| Asian Energy Services Limited | ||||
| 'Crisil BBB+/Stable' assigned to Bank Debt | ||||
| Rating Action | ||||
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| Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||||
| 1 crore = 10 million | ||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale Crisil Ratings has assigned its ‘Crisil BBB+/Stable’ rating to the long-term bank facility of Asian Energy Services Limited (AESL; part of Asian Group).
The rating reflects AESL longstanding presence, strong technical capabilities and established clientele along with its healthy financial profile. These strengths are partially offset by exposure to intense competition, government regulations-policy and working capital intensive nature of operations. |
Analytical Approach For arriving at the ratings, Crisil Ratings has combined the business and financial risk profiles of AESL along-with its subsidiaries (including step down subsidiary) viz. Asian Oilfield & Energy Services DMCC , AOSL Petroleum Pte. Ltd., AOSL Energy Services Limited, Optimum Oil & Gas Private Limited, Cure Multitrade Private Limited and Ivorene Oil Services Nigeria Ltd (step down subsidiary) and three joint ventures viz. Zuberi Asian Joint Venture, AESL FFIL Joint Venture and Asian Indwell Joint Venture.
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
Key Rating Drivers & Detailed Description Strengths:
Also, group’s customers include some of the well-established players in oil & gas, mining & other energy industry such as Gail India ltd, ONGC Ltd, Oil India Ltd, Vedanta Ltd, Heavy Engineering Corporation, Singareni Coalfield ltd, Eastern Coalfield ltd.. AESL technical capabilities are expected to continue to benefit its business profile in the medium term and has resulted in a healthy order book of Rs 1687 Cr which provides revenue visibility over the medium term.
Debt protection metrics are comfortable with interest coverage ratio and net cash accruals to adjusted debt at 20.28 times and 2.52 times respectively in fiscal year 2025. The group has also announced the acquisition of Kuiper group which is estimated to be completed shortly subject to regulatory approvals. The acquisition cost is around $ 9.25 million which will be financed through bank debt and funds available with the group. However, the financial risk profile of the group is estimated to remain comfortable over the medium term despite the debt funded acquisition.
Weaknesses:
Increase in GCA days was driven by increase in debtor days from 163 days as on March 31,2024 to 177 days as on March 31,2025. Inventory days have doubled to 79 days as on March 31,2025 as against 36 days as on March 31,2024. The increase in debtor days is mainly due to higher revenue earned by the group in Q4of fiscal 2025. The inventory days increased due to significant increase in unbilled work in progress as on Mar 31, 2025. These working capital requirements are mainly financed by internal accruals and partly by creditors and bank lines. Sustained improvement in working capital cycle will remain a key rating sensitivity factor. |
Liquidity: Adequate Liquidity of the group remains adequate with net cash accruals expected over Rs 78-80 Cr which are sufficient against repayment obligations of Rs 1.5-1.75 Cr. Group has a cash equivalent balance of Rs 105 Cr as on May 31, 2025 of which Rs 69 Cr is unencumbered. Bank limit utilization was also low and averaged at 17% for the past 12 months ended May 2025.
The group issued 47,00,000 fully convertible equity warrants in fiscal year 2025 of which 25% of the money has been received against subscription and balance is expected to be received in fiscal 2026 and fiscal 2027 upon conversion. This will lead to a sizeable liquidity surplus for the group.
The group has capex plans and ongoing acquisition of Kuiper group which are expected to be financed through a mixture of external debt, internal accruals and funds being raised from subscription of share warrants. Completion of milestones related to acquisition and subsequent stabilization will remain key monitorable. |
Outlook: Stable Crisil Ratings believe AESL will continue to benefit from its technical capabilities and established relationships with clients. |
Rating sensitivity factors Upward factors:
Downward factors:
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About the Group AESL provides a range of geophysical onshore seismic and drilling services, including acquisition, imaging, field evaluation, 2D & 3D seismic data services. Further, ASEL along with its subsidiaries & joint ventures also provides EPC and O&M services to various oil and gas production units and mining & other energy sector.
Its listed in at BSE Limited and National Stock Exchange of India Limited. Dr. Kapil Garg is the Managing Director. |
Key Financial Indicators (consolidated)
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Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
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Annexure – List of entities consolidated
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| Annexure - Rating History for last 3 Years | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | ||||||||
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Criteria Details
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