Rating Rationale
July 14, 2017 | Mumbai
NELCO Limited
Ratings Withdrawn
 
Rating Action
Total Bank Loan Facilities Rated Rs.146.84 Crore
Long Term Rating CRISIL BBB+/Stable (Withdrawal)
Short Term Rating CRISIL A2 (Withdrawal)
 
Rs.15 Crore Commercial Paper CRISIL A2 (Withdrawal)
1 crore = 10 million
Refer to annexure for Details of Instruments & Bank Facilities
Detailed Rationale

CRISIL has withdrawn its ratings on the bank loan facilities and Rs 15 crore commercial paper of NELCO Limited (Nelco; a part of the Nelco group) on Nelco's request, and on receipt of a no-objection certificate from the banker. The rating action is in line with CRISIL's policy on withdrawal of ratings.

About the Company

Nelco, established in 1940, is a subsidiary of The Tata Power Co Ltd (Tata Power; rated 'CRISIL AA-/Stable/CRISIL A1+'). It operates broadly under two verticals: automation and control division, and network systems division. Nelco has taken a cautious approach towards Integrated Security Surveillance Solutions (part of automation and control division) business by focusing on delivering its commitments towards customers for all the existing projects and restricting operations. Also, it divested the Unattended Ground Sensors business to Tata Power effective from October 1, 2014. The network systems segment, and wholly owned subsidiary Tatanet Services Ltd (TSL), provide communication services related to very small aperture terminal (VSAT). TSL, provides bandwidth and other services related to VSAT operations, thus complementing Nelco's operations.
 
In fiscal 2017, the Nelco group (on a consolidated basis) reported net profit of Rs 6.28 crore on net sales of Rs 143.67 crore. The Nelco group extended its financial year from September 30, 2015 to March 31, 2016. For the 18 months ended March 31, 2016, the group reported net profit of Rs 2.21 crore (adjusted for discontinued operations) on net sales of Rs 199.94 crore.

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 Allotment Coupon Rate (%) Maturity Date Issue Size (Rs. Crore) Rating Assigned with Outlook
NA Commercial Paper NA NA NA 15.0 Withdrawal
NA Long Term Loan 16-Feb-2012 11% p.a Apr-2020 7.5 Withdrawal
NA Letter of credit & Bank Guarantee NA NA NA 60.25 Withdrawal
NA Proposed Long Term Bank Loan Facility NA NA NA 13.95 Withdrawal
NA Proposed Short Term Bank Loan Facility NA NA NA 30.0 Withdrawal
NA Cash Credit* NA NA NA 27 Withdrawal
NA Cash Credit NA NA NA 8.14 Withdrawal
*Includes sublimit of Rs.15 crore for working capital demand loan
Annexure - Rating History for last 3 Years
  Current 2017 (History) 2016  2015  2014  Start of 2014
Instrument Type Quantum Rating Date Rating Date Rating Date Rating Date Rating Rating
Commercial Paper  ST  15  Withdrawal    No Rating Change  05-01-16  CRISIL A2    No Rating Change    No Rating Change  CRISIL A2+ 
Fund-based Bank Facilities  LT/ST  86.59  Withdrawal   No Rating Change  05-01-16  CRISIL BBB+/Stable/ CRISIL A2    No Rating Change    No Rating Change  CRISIL A-/Negative/ CRISIL A2+ 
Non Fund-based Bank Facilities  LT/ST  60.25  Withdrawal    No Rating Change  05-01-16  CRISIL A2    No Rating Change    No Rating Change  CRISIL A2+ 
Table reflects instances where rating is changed or freshly assigned. 'No Rating Change' implies that there was no rating change under the release.
Annexure - Details of various bank facilities
Current facilities Previous facilities
Facility Amount (Rs.Crore) Rating Facility Amount (Rs.Crore) Rating
Cash Credit* 27 Withdrawal Cash Credit* 27 CRISIL BBB+/Stable
Cash Credit 8.14 Withdrawal Cash Credit 8.14 CRISIL BBB+/Stable
Letter of credit & Bank Guarantee 60.25 Withdrawal Letter of credit & Bank Guarantee 60.25 CRISIL A2
Long Term Loan 7.5 Withdrawal Long Term Loan 7.5 CRISIL BBB+/Stable
Proposed Long Term Bank Loan Facility 13.95 Withdrawal Proposed Long Term Bank Loan Facility 13.95 CRISIL BBB+/Stable
Proposed Short Term Bank Loan Facility 30 Withdrawal Proposed Short Term Bank Loan Facility 30 CRISIL A2
Total 146.84 -- Total 146.84 --
*Includes sublimit of Rs.15 crore for working capital demand loan
Links to related criteria
CRISILs Approach to Financial Ratios
CRISILs Bank Loan Ratings - process, scale and default recognition
Rating criteria for manufaturing and service sector companies
CRISILs Criteria for Consolidation
Criteria for Notching up Stand Alone Ratings of Companies based on Parent Support
Criteria for rating Short-Term Debt (including Commercial Paper)

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