Rating Rationale
September 14, 2023 | Mumbai
Indo-National Limited
Issuer not cooperating, based on best-available information; Ratings continues to be 'CRISIL BB+/Stable/CRISIL A4+ Issuer Not Cooperating'; Ratings Withdrawn
 
Rating Action
Total Bank Loan Facilities RatedRs.50 Crore
Long Term RatingCRISIL BB+/Stable (ISSUER NOT COOPERATING*; Rating Withdrawn)
Short Term RatingCRISIL A4+ (ISSUER NOT COOPERATING*; Rating Withdrawn)
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
*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 rating rationale did not provide the requisite information needed to conduct the rating exercise or did not provide the No Default Statements (NDS) for the last three months and is therefore classified as 'non cooperative'.

Non cooperation by Issuer

CRISIL Ratings has been consistently following up with Indo-National Ltd (INL) for obtaining information through emails dated June 23, 2023 and letter dated June 30,2023, apart from telephonic communication. However, the issuer has remained non cooperative.

 

Earlier, the entity did not provide the No Default Statements (NDS) for the three consecutive months. Therefore, the issuer was classified as 'non cooperative' in line with Clause 11.3 of SEBI CRA Operational Circular dated January 06, 2023. Further the company did not provide information required as part of continous review and monitoring.

 

The investors, lenders and all other market participants should exercise due caution with reference to the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived at without any management interaction and is based on best available or limited or dated information on the company. Such non-co-operation by a rated entity may be a result of deterioration in its credit risk profile. These ratings with 'ISSUER NOT COOPERATING' suffix lack a forward-looking component.’

Detailed Rationale

CRISIL Ratings has not received any information on either the financial performance or strategic intent of INL and NDS from INL, which restricts CRISIL Ratings’ ability to take a forward-looking view on the entity's credit quality. CRISIL Ratings believes that rating action on INL  is consistent with ‘Assessing Information Adequacy Risk’

 

.Therefore, on account of inadequate information and lack of management cooperation and based on the last available information, the ratings on bank facilities of INL continues to be 'CRISIL BB+/Stable/CRISIL A4+ Issuer Not Cooperating'

 

CRISIL Ratings has withdrawn its ratings on Rs.30 crore of bank facilities (cash credit limit ) sanctioned by HDFC Bank Ltd and proposed short term bank loan facilities of Rs.20 crore on the request of the company and after receiving no objection from the bank. The rating action is in line with CRISIL Ratings’ policy on withdrawal of its ratings on bank loan facilities

Analytical Approach

For arriving at the rating, CRISIL Ratings has consolidated the business and financial risk profile of INL and its subsidiary, Kineco Ltd and its step down subsidiaries, due to common promoters and cash flow fungibility between these entities. Bill discounting outstanding at year end has been considered as debt.

 

Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation

About the Company

Incorporated in 1972 as a joint venture (JV) between the late Mr. P Obul Reddy and Panasonic Corporation (leading Japanese electronics company, which subsequently exited the JV in 2012), Chennai-based INL (formerly, Nippo Batteries Company Ltd) manufactures and sells dry cell batteries and trades in torches, emergency power back-up products, and LEDs.

 

INL is the second-largest player in the dry cell batteries industry in India, with capacity of 78.5 crore battery per annum and a market share of above 30%. INL has an established distribution network comprising exclusive distributors, 2500 exclusive stockists, 26 depots, and 17 lakh retail outlets and wholesalers. In fiscal 2016, INL acquired 44.49% stake in Kineco, which manufactures composite for Railways, aerospace, and defence. Subsequently, in fiscal 2017, INL increase its stake in Kineco to 51%. Kineco also has a 51:49 joint venture, Kineco Kaman Composites Pvt Ltd, with Kaman Aerospace Group, USA, which manufactures advanced composites for medical, aerospace, and several other industries. INL also set up 4.6 megawatt solar power plant in Polepally village, Telangana, and has entered into a power purchase agreement with Deccan Hospitals.

Key Financial Indicators

As on/for the period ended March 31

Unit

2023

2022

Revenue

Rs crore

572

570

Profit after tax (PAT)

Rs crore

(8)

13

PAT margin

%

-1.4

2.3

Adjusted debt/adjusted networth

Times

0.60

0.55

Interest coverage

Times

1.77

3.95

 

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.crisilratings.com. 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

30.0

NA

CRISIL BB+/Stable/Issuer Not Cooperating (Withdrawn)

NA

Proposed Short Term Bank Loan Facility

NA

NA

NA

20.0

NA

CRISIL A4+/Issuer Not Cooperating (Withdrawn) 

*Issuer did not cooperate; based on best-available information 

Annexure - List of Entities Consolidated

Names of Entities Consolidated

Extent of Consolidation

Rationale for Consolidation

Kineco Limited

Fully Consolidated

Strong business and financial linkages

Annexure - Rating History for last 3 Years
  Current 2023 (History) 2022  2021  2020  Start of 2020
Instrument Type Outstanding Amount Rating Date Rating Date Rating Date Rating Date Rating Rating
Fund Based Facilities LT/ST 50.0 CRISIL BB+/Stable/CRISIL  A4+/Issuer Not Cooperating* (Withdrawn) 10-07-23 CRISIL BB+ /Stable / CRISIL A4+ (Issuer Not Cooperating)* 20-12-22 CRISIL A2+ / CRISIL A-/Negative   -- 19-10-20 CRISIL A/Stable CRISIL A1 / CRISIL A/Stable
      -- 25-04-23 CRISIL BBB+/Negative / CRISIL A2 27-01-22 CRISIL A1 / CRISIL A/Stable   -- 31-08-20 CRISIL A1 / CRISIL A/Stable CRISIL A1
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 30 HDFC Bank Limited CRISIL BB+/Stable/Issuer Not Cooperating* (Withdrawn)
Proposed Short Term Bank Loan Facility 20 Not Applicable CRISIL A4+/Issuer Not Cooperating* (Withdrawn)
* - Issuer did not cooperate; based on best-available information
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
Assessing Information Adequacy Risk
CRISILs Criteria for rating short term debt
CRISILs Criteria for Consolidation

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