|
CRISIL has assigned its ‘P4+’ rating to the letter of credit facility of Subhkaran & Sons (Subhkaran), which is part of the Shrilekha group. The rating reflects the Shrilekha group’s inadequate internal risk management systems and exposure to customer concentration risks. The rating also factors in the expected pressure on the group’s financial flexibility, given its high gearing and its promoters’ sizeable equity commitments for their proposed hospitality venture. These weaknesses are partially offset by the Shrilekha group’s established presence in the iron and steel trading business.
For arriving at its rating, CRISIL has combined the business and financial risk profiles of Subhkaran, Makalu Trading Ltd, Ogardhani Exports Pvt Ltd, Shrilekha Trading Pvt Ltd, Dilshad Trading Company Pvt Ltd, and Superways Enterprises Pvt Ltd. This is because the six entities, collectively referred to as the Shrilekha group, are under a common management, and have cross-holdings, common customers and suppliers, and sizeable intra-group financial transactions.
About the Company
Formed in 1977, Subhkaran is a partnership firm. Mr. Vinod Jatia and Mr. Prateek Jatia are equal partners in the firm. The firm trades in steel rolls and steel scrap. For 2008-09 (refers to financial year, April 1 to March 31), Subhkaran reported a profit after tax (PAT) of Rs.6.7 million on net sales of Rs.638.9 million, against a PAT of Rs.4.0 million on net sales of Rs.290.0 million for the previous year.
About the Group
The Shrilekha group was founded in 1981 by Mr. Vinod Jatia and his brothers. The group primarily trades in iron and steel products, such as hot- and cold-rolled coils, sheets, plates, sponge iron lumps, and fines. The promoters have recently ventured into the hospitality sector; they are setting up a hotel in Pune in a new company, Jatia Hotels & Resorts Pvt Ltd.
|  |
|
Media Contacts
|
Analytical Contacts
|
CRISIL Rating Desk
|
Mitu Samar
Head, Market Development & Communications
CRISIL Limited
Tel: +91-22- 3342 1838
Email: msamar@crisil.com
Tanuja Abhinandan
Market Development & Communications
CRISIL Limited
Tel: +91-22-3342 1818
Email: tabhinandan@crisil.com
|
Gurpreet S Chhatwal
Director - CRISIL Ratings
Tel: +91-11-4250 5100
Email: gchhatwal@crisil.com
Manish Kumar Gupta
Head - CRISIL Ratings
Tel: +91-11-4250 5100
Email: mkgupta@crisil.com
| Tel: +91-22-3342 3047 / 3342 3064
Email: CRISILratingdesk@crisil.com
|
|
Note:
This rating rationale is transmitted to you for the sole purpose of dissemination through your newspaper / magazine / agency. The rating rationale may be used by you in full or in part without changing the meaning or context thereof but with due credit to CRISIL. However, CRISIL alone has the sole right of distribution of its rationales for consideration or otherwise through any media including websites, portals etc.
|
CRISIL Complexity Levels are assigned to various types of financial instruments. The CRISIL Complexity Levels are available on www.crisil.com/complexity-levels. Investors are advised to refer to the CRISIL Complexity Levels for instruments that they propose to invest in. Investors can also call the CRISIL Helpline at +91 22 3342 3047 / + 91 22 3342 3064 with queries on specific instruments.
|
|
CRISIL is India's leading Ratings, Research, Risk and Policy Advisory company. CRISIL leverages its core strengths of credibility and analytical rigour to deliver opinions and solutions, that help clients mitigate and manage their business and financial risks, make markets function better, and help shape public policy. For more information, visit www.crisil.com.
Disclaimer: A CRISIL rating reflects CRISIL's current opinion on the likelihood of timely payment of the obligations under the rated instrument and does not constitute an audit of the rated entity by CRISIL. CRISIL ratings are based on information provided by the issuer or obtained by CRISIL from sources it considers reliable. CRISIL does not guarantee the completeness or accuracy of the information on which the rating is based. A CRISIL rating is not a recommendation to buy, sell, or hold the rated instrument; it does not comment on the market price or suitability for a particular investor. All CRISIL ratings are under surveillance. Ratings are revised as and when circumstances so warrant. CRISIL is not responsible for any errors and especially states that it has no financial liability whatsoever to the subscribers / users / transmitters / distributors of this product. CRISIL Ratings’ rating criteria are generally available without charge to the public on the CRISIL public web site, www.crisil.com. For the latest rating information on any instrument of any company rated by CRISIL, please contact CRISIL RATING DESK at CRISILratingdesk@crisil.com, or at (+91 22) 3342 3000.
|
|
