October 12, 2012

Mumbai

Suraj Industries

Ratings Suspended

Total Bank Loan Facilities Rated	Rs.166.2 Million
Long-Term Rating	Suspended
Short-Term Rating	Suspended

(Refer to Annexure 1 for details on facilities)

CRISIL has suspended its ratings on the bank facilities of Suraj Industries (Suraj). The suspension of ratings is on account of non-cooperation by Suraj with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, Suraj is yet to provide adequate information to enable CRISIL to assess Suraj’s ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key credit factor in its rating process and non-sharing of information as a first signal of possible credit distress, as outlined in its criteria ‘Information Availability Risk in Credit Ratings’.

About the Group

CRISIL has combined the business and financial risk profiles of Suraj, SRV Polytex Pvt Ltd (SRV Polytex), and SRV Synthetics (SRVT), together referred to as the SRV group. This is because these entities are in the same line of business, have a common set of promoters, and have operational and financial linkages. Also, SRV Polytex has provided corporate guarantees for the bank loans of Suraj, and holds a 34 per cent stake in SRVT.

The SRV group, managed by Mr. Rajendra Shah and Mr. Sudhir Shah, has been in the polyester yarn business since 1977; the group entities are closely held within the Shah family. SRV Polytex was established in 1997, when the group first ventured into the production of texturised yarns. Suraj, a partnership firm, was set up in 2004-05 (refers to financial year, April 1 to March 31), while SRVT was set up in February 2010.

The SRV group specialises in the coarse polyester fibres segment (150 to 600 denier), and has an established market position. It has production facilities at Silvassa (Dadra and Nagar Haveli), and has an existing production capacity of about 37,100 tonnes per annum (tpa). The group is undertaking a capex programme for commissioning 15 machinery units having a total production capacity of 48,940 tpa; this project is being undertaken in SRVT.

Annexure 1 - Details of various bank facilities

Current facilities			Previous facilities
Facility	Amount (Rs. Million)	Rating	Facility	Amount (Rs. Million)	Rating
Bank Guarantee	6.5	Suspended	Bank Guarantee	6.5	CRISIL A2
Cash Credit	69	Suspended	Cash Credit	69	CRISIL BBB+/Stable
Rupee Term Loan	90.7	Suspended	Term Loan	90.7	CRISIL BBB+/Stable
Total	166.2	--	Total	166.2	--

Media Contacts	Analytical Contacts	CRISIL Rating Desk
Tanuja Abhinandan Communications and Brand Management CRISIL Limited Tel: +91-22- 3342 1818 Email: tanuja.abhinandan@crisil.com Shweta Ramchandani Communications and Brand Management CRISIL Limited Tel: +91-22- 3342 1886 E-mail: shweta.ramchandani@crisil.com	Subodh K Rai Senior Director - CRISIL Ratings Tel: +91-0124-672 2000 Email: subodh.rai@crisil.com	Tel: +91-22-3342 3047/3342 3064 Email:CRISILratingdesk@crisil.com

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Last updated: April 30, 2012

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