December 04, 2013

Mumbai

BRGD Ingot Private Limited

Ratings Reaffirmed

Total Bank Loan Facilities Rated	Rs.150 Million
Long-Term Rating	CRISIL BB-/Stable (Reaffirmed)
Short-Term Rating	CRISIL A4+ (Reaffirmed)

(Refer to Annexure 1 for details on facilities)

CRISIL’s ratings on the bank facilities of BRGD Ingot Pvt Ltd (BRGD; part of the BRGD group) continue to reflect the extensive experience of BRGD group’s promoters in the steel manufacturing industry. This rating strength is partially offset by the BRGD group’s modest scale of operations in competitive steel industry, susceptibility of its operating margins to volatility in raw material prices, and average financial risk profile, marked by moderate gearing and average debt-protection metrics.

For arriving at its ratings, CRISIL has combined the business and financial risk profile of BRGD and its group company, SUL Steel Pvt Ltd (SULSPL), together referred to as the BRGD group. This is because both the entities are under common management, and have significant operational and financial synergies.

Outlook: Stable

CRISIL believes that the BRGD group will continue to benefit over the medium term from the extensive experience of its promoter’s in the steel industry. The outlook may be revised to ‘Positive’ if the BRGD group significantly improves its scale of operations and profitability, resulting in an improvement in its financial risk profile. Conversely, the outlook may be revised to ‘Negative’ in case there is a decline in the BRGD group’s profitability, or further elongation in its working capital cycle, or it undertakes large debt-funded capital expenditure programme, leading to deterioration in its financial risk profile.

About the Group

In February 2010, the promoters of SULSPL purchased BRGD from its earlier promoters. BRGD is engaged in manufacturing and trading in ingots. It sells majority of its ingot production to SULSPL.

SULSPL (formerly, Madhav Vyapar Pvt Ltd) is promoted by Mr. Harimohan Beriwala and his family. The company was demerged from SRMB Srijan Pvt Ltd in 2010. SULSPL has facilities based in Paharpur (West Bengal) for manufacturing of thermo-mechanically treated (TMT) bars.

For 2012-13, (refers to financial year, April 1 to March 31), BRGD, on a standalone basis, reported a profit after tax (PAT) of Rs.23.5 million on net sales of Rs.1.26 billion, as against PAT of Rs.6.19 million on net sales of Rs.1.14 billion for 2011-12.

Annexure 1 - Details of various bank facilities

Current facilities			Previous facilities
Facility	Amount (Rs. Million)	Rating	Facility	Amount (Rs. Million)	Rating
Cash Credit	55.0	CRISIL BB-/ Stable	Cash Credit	55.0	CRISIL BB-/ Stable
Letter of Credit	30.0	CRISIL A4+	Letter of Credit	30.0	CRISIL A4+
Proposed Long-Term Bank Loan Facility*	65.0	CRISIL BB-/ Stable	Proposed Long-Term Bank Loan Facility	57.0	CRISIL BB-/ Stable
--	0	--	Rupee Term Loan	8.0	CRISIL BB-/ Stable
Total	150.0	--	Total	150.0	--

* Previously included Rupee Term Loan of Rs.8.0 million which has been entirely paid off.

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Last updated: May, 2013

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December 04, 2013	http://www.crisil.com