| Trafiksol ITS Technologies Limited | ||||||
| Ratings revised to ‘Watch with Negative Implications' | ||||||
| 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 revised its ratings watch on the bank facilities of Trafiksol ITS Technologies Ltd (TITL) to 'Rating Watch with Negative Implications' from 'Rating Watch with Developing Implications'.
The change in the rating watch from developing to negative follows the investigation by the Securities and Exchange Board of India (SEBI) pursuant to the initial public offering (IPO) of TITL, which was directed to be kept in abeyance. SEBI, in its order no. WTM/AB/CFD/CFD-SEC-1/31023/2024-25 dated December 3, 2024, shared major findings on the intent of diversion of funds through misleading objects of the issue, misstatement of financial statements disclosed in the prospectus and concealment of material fact in the prospectus. Moreover, SEBI has directed TITL to refund the money paid by investors who have been allotted shares in the IPO.
CRISIL Ratings has also taken note that TITL has appealed to the Securities Appellate Tribunal (SAT) wherein SAT passed an interim order on December 6, 2024, granting a stay on the SEBI order and directing not to disburse the investors’ money (IPO proceeds) till its further order.
CRISIL Ratings believes that if the findings of SEBI are upheld, there will a significant impact on the business and financial risk profiles of TITL over the medium term. CRISIL Ratings will continue to monitor any adverse outcome of further action by regulatory authorities and the impact of orders and/or further developments of these orders on the credit risk profile, including fund raising ability, of TITL.
The ratings reflect the healthy diversity in TITL’s product portfolio and clientele and the company’s above-average operating profitability. The strengths are partially offset by the company’s modest scale of operations with exposure to risks inherent in tender-based business, large working capital requirement and modest financial risk profile. |
Analytical Approach While arriving at the ratings CRISIL Ratings has evaluated standalone business and financial risk profile of TITL. |
Key Rating Drivers & Detailed Description Strengths:
Weaknesses:
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Liquidity: Adequate Bank limit utilisation was low at 21% on average for the 12 months through March 2024. Cash accrual is expected at Rs 8.5-10.0 crore against term debt obligation of Rs 2.5-3.5 crore over the medium term. Any adverse outcome on account of the action taken by SEBI or any other regulatory authority, and non-availability of the IPO funds will impact the company’s working capital management and overall liquidity.
The current ratio was healthy at 2.91 times as on March 31, 2024. The promoters are likely to extend support in the form of equity and unsecured loans to meet working capital requirement and debt obligations. Low gearing and moderate networth support the company’s financial flexibility. |
Rating sensitivity factors Upward factors:
Downward factors:
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About the Company TITL (previously known as Trafiksol ITS Technologies Pvt Ltd) was incorporated in March 2018. The company is a specialised EPC contractor and undertakes a variety of projects in the fields of advanced traffic management systems, toll management systems, and tunnel management systems. It develops, designs and installs electrical, electronic fee collection, tunnel management and highway traffic management systems. It also provides maintenance for the systems installed.
TITL is promoted and managed by Mr Jitendra Narayan Das (Chairman and managing director) and Ms Poonam Das (whole-time director). |
Key Financial Indicators
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Any other information: Not Applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
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| 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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