Rating Rationale
March 06, 2018 | Mumbai
DIL Limited
 Issuer not cooperating, based on best-available information; Rating revised to 'Watch with Developing Implications Issuer not cooperating' ; Rating withdrawn
Rating Action
Total Bank Loan Facilities Rated Rs.45 Crore
Long Term Rating CRISIL BB+ (Issuer Not Cooperating; Revised to 'Rating Watch with Developing Implications' from 'Rating Watch with Negative Implications'; Rating Withdrawal)*
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 press release did not provide the requisite information needed to conduct the rating exercise and is therefore classified as 'non cooperative'.
Non cooperation by Issuer

CRISIL has been consistently following up with DIL Limited (DIL) for obtaining information through letters and emails dated June 29, 2017, and September 08, 2017, among others, apart from telephonic communication. However, the issuer has remained non-cooperative.

'Investors, lenders and all other market participants should exercise due caution while using the rating assigned/reviewed with the suffix 'issuer not cooperating'. These ratings lack a forward-looking component as it is arrived at without any management interaction and is based on best available or limited or dated information on the entity.'

Detailed Rationale

Despite repeated attempts to engage with the management, CRISIL did not receive any information on either the financial performance or strategic intent of DIL. This restricts CRISIL's ability to take a forward-looking view on the credit quality of the entity. CRISIL believes that information available for DIL is consistent with 'Scenario 2' outlined in the 'Framework for Assessing Consistency of Information with 'CRISIL BBB Rating' category or lower.' Based on last available information, the rating continues to be 'CRISIL BB+/Issuer not co-operating' with the rating watch on the same revised to 'Rating Watch with Developing Implications' from 'Rating Watch with Negative Implications'. 

The revision in rating watch follows the easing of DIL's liquidity position post refinancing of existing term debt and contraction of fresh debt, both structured in such a way that the company has minimal repayment obligation in the medium term. The terms of refinancing and fresh debt have come to CRISIL's knowledge during the review of its ratings on the bank facilities of Fermenta Biotech Limited (FBL), DIL's subsidiary and a company under the same management.  The aforesaid revision also factors in the improvement in the company's operating performance, particularly in the third quarter of fiscal 2018. For the nine months ended December 2017, DIL's consolidated operating income (over 95% of this comes from FBL) grew by 69% year-on-year to Rs 206 crore. The operating margin has also improved significantly to 28.7% vis-a-vis 7.6% for the corresponding period last year.

Earlier, the rating was placed on 'watch with negative implications' based on DIL's announcement that it had plans to contract fresh debt of Rs 82.80 crore to execute a share purchase agreement (SPA) with Evolvence Life Sciences Fund II LLC, a private equity investor, to acquire the latter's 21.05% stake in FBL. The obligation towards repayment of fresh debt was expected to adversely affect DIL's debt servicing capacity.

DIL had also proposed to amalgamate FBL with itself and had authorized a committee of its directors to come out with a recommendation on the same. While the SPA was executed in December 2017, further details relating to the amalgamation are awaited.

CRISIL has withdrawn its rating on the bank facilities of DIL Limited (DIL) on the request of the company and receipt of a no-dues certificate from its banker, Union Bank of India. The rating action is in line with CRISIL's policy on withdrawal of its bank loan ratings.

About the Company

DIL is engaged in commercial real estate development and has developed commercial property named THANE ONE of a total area of 1.94 lakh sq. ft. (leasable area is 1.86 lakh square feet) in Thane.

Key Financial Indicators
Particulars Unit 2017 2016
Revenue Rs. Cr. 6.16 6.08
Profit After Tax (PAT) Rs. Cr. 4.63 (9.13)
PAT Margin % 75.19 (150.20)
Adjusted Debt/Adjusted Net worth Times 0.52 0.63
Interest coverage Times NM* NM*
*NM stands for 'Not meaningful'

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)*
ISIN Name of instrument Date of
Rate (%)
Maturity date Issue
(Rs. Cr)
Rating Assigned
with Outlook
NA Long Term Loan NA NA Not Available 44.50 Withdrawal/Issuer Not Cooperating
NA Proposed Long Term Bank Loan Facility NA NA NA 0.50 Withdrawal/Issuer Not Cooperating
*Issuer did not cooperate; based on best-available information
Annexure - Rating History for last 3 Years
  Current 2018 (History) 2017  2016  2015  Start of 2015
Instrument Type Quantum Rating Date Rating Date Rating Date Rating Date Rating Rating
Fund-based Bank Facilities  LT/ST  45  Withdrawal (Issuer Not Cooperating)*    No Rating Change  05-12-17  CRISIL BB+/Watch Negative (Issuer Not Cooperating)*  22-03-16  CRISIL BB+/Stable    No Rating Change  CRISIL BBB-/Stable 
            26-09-17  CRISIL BB+/Stable (Issuer Not Cooperating)*           
Table reflects instances where rating is changed or freshly assigned. 'No Rating Change' implies that there was no rating change under the release.
*Issuer did not cooperate; based on best-available information
Annexure - Details of various bank facilities
Current facilities Previous facilities
Facility Amount (Rs.Crore) Rating Facility Amount (Rs.Crore) Rating
Long Term Loan 44.5 Withdrawal/Issuer Not Cooperating Long Term Loan 44.5 CRISIL BB+/Watch Negative/Issuer Not Cooperating
Proposed Long Term Bank Loan Facility .5 Withdrawal/Issuer Not Cooperating Proposed Long Term Bank Loan Facility .5 CRISIL BB+/Watch Negative/Issuer Not Cooperating
Total 45 -- Total 45 --
Links to related criteria
CRISILs Approach to Financial Ratios
CRISILs Bank Loan Ratings - process, scale and default recognition
Framework for Assessing Information Adequacy Risk
Rating criteria for manufaturing and service sector companies
Rating Criteria for Construction Industry
CRISILs Approach to Recognising Default

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