Rating Rationale
March 28, 2024 | Mumbai
Associated Alcohols and Breweries Limited
Issuer not cooperating, based on best-available information; Ratings migrated to ‘CRISIL BBB+/Stable/CRISIL A2 Issuer not cooperating'
 
Rating Action
Total Bank Loan Facilities RatedRs.110 Crore
Long Term RatingCRISIL BBB+ /Stable (ISSUER NOT COOPERATING*; Migrated from 'CRISIL A/Stable')
Short Term RatingCRISIL A2 (ISSUER NOT COOPERATING*; Migrated from 'CRISIL A1')
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
*Issuer did not cooperate; based on best-available information
 
Please note that the rating(s) are based on best available information with the credit rating agency: the entity whose debt is being published via this rating rationale did not provide the requisite information needed to conduct the rating exercise or did not provide the No Default Statements (NDS) for the last three months and is therefore classified as 'non cooperative'.

Non cooperation by Issuer

CRISIL Ratings has been consistently following up with Associated Alcohols and Breweries Limited (AABL), through emails and letters dated February 23, 2024, March 15, 2024 and March 19, 2024 among others, apart from telephonic communication, for obtaining management discussion. However, the issuer has remained non-cooperative.

 

‘The investors, lenders and all other market participants should exercise due caution with reference to the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived at without any management interaction and is based on best available or limited or dated information on the company. Such non co-operation by a rated entity may be a result of deterioration in its credit risk profile. These ratings with 'ISSUER NOT COOPERATING' suffix lack a forward looking component.’

Detailed Rationale

Despite repeated attempts to engage with the management, CRISIL Ratings failed to receive any discussion on either the financial performance or strategic intent of AABL, which restricts CRISIL Ratings’ ability to take a forward-looking view on the entity's credit quality. CRISIL Ratings believes that rating action on AABL is consistent with ‘Assessing Information Adequacy Risk’. Therefore, on account of lack of management cooperation, CRISIL Ratings has migrated the rating on bank facilities of AABL to 'CRISIL BBB+/Stable/CRISIL A2 Issuer Not Cooperating from CRISIL A/Stable/CRISIL A1.

Analytical Approach

CRISIL Ratings has combined the business and financial risk profiles of AABL and Mount Everest Beverages Ltd (MEBL). This is because both the companies, together referred as the Associated Alcohols group, operate in the same industry, and have operational and financial linkages.

 

Please refer Annexure - List of entities consolidated, which captures the list of entities considered and their analytical treatment of consolidation.

About the Group

Incorporated in 1989, AABL is the flagship company of the Indore-based Kedia group, promoted by the late Mr Bhagwati Prasad Kedia. The company is run by his sons Mr Anand Kedia and Mr Prasann Kedia supported by a professional board and management. The company produces a variety of alcohol, including rectified spirit, ENA, CL and IMFL, along with bottling for international brands such as Diageo. AABL has a distillery and bottling facility in Khargone, MP, with capacity of 45 MLPA. It is expanding its distillery capacity by 30 MLPA to cater to rising ethanol demand.

 

MEBL was incorporated in August 1999 by Kedia group and operates a brewery located at Memdi (MP). The company manufactures and sells beer under its own brands, Le Mont, Mount 600 and Dabang, and also undertakes contract manufacturing of beer for UBL. MEBL has installed capacity of 10 lakh hectoliters (120 lakh cases) of beer per annum. It has an assured offtake arrangement to the extent of 10 lakh cases per annum.

Key Financial Indicators

AABL

As on / for the period ended March 31

 

2023

2022

Operating income

Rs crore

702.76

514.22

Reported profit after tax (PAT)

Rs crore

41.55

60.80

PAT margin

%

5.92

11.84

Adjusted debt/Adjusted networth

Times

0.26

0.01

Interest coverage

Times

45.76

109.22

 

MEBL

As on / for the period ended March 31

 

2023

2022

Operating income

Rs crore

517

283

Reported profit after tax (PAT)

Rs crore

36.64

4.04

PAT margin

%

7.09

1.42

Adjusted debt/Adjusted networth

Times

0.48

0.55

Interest coverage

Times

19.51

4.78

Any other information: Not applicable

Note on complexity levels of the rated instrument:
CRISIL Ratings` complexity levels are assigned to various types of financial instruments and are included (where applicable) in the 'Annexure - Details of Instrument' in this Rating Rationale.

CRISIL Ratings will disclose complexity level for all securities - including those that are yet to be placed - based on available information. The complexity level for instruments may be updated, where required, in the rating rationale published subsequent to the issuance of the instrument when details on such features are available.

For more details on the CRISIL Ratings` complexity levels please visit www.crisilratings.com. Users may also call the Customer Service Helpdesk with queries on specific instruments.

Annexure - Details of Instrument(s)*

ISIN

Name of the instrument

Date of
Allotment

Coupon
Rate (%)

Maturity
Date

Issue size
(Rs. Crore)

Complexity
Level

Rating assigned
with outlook

NA

Bank Guarantee

NA

NA

NA

4

NA

CRISIL A2/Issuer Not Cooperating

NA

Bank Guarantee

NA

NA

NA

1

NA

CRISIL A2/Issuer Not Cooperating

NA

Bank Guarantee

NA

NA

NA

6

NA

CRISIL A2/Issuer Not Cooperating

NA

Cash Credit

NA

NA

NA

3

NA

CRISIL BBB+/Stable/Issuer Not Cooperating

NA

Cash Credit

NA

NA

NA

8

NA

CRISIL BBB+/Stable/Issuer Not Cooperating

NA

Cash Credit

NA

NA

NA

6

NA

CRISIL BBB+/Stable/Issuer Not Cooperating

NA

Proposed Fund-Based Bank Limits

NA

NA

NA

2

NA

CRISIL BBB+/Stable/Issuer Not Cooperating

NA

Term Loan

NA

NA

Jul-2028

80

NA

CRISIL BBB+/Stable/Issuer Not Cooperating

*Issuer did not cooperate; based on best-available information

Annexure – List of entities consolidated

Names of Entities Consolidated

Extent of Consolidation

Rationale for Consolidation

Associated Alcohols and Breweries Limited

100%

Operational and financial linkages; common management

Mount Everest Beverages Ltd

100%

Operational and financial linkages; common management

 

Annexure - Rating History for last 3 Years
  Current 2024 (History) 2023  2022  2021  Start of 2021
Instrument Type Outstanding Amount Rating Date Rating Date Rating Date Rating Date Rating Rating
Fund Based Facilities LT 99.0 CRISIL BBB+ /Stable(Issuer Not Cooperating)*   -- 05-06-23 CRISIL A/Stable 30-12-22 CRISIL A/Stable 01-11-21 CRISIL A-/Stable Withdrawn
      --   -- 04-01-23 CRISIL A/Stable   --   -- --
Non-Fund Based Facilities ST 11.0 CRISIL A2 (Issuer Not Cooperating)*   -- 05-06-23 CRISIL A1 30-12-22 CRISIL A1 01-11-21 CRISIL A2+ Withdrawn
      --   -- 04-01-23 CRISIL A1   --   -- --
All amounts are in Rs.Cr.
* - Issuer did not cooperate; based on best-available information
Annexure - Details of Bank Lenders & Facilities
Facility Amount (Rs.Crore) Name of Lender Rating
Bank Guarantee 4 IDBI Bank Limited CRISIL A2 (Issuer Not Cooperating)*
Bank Guarantee 1 HDFC Bank Limited CRISIL A2 (Issuer Not Cooperating)*
Bank Guarantee 6 Kotak Mahindra Bank Limited CRISIL A2 (Issuer Not Cooperating)*
Cash Credit 3 IDBI Bank Limited CRISIL BBB+/Stable (Issuer Not Cooperating)*
Cash Credit 8 HDFC Bank Limited CRISIL BBB+/Stable (Issuer Not Cooperating)*
Cash Credit 6 Kotak Mahindra Bank Limited CRISIL BBB+/Stable (Issuer Not Cooperating)*
Proposed Fund-Based Bank Limits 2 Not Applicable CRISIL BBB+/Stable (Issuer Not Cooperating)*
Term Loan 80 HDFC Bank Limited CRISIL BBB+/Stable(Issuer Not Cooperating)*
* - Issuer did not cooperate; based on best-available information
Criteria Details
Links to related criteria
CRISILs Approach to Financial Ratios
Rating criteria for manufaturing and service sector companies
CRISILs Bank Loan Ratings - process, scale and default recognition
Assessing Information Adequacy Risk
CRISILs Criteria for Consolidation

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