Rating Rationale
February 02, 2018 | Mumbai
Apex Frozen Foods Limited
Suspension revoked; 'CRISIL A-/Stable/CRISIL A2+' assigned to bank debt
Rating Action
Total Bank Loan Facilities Rated Rs.114.77 Crore
Long Term Rating CRISIL A-/Stable (Assigned; Suspension Revoked) 
Short Term Rating CRISIL A2+ (Assigned; Suspension Revoked) 
1 crore = 10 million
Refer to annexure for Details of Instruments & Bank Facilities
Detailed Rationale

CRISIL has revoked the suspension of its ratings on the bank facilities of Apex Frozen Foods Limited (AFFL) and has assigned its 'CRISIL A-/Stable/CRISIL A2+' ratings to the facilities. CRISIL had suspended the ratings on December 4, 2015, as the company had not provided the information required for a rating view. AFFL has now shared the requisite information, enabling CRISIL to assign ratings to its bank facilities.

The ratings reflect AFFL's established market position in the seafood industry backed by the extensive experience of its promoters, longstanding customer relationships, and healthy operating efficiencies. The ratings also factor in the company's strong financial risk profile. These strengths are partially offset by susceptibility to risks inherent in the industry, exposure to intense competition and fluctuations in foreign exchange (forex) rates.

Key Rating Drivers & Detailed Description
* Extensive experience of the promoters: Benefits from the promoters' three decade-long experience in the industry and healthy relationships with customers and suppliers, should support business.

* Healthy operating efficiencies: Advantages from integrated operations with own hatcheries and farming, processing unit, cold storage, and logistics will continue. Moreover, working capital cycle is efficient as reflected in gross current assets of 87 days on March 31, 2017 driven by low receivables and inventory of 25-40 and 30-40 days, respectively.

* Strong financial risk profile: Financial risk profile is marked by healthy networth and comfortable gearing of Rs 251.66 crore and 0.46 time, respectively, as on September 30, 2017. Moreover debt protection metrics remained robust with the ratios of interest coverage and net cash accrual to total debt being 10.38 times and 0.36 time, respectively, in the first half of fiscal 2018.

* Susceptibility to risks inherent in the industry: The Indian sea food industry has been witnessing significant growth over the past few years led by increasing share of aquaculture. However, it remains susceptible to the outbreak of diseases, adverse climatic conditions, natural calamities and regulatory changes, which may significantly impact the credit profile of players such as AFFL.

* Exposure to fluctuations in forex rates: Revenues, accruing entirely from the export markets, are exposed to risks related to volatility in forex rates. Although 50% of foreign currency exposure is hedged, any sharp fluctuation in forex rates will impact realisations and profitability. 
Outlook: Stable

CRISIL believes AFFL will continue to benefit from the extensive experience of its promoters and its established market position in the industry. The outlook may be revised to 'Positive' in case of significant and sustained growth in revenue and profitability and stable working capital cycle; completion of ongoing capital expenditure for the new processing plant will remain a key rating sensitivity factor. The outlook may be revised to 'Negative' if disease outbreak in shrimps or adverse government regulations or any large debt-funded capital expenditure or stretch in working capital cycle weakens financial risk profile. 

About the Company

Apex Exports was set-up as a partnership firm in 1996, by Mr K Satyanarayana Murthy. It was converted into a private limited company in 2012 and then into public limited company. Kakinada (Andhra Pradesh)-based AFFL is engaged in aquaculture business and processes and exports shrimps, mainly vannamei variety. It was listed on the Bombay Stock Exchange and National Stock Exchange of India Ltd on September 4, 2017.

In the first half ending September 30, 2017 revenue and profit after tax were Rs 532.7 crore and Rs 34.8 crore, respectively.

Key Financial Indicators
Particulars Unit 2017 2016
Revenue Rs. Cr. 699.12 603.53
Profit After Tax (PAT) Rs. Cr. 24.4 18.95
PAT Margins % 3.5 3.1
Adjusted debt/Adjusted networth Times 1.16 1.08
Interest coverage Times 4.93 4.31

Status of non cooperation with previous CRA
AFFL has not cooperated with ICRA which has classified it as issuer not cooperative vide release dated September 01, 2017. The reason provided by ICRA is non-furnishing of information for monitoring of ratings.

Any other information: Not applicable

Note on complexity levels of the rated instrument:
CRISIL complexity levels are assigned to various types of financial instruments. The CRISIL complexity levels are available on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL complexity levels for instruments that they consider for investment. Users may also call the Customer Service Helpdesk with queries on specific instruments.
Annexure - Details of Instrument(s)
ISIN Name of Instrument Date of Allotment Coupon Rate (%) Maturity Date Issue Size (Rs Crore) Rating Assigned with Outlook
NA Export Funding* NA NA NA 30 CRISIL A2+
NA Foreign Currency Term Loan NA NA Sep-2020 5.17 CRISIL A-/Stable
NA Export Funding^ NA NA NA 70 CRISIL A2+
NA Rupee Term Loan NA NA Sep-2018 0.8 CRISIL A-/Stable
NA Rupee Term Loan NA NA Jun-2018 0.25 CRISIL A-/Stable
NA Rupee Term Loan NA NA Jan-2020 1.05 CRISIL A-/Stable
NA Non-Fund Based Limit@ NA NA NA 7.5 CRISIL A2+
*Interchangeable between packing credit in foreign currency, export packing credit, foreign bill discounting and letter of credit
^Interchangeable between packing credit in foreign currency, export packing credit, foreign bill purchase and standby working capital limit
@Includes letter of credit and stand-by letter of credit facilities
Annexure - Rating History for last 3 Years
  Current 2018 (History) 2017  2016  2015  Start of 2015
Instrument Type Quantum Rating Date Rating Date Rating Date Rating Date Rating Rating
Fund-based Bank Facilities  LT/ST  107.5  CRISIL A-/Stable/ CRISIL A2+    No Rating Change    No Rating Change    No Rating Change  04-12-15  Suspended/ Suspended  CRISIL BB+/Stable/ CRISIL A4+ 
Non Fund-based Bank Facilities  LT/ST  7.5  CRISIL A2+    --    --    --    --  -- 
Table reflects instances where rating is changed or freshly assigned. 'No Rating Change' implies that there was no rating change under the release.
Annexure - Details of various bank facilities
Current facilities Previous facilities
Facility Amount (Rs.Crore) Rating Facility Amount (Rs.Crore) Rating
Export Funding* 30 CRISIL A2+ -- 0 --
Foreign Currency Term Loan 5.17 CRISIL A-/Stable -- 0 --
Non-Fund Based Limit@ 7.5 CRISIL A2+ -- 0 --
Rupee Term Loan 2.1 CRISIL A-/Stable -- 0 --
Export Funding^ 70 CRISIL A2+      
Total 114.77 -- Total 0 --
*Interchangeable between packing credit in foreign currency, export packing credit, foreign bill discounting and letter of credit
^Interchangeable between packing credit in foreign currency, export packing credit, foreign bill purchase and standby working capital limit
@Includes letter of credit and stand-by letter of credit facilities
Links to related criteria
Rating criteria for manufaturing and service sector companies
Rating Criteria for Fast Moving Consumer Goods Industry
CRISILs Bank Loan Ratings

For further information contact:
Media Relations
Analytical Contacts
Customer Service Helpdesk
Saman Khan
Media Relations
CRISIL Limited
D: +91 22 3342 3895
B: +91 22 3342 3000

Naireen Ahmed
Media Relations
CRISIL Limited
D: +91 22 3342 1818
B: +91 22 3342 3000

Jyoti Parmar
Media Relations
CRISIL Limited
D: +91 22 3342 1835
B: +91 22 3342 3000

Rahul Guha
Director - CRISIL Ratings
CRISIL Limited
D:+91 22 4097 8320

Venkata Shantaram
Associate Director - CRISIL Ratings
CRISIL Limited
D:+91 40 4032 8222

Nagarjun Alaparthi
Rating Analyst - CRISIL Ratings
CRISIL Limited
D:+91 20 4018 1933
Timings: 10.00 am to 7.00 pm
Toll free Number:1800 267 1301

For a copy of Rationales / Rating Reports:
For Analytical queries:


Note for Media:
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 (whether directly or indirectly) of its rationales for consideration or otherwise through any media including websites, portals etc.

About CRISIL Limited

CRISIL is an agile and innovative, global analytics company driven by its mission of making markets function better. We are India’s foremost provider of ratings, data, research, analytics and solutions. A strong track record of growth, culture of innovation and global footprint sets us apart. We have delivered independent opinions, actionable insights, and efficient solutions to over 100,000 customers.

We are majority owned by S&P Global Inc., a leading provider of transparent and independent ratings, benchmarks, analytics and data to the capital and commodity markets worldwide.

For more information, visit www.crisil.com 


About CRISIL Ratings
CRISIL Ratings is part of CRISIL Limited (“CRISIL”). We pioneered the concept of credit rating in India in 1987. CRISIL is registered in India as a credit rating agency with the Securities and Exchange Board of India (“SEBI”). With a tradition of independence, analytical rigour and innovation, CRISIL sets the standards in the credit rating business. We rate the entire range of debt instruments, such as, bank loans, certificates of deposit, commercial paper, non-convertible / convertible / partially convertible bonds and debentures, perpetual bonds, bank hybrid capital instruments, asset-backed and mortgage-backed securities, partial guarantees and other structured debt instruments. We have rated over 24,500 large and mid-scale corporates and financial institutions. CRISIL has also instituted several innovations in India in the rating business, including rating municipal bonds, partially guaranteed instruments and microfinance institutions. We also pioneered a globally unique rating service for Micro, Small and Medium Enterprises (MSMEs) and significantly extended the accessibility to rating services to a wider market. Over 1,10,000 MSMEs have been rated by us.


CRISIL respects your privacy. We use your contact information, such as your name, address, and email id, to fulfil your request and service your account and to provide you with additional information from CRISIL and other parts of S&P Global Inc. and its subsidiaries (collectively, the “Company) you may find of interest.

For further information, or to let us know your preferences with respect to receiving marketing materials, please visit www.crisil.com/privacy. You can view the Company’s Customer Privacy at https://www.spglobal.com/privacy

Last updated: April 2016


This disclaimer forms part of and applies to each credit rating report and/or credit rating rationale that we provide (each a “Report”). For the avoidance of doubt, the term “Report” includes the information, ratings and other content forming part of the Report. The Report is intended for the jurisdiction of India only. This Report does not constitute an offer of services. Without limiting the generality of the foregoing, nothing in the Report is to be construed as CRISIL providing or intending to provide any services in jurisdictions where CRISIL does not have the necessary licenses and/or registration to carry out its business activities referred to above. Access or use of this Report does not create a client relationship between CRISIL and the user.

We are not aware that any user intends to rely on the Report or of the manner in which a user intends to use the Report. In preparing our Report we have not taken into consideration the objectives or particular needs of any particular user. It is made abundantly clear that the Report is not intended to and does not constitute an investment advice. The Report is not an offer to sell or an offer to purchase or subscribe for any investment in any securities, instruments, facilities or solicitation of any kind or otherwise enter into any deal or transaction with the entity to which the Report pertains. The Report should not be the sole or primary basis for any investment decision within the meaning of any law or regulation (including the laws and regulations applicable in the US).

Ratings from CRISIL Rating are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities / instruments or to make any investment decisions. Any opinions expressed here are in good faith, are subject to change without notice, and are only current as of the stated date of their issue. CRISIL assumes no obligation to update its opinions following publication in any form or format although CRISIL may disseminate its opinions and analysis. CRISIL rating contained in the Report is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment or other business decisions. The recipients of the Report should rely on their own judgment and take their own professional advice before acting on the Report in any way.

Neither CRISIL nor its affiliates, third party providers, as well as their directors, officers, shareholders, employees or agents (collectively, “CRISIL Parties”) guarantee the accuracy, completeness or adequacy of the Report, and no CRISIL Party shall have any liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of any part of the Report. EACH CRISIL PARTY DISCLAIMS ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. In no event shall any CRISIL Party be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of any part of the Report even if advised of the possibility of such damages.

CRISIL Ratings may receive compensation for its ratings and certain credit-related analyses, normally from issuers or underwriters of the instruments, facilities, securities or from obligors. CRISIL’s public ratings and analysis as are required to be disclosed under the regulations of the Securities and Exchange Board of India (and other applicable regulations, if any) are made available on its web sites, www.crisil.com (free of charge). Reports with more detail and additional information may be available for subscription at a fee – more details about CRISIL ratings are available here: www.crisilratings.com.

CRISIL and its affiliates do not act as a fiduciary. While CRISIL has obtained information from sources it believes to be reliable, CRISIL does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives and / or relies in its Reports. CRISIL keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of the respective activity. As a result, certain business units of CRISIL may have information that is not available to other CRISIL business units. CRISIL has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process. CRISIL has in place a ratings code of conduct and policies for analytical firewalls and for managing conflict of interest. For details please refer to: http://www.crisil.com/ratings/highlightedpolicy.html

CRISIL’s rating criteria are generally available without charge to the public on the CRISIL public web site, www.crisil.com. For latest rating information on any instrument of any company rated by CRISIL you may contact CRISIL RATING DESK at CRISILratingdesk@crisil.com, or at (0091) 1800 267 1301.

This Report should not be reproduced or redistributed to any other person or in any form without a prior written consent of CRISIL.

All rights reserved @ CRISIL