Rating Rationale
May 23, 2019 | Mumbai
Thirumalai Chemicals Limited
Ratings Reaffirmed and Withdrawn
Rating Action
Total Bank Loan Facilities Rated Rs.581.54 Crore
Long Term Rating CRISIL A/Positive (Rating Reaffirmed and Withdrawn)
Short Term Rating CRISIL A1 (Rating reaffirmed and Withdrawn)
1 crore = 10 million
Refer to annexure for Details of Instruments & Bank Facilities
Detailed Rationale

CRISIL has reaffirmed its ratings on the bank facilities of Thirumalai Chemicals Limited (TCL) and subsequently withdrawn the rating at the company's request and on receipt of a no-objection certificate from the banker. The withdrawal is in line with CRISIL's policy on withdrawal of bank loan ratings.

Analytical Approach

For arriving at the ratings, CRISIL has combined the financial and business risk profiles of TCL and its subsidiaries. This is because these entities, collectively referred to as the TCL group, are in similar lines of business, and have operational linkages and financial fungibility.  

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

About the Company

TCL was set up in 1972 by Mr N S Iyengar and Mr N R Swamy. The company is part of the Thirumalai group, which has interests in commodity chemicals, pigments, surfactants, education and healthcare. TCL and its subsidiaries manufacture and sell commodity chemicals.

TCL commenced commercial production of PAN in 1976, and currently has a capacity of 145,000 tonnes per annum. It also manufactures derivatives of PAN such as food acids and esters. The group manufactures MAN through OOSB, which has an annual capacity of 42,000 tonnes. 

For fiscal 2019, on a consolidated basis, TCL reported a PAT of Rs 114 crore on net sales of Rs 1,261 crore against a PAT of Rs 170 crore on net sales of Rs 1,310 crore during the previous corresponding period.

Key Financial Indicators
Particulars Unit 2018 2017
Revenue Rs. Cr. 1,310 1,026
Profit After Tax (PAT) Rs. Cr. 170 71
PAT Margins % 13.0 6.9
Adjusted Debt/Adjusted Networth Times 0.1 0.15
Interest coverage Times 23 10

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 Cr) Rating Assigned with Outlook
NA Fund Based Facilities NA NA NA 70.6 Withdrawn
NA Fund Based Facilities* NA NA NA 104.4 Withdrawn
NA Non-Fund Based Limit* NA NA NA 206.6 Withdrawn
NA Non-Fund Based Limit NA NA NA 138.2 Withdrawn
NA Proposed Fund-Based Bank Limits NA NA NA 61.74 Withdrawn
*Of which Rs. 311 Cr are interchangeable between fund based and non-fund based limits
Annexure - List of Entities Consolidated
Name of Entities Consolidated  Extent of Consolidation Rationale for Consolidation
Optimistic Organic Sdn Bhd Full Consolidation Significant financial and operational linkages
Cheminvest Pte Ltd Full Consolidation Significant financial and operational linkages
Lapiz Europe Limited Full Consolidation Significant financial and operational linkages
Annexure - Rating History for last 3 Years
  Current 2019 (History) 2018  2017  2016  Start of 2016
Instrument Type Outstanding Amount Rating Date Rating Date Rating Date Rating Date Rating Rating
Fund-based Bank Facilities  LT/ST  236.74  Withdrawn      10-09-18  CRISIL A/Positive  26-10-17  CRISIL A-/Positive  17-11-16  CRISIL BBB+/Positive  -- 
            26-03-18  CRISIL A/Stable  14-03-17  CRISIL A-/Stable  28-01-16  CRISIL BBB+/Stable   
            05-03-18  CRISIL A/Stable  21-02-17  CRISIL BBB+/Positive       
Non Fund-based Bank Facilities  LT/ST  344.80  Withdrawn/ Withdrawn      10-09-18  CRISIL A/Positive/ CRISIL A1  26-10-17  CRISIL A1  17-11-16  CRISIL A2  -- 
            26-03-18  CRISIL A/Stable/ CRISIL A1  14-03-17  CRISIL A2+  28-01-16  CRISIL A2   
            05-03-18  CRISIL A1  21-02-17  CRISIL A2       
All amounts are in Rs.Cr.
Annexure - Details of various bank facilities
Current facilities Previous facilities
Facility Amount (Rs.Crore) Rating Facility Amount (Rs.Crore) Rating
Fund-Based Facilities* 104.4 Withdrawn Fund-Based Facilities* 104.4 CRISIL A/Positive
Fund-Based Facilities 70.6 Withdrawn Fund-Based Facilities 70.6 CRISIL A/Positive
Non-Fund Based Limit* 206.6 Withdrawn Non-Fund Based Limit* 206.6 CRISIL A/Positive
Non-Fund Based Limit 138.2 Withdrawn Non-Fund Based Limit 138.2 CRISIL A1
Proposed Fund-Based Bank Limits 61.74 Withdrawn Proposed Fund-Based Bank Limits 61.74 CRISIL A/Positive
Total 581.54 -- Total 581.54 --
*Of which Rs. 311 Cr are interchangeable between fund based and non-fund based limits
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
Rating Criteria for Petrochemical Industry
CRISILs Criteria for Consolidation

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