ability to continue to grow its portfolio will be dependent on availability of funds from banks in the light of recent developments. The rating of the Series A1 PTCs is constrained owing to the factors discussed above. Based on the analysis of the past performance of SKSML s microfinance loan portfolio and the expected future performance of the selected pool of loans, ICRA believes that the credit support provided has been adequately sized to cover the credit / liquidity risk in the transaction. About the Originator SKSML was established as a non-governmental organisation (NGO) under the name Swayam Krishi Sangama in 1998 by Dr. Vikram Akula. This not-for-profit society was subsequently renamed SKS Microfinance Limited (SKSML) and registered as an NBFC in January At present, SKSML is engaged in micro-finance lending activities, providing credit to economically backward women mainly in rural, urban and semi-urban areas through a joint liability mechanism. SKSML offers various loan products to suit the loan requirements of its borrowers. Income Generation loans and Mid-Term Loans (given under group lending mechanism) have been the primary focus of SKSML. SKSML currently serves 77.1 lakh members across 19 Indian States, with about 29.9% of its gross loan portfolio being concentrated in Andhra Pradesh (AP) as of December For the year ended March 31, 2010, SKSML reported net profit of Rs. 181 crore on an asset base of Rs. 5,419 crore. The 0+ delinquency level for overall the portfolio of SKSML was 31.50% as on December The credit quality of SKSML has been good in the past. However, the Ordinance issued by the AP government in October 2010 (later converted to an Act in December 2010) restricting operations (both collections and disbursements) of MFIs operating out of the state, has had a severe impact on the portfolio of SKSML in the state. Of the total portfolio of SKSML in AP, about 98% was delinquent as on December 2010, while 3.6% of the non AP based portfolio was delinquent. In the past, ICRA has assigned rating to Assignee Payouts under 1 transaction involving bilateral assignment of microfinance loan receivables, originated by SKSML. The transaction is matured and had performed well with 99.2% collections and loss cum 30+ delinquency of 1.24%. The rating of the Assignee Payouts in this transaction had been stable at the initial level. The key financial indicators of SKSML are placed in Table 2 below. Table 2: Key Financial Indicators Amounts in Rs. crore Dec-10 Mar-10 Mar-09 Mar-08 Equity Share Capital Net Worth (reported) 1, Total Assets( On balance Sheet) 5, , , , Total Assets( Off balance Sheet) 5, , , , Total Operating Income ( Net of Interest Expenses) Net Interest Income Profit before tax Profit after tax (reported) Yield on Average Earning Assets 26.45% 24.25% 24.33% 28.69% Cost of Average Interest Bearing Funds 11.80% 11.92% 13.25% 14.30% Gross Interest Spread 14.65% 12.34% 11.09% 14.39% PRESS RELEASE Page 17

18 Net Interest Margin Average Managed Assets 17.77% 12.88% 12.10% 16.31% Operating expenses / AMA 9.77% 9.85% 10.90% 15.63% Credit Prov. & Write-offs /AMA 3.12% 1.09% 0.49% 0.75% Cost Income Ratio 50.02% 52.36% 61.77% 70.04% PBT /Average Managed Assets (before extraordinary 6.65% 5.63% 4.57% 4.27% items) PAT/ Average Managed Assets 4.35% 3.66% 2.95% 2.45% PAT / Average Net worth 17.30% 21.66% 18.52% 11.79% Reported Gearing (times) Adjusted Gearing( assuming assigned book as debt) CRAR 35.65% 28.32% 24.07% 20.01% Tier I Capital in relation to Managed Assets (%) N.A % 23.73% 19.43% Tier II Capital in relation to Managed Assets (%) 0.00% 0.00% 0.34% 0.58% Gross NPA 0.38% 0.33% 0.34% 0.20% February 2011 For further details please contact: Analyst Contacts: Mr. Kalpesh Gada (Tel. No ) Head- Structured Finance Products Relationship Contacts:, (Tel. No / ) jayantac@icraindia.com Copyright, 2011, ICRA Limited. All Rights Reserved. Contents may be used freely with due acknowledgement to ICRA ICRA ratings should not be treated as recommendation to buy, sell or hold the rated debt instruments. The ICRA ratings are subject to a process of surveillance which may lead to a revision in ratings. Please visit our website ( or contact any ICRA office for the latest information on ICRA ratings outstanding. All information contained herein has been obtained by ICRA from sources believed by it to be accurate and reliable. Although reasonable care has been taken to ensure that the information herein is true, such information is provided as is without any warranty of any kind, and ICRA in particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness or completeness of any such information. All information contained herein must be construed solely as statements of opinion and ICRA shall not be liable for any losses incurred by users from any use of this publication or its contents PRESS RELEASE Page 18

20 Vikram Solar Private Limited Rating History Instrument Amount Rated Amount Outstanding as on 30 th September, 2010 Rating In Rs. Crore In Rs. Crore As in February, 2011 Term Loan LBB- (Stable) Cash Credit LBB- (Stable) Bank Guarantee + Letter of Credit* N.A LBB- (Stable) / A4 ICRA has assigned an LBB- (pronounced L double B minus) rating to the Rs crore 1 term loan, Rs crore fund based and Rs crore non fund based bank facilities of Vikram Solar Private Limited (VSPL). The outlook on the rating is Stable. The non fund based facilities are interchangeable between long term and short term, for which ICRA has assigned an A4 (pronounced A four) rating. The ratings reflect the favorable demand outlook for solar photo voltaic modules, the management s ability to run business profitably since the first year of operation, healthy order book position of VSPL, and the foothold that VSPL has secured in the European market. ICRA however notes that the orders at hand need to be executed in the short term & would therefore depend upon VSPL s ability to quickly increase its production levels and sustain the same. The ratings are constrained by the stretched liquidity position of the company attributable to high receivables, adverse capital structure, and the criticality of continuing Government policies to the growth of the solar industry. The ratings also factor in the exposure of the company s profitability to movement in foreign exchange rates, with significant proportion of raw material procurements being met through imports denominated in US dollar, while a large portion of the sales are denominated in Euro. As per typical supply conditions, VSPL has to provide performance guarantee for the solar plant over a long term. This adversely affects the company s business risk profile, since such risks can t be passed on to suppliers of critical raw material like solar cells or other ancillary equipments that are required in the solar plant. Company Profile Vikram Solar Private Limited (VSPL) is a solar photo voltaic module manufacturing company at the Falta Special Economic Zone (FSEZ) in West Bengal. The company started commercial operation on September 2009, and by October 2010, VSPL had reached a capacity of 46 MW of solar PV modules. VSPL has set up its 100% subsidiary in Germany under the name Vikram Solar GmbH. VSPL is a part of the Vikram group based in Kolkata. Recent Results VSPL registered a profit after tax of Rs 4.14 crore on the back of net sales of Rs crore in the six months of operation from April to September in In the seven months of operation from September in , the company registered a profit after tax of Rs 3.28 crore on the back of net sales of Rs crore. February Lakh = 1 Crore = 10 million For complete rating scale and definitions please refer to ICRA's Website or other ICRA Rating Publications PRESS RELEASE Page 20

21 For further details please contact: Analyst Contacts: Mr. Jayanta Roy, (Tel. No / ) jayanta@icraindia.com Relationship Contacts: Ms. Anuradha Ray, (Tel. No / ) anuradha@icraindia.com Copyright, 2011, ICRA Limited. All Rights Reserved. Contents may be used freely with due acknowledgement to ICRA ICRA ratings should not be treated as recommendation to buy, sell or hold the rated debt instruments. The ICRA ratings are subject to a process of surveillance which may lead to a revision in ratings. Please visit our website ( or contact any ICRA office for the latest information on ICRA ratings outstanding. All information contained herein has been obtained by ICRA from sources believed by it to be accurate and reliable. Although reasonable care has been taken to ensure that the information herein is true, such information is provided as is without any warranty of any kind, and ICRA in particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness or completeness of any such information. All information contained herein must be construed solely as statements of opinion and ICRA shall not be liable for any losses incurred by users from any use of this publication or its contents PRESS RELEASE Page 21

23 Rating History Instrument Amount Rated Amount Outstanding Rating In Rs. Crore As on March 31, 2010 In Rs. Crore As in February 11 Term Loans LBB (Stable) Fund Based Limits LBB (Stable) Non-Fund Based Limits 0.20 NA LBB (Stable) Fund Based Limits A4 Non-Fund Based Limits 4.13 NA A4 Rating History ICRA has assigned an LBB (pronounced L double B) rating to the Rs crore 1 term loan, Rs. 15 crore long-term fund based bank limits and Rs crore long-term non-fund based bank limits of Acknit Industries Limited (AIL). The outlook on the long term rating is stable. ICRA has also assigned an A4 (pronounced A four) rating to the Rs crore short-term fund based bank limits and Rs crore short-term non-fund based bank limits of AIL. The ratings factor in AIL s longstanding presence in the industrial safety products industry, as well as its reputed client base and diverse and flexible product mix that strengthen its market position. The company also has moderate gearing. Moreover, it was able to record a significant increase in sales in the current year thus far on the back of rising demand from South American countries, although the continuing economic weakness in European markets could have a moderating impact on sales in the near term. The ratings, however, also take into account the company s weak financial profile, characterized by depressed net profitability and a continuing decline in net profit margin over the past five years attributable primarily to a change in product mix and increasing depreciation and interest burden, which has, in turn, led to a weak return on capital employed and subdued debt coverage indicators as well. Additionally, given the company s considerable dependence on export incentives, its profit margins are highly sensitive to the export policies of the Government of India, although the company s ability to pass on cost increases reduces the sensitivity to some extent. The high working capital intensity of the company adversely impacts liquidity. The ratings also take into consideration the significant competition that AIL faces from other Indian players and Chinese exporters, and the sensitivity of the company s profitability to fluctuations in foreign exchange rates, although the same is mitigated to a considerable extent by the hedging strategies followed by the company. Company Profile Acknit Industries Limited was founded in 1990 as a private limited company involved in the manufacture of seamless knitted hand gloves for industrial use. The entity was converted into a limited concern under the current name in 1994, and entered the capital market in The company gradually diversified its product range to include leather, coated and dotted industrial gloves, as well as protective industrial garments and children s garments. It has four manufacturing units in West Bengal, with two being located in the Falta Special Economic Zone (FSEZ), Sectors I & II, and two being located in Ganganagar. Additionally, the company also operates a windmill in Dhule, Maharashtra. Overall, the units have capacities of 2.61 crore pairs of gloves, 8 lakh pieces of garments and 90 lakh KWH of power per year. Production at the Sector I unit in the FSEZ was adversely impacted by a fire that occurred in September, Recent Results PRESS RELEASE Page 23