Rating Rationale
November 30, 2021 | Mumbai
Sarveshwar Foods Limited
Issuer not cooperating, based on best-available information; Ratings Revised to ‘CRISIL B/Stable/CRISIL A4 Issuer not cooperating'
 
Rating Action
Total Bank Loan Facilities RatedRs.89 Crore
Long Term RatingCRISIL B /Stable (ISSUER NOT COOPERATING*; Revised from ‘CRISIL BB+/Stable ISSUER NOT COOPERATING*’)
Short Term RatingCRISIL A4 (ISSUER NOT COOPERATING*; Revised from ‘CRISIL A4+ ISSUER NOT COOPERATING*’)
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 Ratings has been consistently following up with Sarveshwar Foods Limited (SFL) for obtaining information through letters and emails dated August 19, 2021 and October 06, 2021 among others, apart from telephonic communication. However, the issuer has remained non cooperative.

 

‘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

Despite repeated attempts to engage with the management, CRISIL Ratings failed to receive any information on either the financial performance or strategic intent of SFL, which restricts CRISIL Ratings’ ability to take a forward looking view on the entity's credit quality. CRISIL Ratings believes that rating action on SFL is consistent with ‘Assessing Information Adequacy Risk’. Based on the last available information, the ratings on bank facilities of SFL revised to ‘CRISIL B/Stable/CRISIL A4 Issuer Not Cooperating’ from ‘CRISIL BB+/Stable/CRISIL A4+ Issuer Not Cooperating’.

 

CRISIL Ratings had earlier consolidated the business and financial risk profile of Sarveshwar Overseas Ltd (SOL) with SFL; together referred as Sarveshwar group due to significant business and financial fungibility between the entities. SFL holds 99% shareholding in SOL. Further, both the entities are in the same line of business and have common management. Further, both the entities have common customer and supplier base and market their product under the common brand name. CRISIL is now consolidating SOL and SFL along with Himalayan Bio Organic Foods Pvt Ltd (HBOP) and Natural Global Foods DMCC (NGFD) as these two entities have been carved out of SFL and SOL to focus on organic business and UAE operations, respectively. Further, both are wholly owned subsidiaries of SFL.

About the Company

SFL, incorporated in 2004 is a part of the Sarveshwar group. The company undertakes milling and processing of basmati rice, mainly PUSA 1121, at its plant in Jammu. SFL has milling and sorting capacity of 6 tonne rice per hour.

 

SOL was initially set up as a partnership firm in the name of Sarveshwar Overseas Mills with SFL and Mr. Rohit Gupta (promoter of the group) being the partners. SFL acquired 99% stake in SOL, which has a rice milling unit with capacity of 8 tons per hour (tph) at Badi Brahmna in Jammu.

Key Financial Indicators (Standalone)

 

H1 Apr-Sep 2021

Fiscal 2021

Revenue

134.59

231.15

Profit After Tax (PAT)

0.62

3.07

Operating Profit Margin (OPM)

4.13%

4.86%

Net Profit Margin (NPM)

0.46%

1.33%

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. The CRISIL Ratings' complexity levels are available on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL Ratings' 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. Cr)

Complexity Levels

Rating Assigned with Outlook

NA

Cash Credit

NA

NA

NA

80

NA

CRISIL B/Stable/Issuer Not Cooperating

NA

Packing Credit

NA

NA

NA

5

NA

CRISIL A4/Issuer Not Cooperating

NA

Proposed Long Term Bank Loan Facility

NA

NA

NA

2.52

NA

CRISIL B/Stable/Issuer Not Cooperating

NA

Warehouse Financing

NA

NA

NA

1.48

NA

CRISIL B/Stable/Issuer Not Cooperating

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

Annexure - Rating History for last 3 Years
  Current 2021 (History) 2020  2019  2018  Start of 2018
Instrument Type Outstanding Amount Rating Date Rating Date Rating Date Rating Date Rating Rating
Fund Based Facilities LT/ST 89.0 CRISIL A4 / CRISIL B /Stable(Issuer Not Cooperating)*   -- 31-08-20 CRISIL BB+ /Stable / CRISIL A4+ (Issuer Not Cooperating)* 03-05-19 CRISIL BBB-/Stable / CRISIL A3 28-12-18 CRISIL BBB-/Stable / CRISIL A3 CRISIL BBB-/Stable / CRISIL A3
      --   --   --   --   -- CRISIL BB+/Stable / CRISIL A4+
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) Rating
Cash Credit 80 CRISIL B /Stable(Issuer Not Cooperating)*
Packing Credit 5 CRISIL A4 (Issuer Not Cooperating)*
Proposed Long Term Bank Loan Facility 2.52 CRISIL B /Stable(Issuer Not Cooperating)*
Warehouse Financing 1.48 CRISIL B /Stable(Issuer Not Cooperating)*
* - 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
Assessing Information Adequacy Risk
CRISILs Criteria for Consolidation

Media Relations
Analytical Contacts
Customer Service Helpdesk

Pankaj Rawat
Media Relations
CRISIL Limited
B: +91 22 3342 3000
pankaj.rawat@crisil.com

 


Naireen Ahmed
Media Relations
CRISIL Limited
D: +91 22 3342 1818
B: +91 22 3342 3000
naireen.ahmed@crisil.com


Nitin Kansal
Director
CRISIL Ratings Limited
D:+91 124 672 2154
nitin.kansal@crisil.com


Akshita Jain
Associate Director
CRISIL Ratings Limited
D:+91 124 672 2189
Akshita.Jain@crisil.com


Devansh Jain
Senior Rating Analyst
CRISIL Ratings Limited
D:+91 124 672 2100
Devansh.Jain@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, portals etc.


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 rating 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 forms part of and applies to each credit rating report and/or credit rating rationale (each a "Report") that is provided by CRISIL Ratings Limited  (hereinafter referred to as "CRISIL Ratings") . For the avoidance of 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 or otherwise 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. Rating by CRISIL Ratings 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 company/entity.

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. CRISIL Rating's public ratings and analysis 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 web sites, www.crisil.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 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 analytical firewalls and for managing conflict of interest. For details please refer to: http://www.crisil.com/ratings/highlightedpolicy.html

Rating criteria by CRISIL Ratings are generally available without charge to the public on the CRISIL Ratings public web site, www.crisil.com. For latest rating information on any instrument of any company rated by CRISIL Ratings you may contact CRISIL RATING 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 a prior written consent of CRISIL Ratings.

All rights reserved @ CRISIL Ratings Limited. CRISIL Ratings Limited 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 Ratiings' use of 'PP-MLD' please refer to the notes to Rating scale for Debt Instruments and Structured Finance Instruments at the following link: www.crisil.com/ratings/credit-rating-scale.html