Rating Rationale
January 24, 2022 | Mumbai
Bloom Dekor Limited
Rating reaffirmed at 'CRISIL D'
 
Rating Action
Total Bank Loan Facilities RatedRs.32.5 Crore
Long Term RatingCRISIL D (Reaffirmed)
1 crore = 10 million
Refer to Annexure for Details of Instruments & Bank Facilities

Detailed Rationale

CRISIL Ratings has reaffirmed its 'CRISIL D' rating on the long-term bank facility of Bloom Dekor Ltd (BDL).

 

The rating is driven by poor liquidity leading to irregularities in BDL’s account conduct. The rating also factors BDL’s weak financial risk profile, constrained business risk profile, and large working capital requirement. However, it benefits from the extensive experience of its promoters in the household appliances industry.

Key Rating Drivers & Detailed Description

Weaknesses

Weak financial risk profile: The continued losses have wiped off BDL’s net worth and it has inadequate debt protection measures inadequate.

 

Large working capital requirement: The company had gross current assets of over 14 months as on March 31, 2021.

 

Exposure to intense competition: BDL’s small scale of operations, reflected in revenue of Rs 31 crore for fiscal 2021, limits the negotiating power with suppliers and customers, and renders the company vulnerable to business downturns. Moreover, it faces intense competition due to the presence of a large number of unorganised players in the industry on account of low capital requirement.

 

Strength:

Extensive experience of the promoters: The promoters’ have experience of six decades and established relationships with customers. Also, the promoters have extended unsecured loans to support the company.

Liquidity: Poor

The high working capital requirements, continuous losses and erosion of net worth have meant company has outstanding exposure of around Rs. 30 cr (including the COVID-19 FITL) against sanctioned bank limits of Rs. 25.5 cr. The accounts currently are frozen by the bank.

Rating Sensitivity factors

Upwards factors

  • Track record of at least 3 months of regular account conduct
  • Significant fund infusion or improved working capital cycle, accruals to correct the stress on liquidity

About the Company

Based in Ahmedabad and listed on the Bombay Stock Exchange, BDL manufactures laminated sheets and doors and sells to domestic and international clients.

Key Financial Indicators

As on / for the period ended March 31

 

2021

2020

Operating income

Rs crore

31.2

40.1

Reported profit after tax

Rs crore

-7.7

-1.6

PAT margin

%

-24.7

-4.2

Adjusted debt/adjusted networth

Times

-7.7

28.7

Interest coverage

Times

0.57

1.02

Status of non cooperation with previous CRA:

BDL has not cooperated with India Rating and Research Pvt Ltd (Ind-Ra), which led to its classification as ‘issuer not cooperative’ vide release dated September 13, 2017. The reason provided by Ind-Ra Pvt Ltd is non-furnishing of information for monitoring of ratings.

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. The CRISIL Ratings' complexity levels are available on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL Ratings' 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) Complexity Level Rating assigned with outlook
NA Cash credit NA NA NA 32.5 NA CRISIL D
Annexure - Rating History for last 3 Years
  Current 2022 (History) 2021  2020  2019  Start of 2019
Instrument Type Outstanding Amount Rating Date Rating Date Rating Date Rating Date Rating Rating
Fund Based Facilities LT 32.5 CRISIL D   --   -- 29-10-20 CRISIL D 16-07-19 CRISIL D CRISIL B-/Stable
      --   --   --   -- 03-01-19 CRISIL B-/Stable --
All amounts are in Rs.Cr.
Annexure - Details of Bank Lenders & Facilities
Facility Amount (Rs.Crore) Rating
Cash Credit 22.5 CRISIL D
Cash Credit 10 CRISIL D
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
CRISILs Approach to Recognising Default

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