| BLA Packaging Industries Private Limited | ||||
| Rating migrated to 'CRISIL B+/Stable' | ||||
| Rating Action | ||||
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| & *Issuer did not cooperate; based on best-available information | ||||
| 1 crore = 10 million | ||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale Due to inadequate information, CRISIL Ratings, in line with SEBI guidelines, had migrated its rating on the long-term bank facilities of BLA Packaging Industries Private Limited (BPIPL) to 'CRISIL B/Stable Issuer Not Cooperating'. However, the management has subsequently started sharing requisite information, for carrying out a comprehensive review of the rating. Consequently, CRISIL Ratings is migrating its rating to 'CRISIL B+/Stable'.
The rating reflects the average yet improving scale of operations. These weaknesses are partially offset by the moderate financial risk profile, backed by funding support from the promoters. |
Analytical Approach Unsecured loans of Rs 33.6 crore extended by the promoters as on March 31, 2020, have been treated as 75% equity and 25% debt as these are interest-free, and are expected to remain in the business over the medium term. |
Key Rating Drivers & Detailed Description Weakness: * Average yet improving scale of operations BPIPL commenced its commercial operations in fiscal 2020, and reported operating income and margin of Rs 23 crore and 4.3%, respectively. Scale of operations and profitability should improve in the current fiscal. Operating income stood at Rs 24.35 crore, while earnings before interest, taxes, depreciation and amortisation (EBITDA) stood at Rs 3.5 crore for the first nine months of fiscal 2021.
Strength: * Moderate financial risk profile Financial risk profile was marked by a modest networth and gearing of Rs 25.3 crore and 1 time, respectively, as on March 31, 2020. Though the company reported losses in fiscal 2020, funding support from the promoters has aided the capital structure. Interest cover was weak at 0.5 time in fiscal 2020, but may improve to over 2 times in the current fiscal. |
Liquidity: Stretched Liquidity remains stretched as expected cash accrual of Rs 2.5-3 crore will be tightly matched against maturing debt of Rs 2-3 crore over the medium term. However, funding support via unsecured loans from promoters and other affiliates should support liquidity. Outstanding unsecured loans stood at Rs 33.6 crore as on March 31, 2020, up from Rs 25.2 crore as on March 31, 2019. As on December 31, 2020, unsecured loans from promoters stood at Rs 34.56 crore. Bank limit utilisation averaged 45% for the 12 months ended December 31, 2020. The company had availed moratorium on the interest payment of its working capital facility, as per Reserve Bank of India guidelines. |
Outlook: Stable CRISIL Ratings believes BPIPL will continue to benefit from the increasing scale of its operations and funding support from the promoters. |
Rating Sensitivity Factors Upward factors:
Downward factors:
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About the Company BPIPL was set up in 2016 by the promoter, Mr Narendra Kumar Agarwal. The Mumbai-based company manufactures flexible printing and packaging of laminates. |
Key financial indicators
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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)
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| Annexure - Rating History for last 3 Years | |||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | |||||||||||||||||||||||||||||||||||||||
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* - Issuer did not cooperate; based on best-available information
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| Annexure - Details of various bank facilities | ||||||||||||||||||||||||||||||||||||
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