CRISIL has assigned its ratings of ‘BBB/Stable/P3+’ to Inventys Research Company Pvt Ltd’s (Inventys’) bank facilities. The ratings reflect Inventys’ strong take-or-pay contractual relationship with Bayer CropScience AG (Bayer; rated ‘A-/Negative/A-2’ by Standard and Poor’s), its moderate financial risk profile, and the extensive industry experience and technical expertise of its promoters. These strengths are partially offset by Inventys’ limited track record and small scale of operations.

Outlook: Stable
CRISIL believes that Inventys will maintain a moderate financial risk profile on the back of healthy profitability resulting from a strong contractual relationship with Bayer. The outlook may be revised to ‘Positive’ if Inventys generates higher-than-expected profit margin or if it diversifies its revenues by venturing into the production of new molecules. Conversely, the outlook could be revised to ‘Negative’ if the company is unable to contain its raw material usage according to the terms stipulated under its agreement with Bayer, resulting in reduced profitability; or if the company undertakes large, debt-funded capital expenditure programmes, constraining its capital structure.

About the Company
Set up in 2007 by Dr. Deepak Birewar, Inventys manufactures specialty chemicals used in the manufacture of fungicides by Bayer. Inventys has an export-oriented manufacturing unit in Nagpur (Maharashtra), which receives 100-per cent tax exemption. For 2008-09 (refers to financial year, April 1 to March 31), Inventys reported a profit after tax (PAT) of Rs.4.8 million on net sales of Rs.84.4 million.