| Manjushree Spntek Private Limited | ||||||
| Ratings Reaffirmed | ||||||
| Rating Action | ||||||
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| 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 reaffirmed its ‘CRISIL BBB-/Stable/CRISIL A3’ ratings on the bank facilities of Manjushree Spntek Private Limited (MSPL).
The ratings continue to reflect the extensive entrepreneurial experience of the promoters and healthy demand of non-woven fabric for medical applications. These strengths are partially offset by exposure to project risks and fluctuations in raw material prices.
MSPL reported estimated revenue of Rs 6 crore in fiscal 2023 following commencement of commercial operations of phase 1 of its project in November 2023. The company is expected to roll out phase 2 and phase 3 in July 2023 and March 2024, respectively. |
Key Rating Drivers & Detailed Description Strengths: Extensive experience of the promoters The promoters, Kedia family, have experience in running and managing Manjushree Technopack Ltd (MTL; ‘CRISIL AA-/Stable/CRISIL A1+’). MTL is one of the leading players in the rigid plastics packaging business in south-east Asia. The promoter family successfully scaled up operations of MTL to over Rs 1,150 crore in fiscal 2020 before divesting their entire stake in October 2020. They have experience in dealing with world-class technology with focus on high quality products and an established track record of project implementation. In MSPL as well, the focus would be to deliver high quality products using world class technology. Furthermore, the promoters are high networth individuals and will provide timely, need-based funds to aid operations.
Healthy demand of non-woven fabric for medical applications MSPL manufactures non-woven fabric of high quality for medical applications and demand for the same is likely to remain healthy over the long term owing to increased awareness of hygiene and infection control driven by the Covid-19 pandemic, and strong export potential as the supply is getting reallocated away from China due to China plus one strategy adopted by global players. MSPL is one of the few players focusing on manufacturing premium quality fabric for medical applications in India and stands to gain from the focus of large medical companies who want to expand their sales in India.
Weaknesses: While company has commissioned phase I of operations in a timely manner, it remains exposed to project risks for phase 2 and phase 3 While commercial operations for phase 1 have commenced in November 2022 (in line with expected timeline of January 2023), MSPL is on track to commission its treatment line by June 2023 and lamination line by March 2024. Timely commencement of operations for the two lines within budgeted cost and subsequent scaling up of operations will remain key monitorables.
Susceptibility of profitability to volatility in raw material prices The key raw material is polypropylene, which is a crude-based derivative and hence the operating profitability is exposed to fluctuations in raw material prices. Ability of the company to pass on price increases to customers will have an impact on profitability. However, this risk is mitigated by the experience of the promoters in dealing with this raw material for the past three decades. |
Liquidity: Adequate Liquidity derives comfort from the strong networth of the promoters, invested in debt and equity investments. The promoters will provide support in case of exigencies. While MSPL has completed phase 1 as part of the capital expenditure exercise as of November 2022, phases 2 and 3 are ongoing. The project has been funded through a mix of term loan and equity. |
Outlook: Stable The company will continue to benefit from extensive experience of the promoters and their healthy financial risk profile over the medium term. |
Rating Sensitivity Factors Upward factors
Downward factors
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About the Company MSPL, incorporated in August 2020, has completed setting up a facility for manufacturing technical textile non-woven fabric suitable for medical and hygiene applications with highest level of quality, AAMI (Association for the Advancement of Medical Instrumentation) level 4. The company is promoted by Mr Rajat Kedia and Mr Vimal Kedia. It commenced commercial operations in November 2022 and is expected to scale operations as it completes various phases of its planned expansion by March 2024. |
Key Financial Indicators
*Company was in project phase. | ||||||||||||||||||||||||
Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
*Sublimit of Rs 205 crore for capex LC |
| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||
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Criteria Details
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