Rating Rationale
November 15, 2022 | Mumbai
Gilpin Tours and Travel Management India Private Limited
'CRISIL BB+ / Stable' assigned to Bank Debt
 
Rating Action
Total Bank Loan Facilities RatedRs.20 Crore
Long Term RatingCRISIL BB+/Stable (Assigned)
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

Detailed Rationale

CRISIL Ratings has assigned its 'CRISIL BB+/Stable' rating to the bank facilities of Gilpin Tours and Travel Management India Private Limited (GTTPL).

 

The rating reflects GTTPL's established position in the air ticketing business, well established customer base and moderate capital structure. These strengths are partially offset by its exposure to intense competition in the industry, susceptibility of revenue and profitability to the level of travel spending by corporates.

Key Rating Drivers & Detailed Description

Strengths:

  • Established position in the air ticketing business: The promoters have an experience of over 2 decades in travel agent & tour operator industry. This has given them an understanding of the dynamics of the market and enabled them to establish relationships with suppliers and customers.

 

  • Well established customer base: GTTPL has long-standing relationships with its customers and suppliers. Its customers include some of the well-established players in various industries such as DHL Group, ProdAir Group, Sony, Cipla and it has long term contracts with 90% of its customers, giving revenue visibility.

 

  • Moderate capital structure: Capital structure is marked by networth of Rs 13.31 crore and moderate total outside liabilities to adjusted networth ratio of 1.29 times, as on March 31, 2022. Controlled reliance on external debt will continue to support the financial risk profile.

 

Weakness:

  • Exposure to intense competition in the industry: Due to low fixed asset requirements, and low technology barriers, the industry has low entry barriers and large number of players; this has resulted in highly fragmented industry constraining the operations of the company thereby preventing any major scaling up of operations. The non-exclusivity and intense competition from other IATA approved agents limits the scope of entities in the segment to increase its scale substantially. However, this risk is partly mitigated by established position and long term contracts with customers.

 

  • Susceptibility of revenue and profitability to the level of travel spending by corporates: The travel industry is fragmented, and the air ticketing business is tied to economic cycles. During economic slowdown, people and businesses cut back on travel which impacted operating performance of the company as see during fiscals 2021 and 2022. Also, any weakening in the financial health of corporate customers and decline in their spending could affect GTTPL's revenue significantly. While company’s revenue is expected to improve in fiscal 2023 it is expected to remain moderate. Sustained increase in revenue with improving operating margin to remain rating sensitivity factor.

Liquidity Adequate

Company has access to fund-based limit of Rs 10 crore. Its utilization is low at around 12.50 percent for the past twelve months ended August 2022. While company had cash loss in fiscal 2022, cash accruals are expected to be moderate over Rs 3.7 Crore against no term debt obligation. In addition, it will be act as cushion to the liquidity of the company. Current ratio is moderate at 1.03 times on March 31, 2022. Low gearing and moderate net worth support its financial flexibility and provides the financial cushion available in case of any adverse conditions or downturn in the business.

Outlook Stable

CRISIL Ratings believe GTTPL will continue to benefit from the extensive experience of its promoter, and established relationships with clients. 

Rating Sensitivity factors

Upward factor 

  • Sustained improvement in scale of operation and operating margin, leading to higher cash accruals of above Rs 5.5 Crore on sustained basis
  • Sustenance of improved financial risk profile and expected improvement in working capital cycle 

 

Downward factor

  • Lower than expected improvement in revenue and operating margin leading to leading to net cash accrual lower than Rs. 2 crores
  • Large debt-funded capital expenditure or substantial increase in its working capital requirements weakening its liquidity & financial profile

About the Company

Incorporated in 1998, GTTPL is a travel solution company offering services such as corporate travel management and foreign exchange services. The company is promoted by Mr. Anup Rana, his wife Ms. Crislyn Dsouza.

Key Financial Indicators

As on / for the period ended March 31

 

2022

2021

Operating income

Rs crore

6.97

4.18

Reported profit after tax

Rs crore

-1.22

-1.30

PAT margins

%

-17.5

-31.11

Adjusted Debt/Adjusted Net worth

Times

--

0.01

Interest coverage

Times

-5.19

-0.43

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.crisil.com/complexity-levels. 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. Cr)  Complexity Levels  Rating  assigned with outlook 
NA  Cash Credit  NA  NA  NA  10 NA  CRISIL BB+/Stable 
NA  Proposed Fund-Based Bank Limits NA  NA  NA  10 NA  CRISIL BB+/Stable 

Annexure – List of entities consolidated: Not applicable

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 20.0 CRISIL BB+/Stable 29-08-22 Withdrawn (Issuer Not Cooperating)* 26-02-21 CRISIL BB+ /Stable(Issuer Not Cooperating)*   -- 20-11-19 CRISIL BB+/Stable CRISIL BB+/Stable
      -- 19-04-22 CRISIL B /Stable(Issuer Not Cooperating)*   --   -- 11-02-19 CRISIL BB+/Stable --
      --   --   --   -- 25-01-19 CRISIL BB+/Stable --
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
Cash Credit 10 IndusInd Bank Limited CRISIL BB+/Stable
Proposed Fund-Based Bank Limits 10 Not Applicable CRISIL BB+/Stable

This Annexure has been updated on 15-Nov-2022 in line with the lender-wise facility details as on 14-Nov-2022 received from the rated entity.

Criteria Details
Links to related criteria
Assessing Information Adequacy Risk
CRISILs Approach to Financial Ratios
CRISILs Bank Loan Ratings - process, scale and default recognition
Rating criteria for manufaturing and service sector companies
CRISILs Bank Loan Ratings
Understanding CRISILs Ratings and Rating Scales

Media Relations
Analytical Contacts
Customer Service Helpdesk

Aveek Datta
Media Relations
CRISIL Limited
M: +91 99204 93912
B: +91 22 3342 3000
AVEEK.DATTA@crisil.com

Prakruti Jani
Media Relations
CRISIL Limited
M: +91 98678 68976
B: +91 22 3342 3000
PRAKRUTI.JANI@crisil.com

Rutuja Gaikwad 
Media Relations
CRISIL Limited
B: +91 22 3342 3000
Rutuja.Gaikwad@ext-crisil.com


Rahul Subrato Kumar Guha
Director
CRISIL Ratings Limited
D:+91 22 4097 8320
rahul.guha@crisil.com


Rushabh Pramod Borkar
Team Leader
CRISIL Ratings Limited
D:+91 22 3342 3390
rushabh.borkar@crisil.com


ANIKET NAVALKISHOR RATHI
Senior Rating Analyst
CRISIL Ratings Limited
B:+91 22 3342 3000
ANIKET.RATHI@crisil.com
Timings: 10.00 am to 7.00 pm
Toll free Number:1800 267 1301

For a copy of Rationales / Rating Reports:
CRISILratingdesk@crisil.com
 
For Analytical queries:
ratingsinvestordesk@crisil.com


 

Note for Media:
This rating rationale is transmitted to you for the sole purpose of dissemination through your newspaper/magazine/agency. The rating rationale may be used by you in full or in part without changing the meaning or context thereof but with due credit to CRISIL Ratings. However, CRISIL Ratings alone has the sole right of distribution (whether directly or indirectly) of its rationales for consideration or otherwise through any media including websites and portals.


About CRISIL Ratings Limited (A subsidiary of CRISIL Limited)

CRISIL Ratings pioneered the concept of credit rating in India in 1987. With a tradition of independence, analytical rigour and innovation, we set the standards in the credit rating business. We rate the entire range of debt instruments, such as bank loans, certificates of deposit, commercial paper, non-convertible/convertible/partially convertible bonds and debentures, perpetual bonds, bank hybrid capital instruments, asset-backed and mortgage-backed securities, partial guarantees and other structured debt instruments. We have rated over 33,000 large and mid-scale corporates and financial institutions. We have also instituted several innovations in India in the rating business, including ratings for municipal bonds, partially guaranteed instruments and infrastructure investment trusts (InvITs).
 
CRISIL Ratings Limited ('CRISIL Ratings') is a wholly-owned subsidiary of CRISIL Limited ('CRISIL'). CRISIL Ratings Limited is registered in India as a credit rating agency with the Securities and Exchange Board of India ("SEBI").
 
For more information, visit www.crisilratings.com 

 



About CRISIL Limited

CRISIL is a global analytical company providing ratings, research, and risk and policy advisory services. We are India's leading ratings agency. We are also the foremost provider of high-end research to the world's largest banks and leading corporations.

CRISIL is majority owned by S&P Global Inc, a leading provider of transparent and independent ratings, benchmarks, analytics and data to the capital and commodity markets worldwide.


For more information, visit www.crisil.com

Connect with us: TWITTER | LINKEDIN | YOUTUBE | FACEBOOK


CRISIL PRIVACY NOTICE
 
CRISIL respects your privacy. We may use your contact information, such as your name, address and email id to fulfil your request and service your account and to provide you with additional information from CRISIL. For further information on CRISIL’s privacy policy please visit www.crisil.com.



DISCLAIMER

This disclaimer is part of and applies to each credit rating report and/or credit rating rationale (‘report’) that is provided by CRISIL Ratings Limited (‘CRISIL Ratings’). To avoid doubt, the term ‘report’ includes the information, ratings and other content forming part of the report. The report is intended for the jurisdiction of India only. This report does not constitute an offer of services. Without limiting the generality of the foregoing, nothing in the report is to be construed as CRISIL Ratings providing or intending to provide any services in jurisdictions where CRISIL Ratings does not have the necessary licenses and/or registration to carry out its business activities referred to above. Access or use of this report does not create a client relationship between CRISIL Ratings and the user.

We are not aware that any user intends to rely on the report or of the manner in which a user intends to use the report. In preparing our report we have not taken into consideration the objectives or particular needs of any particular user. It is made abundantly clear that the report is not intended to and does not constitute an investment advice. The report is not an offer to sell or an offer to purchase or subscribe for any investment in any securities, instruments, facilities or solicitation of any kind to enter into any deal or transaction with the entity to which the report pertains. The report should not be the sole or primary basis for any investment decision within the meaning of any law or regulation (including the laws and regulations applicable in the US).

Ratings from CRISIL Ratings are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold or sell any securities/instruments or to make any investment decisions. Any opinions expressed here are in good faith, are subject to change without notice, and are only current as of the stated date of their issue. CRISIL Ratings assumes no obligation to update its opinions following publication in any form or format although CRISIL Ratings may disseminate its opinions and analysis. The rating contained in the report is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment or other business decisions. The recipients of the report should rely on their own judgment and take their own professional advice before acting on the report in any way. CRISIL Ratings or its associates may have other commercial transactions with the entity to which the report pertains.

Neither CRISIL Ratings nor its affiliates, third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively, ‘CRISIL Ratings Parties’) guarantee the accuracy, completeness or adequacy of the report, and no CRISIL Ratings Party shall have any liability for any errors, omissions or interruptions therein, regardless of the cause, or for the results obtained from the use of any part of the report. EACH CRISIL RATINGS PARTY DISCLAIMS ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. In no event shall any CRISIL Ratings Party be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of any part of the report even if advised of the possibility of such damages.

CRISIL Ratings may receive compensation for its ratings and certain credit-related analyses, normally from issuers or underwriters of the instruments, facilities, securities or from obligors. Public ratings and analysis by CRISIL Ratings, as are required to be disclosed under the regulations of the Securities and Exchange Board of India (and other applicable regulations, if any), are made available on its website, www.crisilratings.com (free of charge). Reports with more detail and additional information may be available for subscription at a fee – more details about ratings by CRISIL Ratings are available here: www.crisilratings.com.

CRISIL Ratings and its affiliates do not act as a fiduciary. While CRISIL Ratings has obtained information from sources it believes to be reliable, CRISIL Ratings does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives and/or relies on in its reports. CRISIL Ratings has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process. CRISIL Ratings has in place a ratings code of conduct and policies for managing conflict of interest. For details please refer to:
https://www.crisil.com/en/home/our-businesses/ratings/regulatory-disclosures/highlighted-policies.html.

Rating criteria by CRISIL Ratings are generally available without charge to the public on the CRISIL Ratings public website, www.crisilratings.com. For latest rating information on any instrument of any company rated by CRISIL Ratings, you may contact the CRISIL Ratings desk at crisilratingdesk@crisil.com, or at (0091) 1800 267 1301.

This report should not be reproduced or redistributed to any other person or in any form without prior written consent from CRISIL Ratings.

All rights reserved @ CRISIL Ratings Limited. CRISIL Ratings is a wholly owned subsidiary of CRISIL Limited.

 

 

CRISIL Ratings uses the prefix ‘PP-MLD’ for the ratings of principal-protected market-linked debentures (PPMLD) with effect from November 1, 2011, to comply with the SEBI circular, "Guidelines for Issue and Listing of Structured Products/Market Linked Debentures". The revision in rating symbols for PPMLDs should not be construed as a change in the rating of the subject instrument. For details on CRISIL Ratings' use of 'PP-MLD' please refer to the notes to Rating scale for Debt Instruments and Structured Finance Instruments at the following link: https://www.crisil.com/en/home/our-businesses/ratings/credit-ratings-scale.html