Rating Rationale
November 10, 2017 | Mumbai
Transpek Industry Limited
Rated amount enhanced
Rating Action
Total Bank Loan Facilities Rated Rs.231.35 Crore
Long Term Rating CRISIL A-/Positive (Reaffirmed)
Short Term Rating CRISIL A2+ (Reaffirmed)
Rs.37.16 Crore Fixed Deposits Programme (Enhanced From Rs.36.62 Crore) FA/Positive (Reaffirmed)
Rs.20 Crore Commercial Paper Programme (Enhanced From Rs.10 Crore) CRISIL A2+ (Reaffirmed)
1 crore = 10 million
Refer to annexure for Details of Instruments & Bank Facilities
Detailed Rationale

CRISIL's ratings on the bank facilities, fixed deposit and commercial paper programme of Transpek Industry Limited (TIL) continue to reflect expectation of significant increase in scale of operations, supported by long-term 'take-or-pay' supply agreement with the customer. TIL is in the midst of a substantial capacity enhancement in the acid chlorides segment. The plant is expected to be commissioned by January 2018. Despite the large debt-funded capex, financial risk profile is expected to remain strong over the medium term.

The ratings continue to reflect the diversified revenue profile in terms of end-user industries, customer profile, and geographic presence. These rating strengths are partially offset by working capital-intensive operations and exposure to risks inherent in the chemical industry.

Key Rating Drivers & Detailed Description
* Diversification in revenue profile: The company caters to various industries, such as polymers, agrochemicals, plastics, performance materials, coatings, pharmaceuticals, personal care, and flavours and fragrances. Furthermore, overseas markets, including the USA, South Korea and Europe, contribute to around 65% of revenue. The long-term supply contract with risk mitigating clauses, offsets any uncertainty in terms of future revenue streams and recovery on investment cost.
* Strong financial risk profile: Networth and total outside liabilities to adjusted networth (TOL/ANW) ratio stood at Rs 106.7 crore and 1.4 times, respectively, as on March 31, 2017. Net cash accrual to total debt and interest coverage ratios were 37% and above 6.6 times, respectively, for fiscal 2017. Financial risk profile is expected to remain healthy over the medium term, despite the debt-funded capital expenditure (capex).
* Working capital intensity in operations: Operations remain working capital intensive, with gross current assets of 136 days as on March 31, 2017, against 121 days a year before, led by receivables and inventory of 79 and around 50 days, respectively.
* Exposure to risks inherent in the chemical industry: Revenue and profitability are vulnerable to government policies related to pollution control, product toxicity, or import and export of raw materials. Turnover from the agrochemicals segment is also susceptible to uneven monsoon, while fluctuating input cost can adversely impact profitability.
Outlook: Positive

CRISIL believes TIL will benefit from significant revenue growth, backed by the long-term supply contract, in the medium term. Steady growth in turnover and cash accrual should help the financial risk profile sustain at healthy levels. The ratings may be upgraded upon successful completion of the capex and stabilisation of enhanced capacities, amidst sustenance in the operating profit margin and financial risk profile. The outlook may be revised to 'Stable' if revenue or profitability is lower than expected, or if financial risk profile weakens due to stretched working capital cycle or large debt-funded capex.

About the Company

TIL was set up by Mr Shroff and his family members in 1965. The Vadodara (Gujarat)-based company manufactures and exports chemicals, mainly acid and alkyl chlorides. Exports account for 60-65% of sales, with the domestic market forming the balance. The company is listed on the Bombay Stock Exchange.

The group reported profit after tax (PAT) of Rs 3.8 crore on revenue of Rs 78.64 crore in the first quarter of fiscal 2018, vis-a-vis Rs 7.17 crore and Rs 68.76 crore, respectively, in the same period of the previous fiscal.

Key Financial Indicators
Particulars Unit 2017 2016
Revenue Rs crore 316.7 283.8
Profit after tax Rs crore 29.4 21.3
PAT margin % 9.3% 7.5%
Adjusted debt/adjusted net worth Times 0.8 0.7
Interest coverage Times 6.6 4.7

Status of non cooperation with previous CRA
TIL has not provided required information for carrying out a review of the rating and hence Brickworks ratings was unable to carry out surveillance due to non-availability of information, despite follow 'up.

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
rate (%)
Maturity date Issue size
(Rs crore)
Rating assigned
with outlook
NA Cash credit NA NA NA 44.75 CRISIL
NA Proposed cash credit NA NA NA 45.00 CRISIL
NA Letter of credit NA NA NA 26.0 CRISIL A2+
NA Inland/ Import Letter of credit NA NA NA 19.0 CRISIL A2+
NA Bank guarantee NA NA NA 0.64 CRISIL A2+
NA Term loan NA NA Jun-23 65.0 CRISIL
NA Term loan NA NA Aug-19 17.01 CRISIL
NA Proposed Long Term Bank Loan Facility NA NA NA 10.75 CRISIL
NA Loan equivalent risk limits NA NA NA 1.20 CRISIL
NA Standby letter of credit NA NA NA 2.00 CRISIL
NA Fixed deposits programme NA NA NA 37.16 FA/Positive
NA Commercial paper programme NA NA 7 to 365 Days 20.0 CRISIL
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  20  CRISIL A2+  20-03-17  CRISIL A2+    No Rating Change  04-06-15  CRISIL A2    --  -- 
Fixed Deposits  FD  37.16  FA/Positive  09-10-17  FA/Positive    No Rating Change    No Rating Change  08-10-14  FA-/Stable  -- 
        20-03-17  FA/Stable               
Fund-based Bank Facilities  LT/ST  183.71  CRISIL A-/Positive/ CRISIL A2+  09-10-17  CRISIL A-/Positive/ CRISIL A2+    No Rating Change  04-06-15  CRISIL BBB+/Stable  08-10-14  CRISIL BBB/Stable  -- 
        20-03-17  CRISIL A-/Stable               
Non Fund-based Bank Facilities  LT/ST  47.64  CRISIL A-/Positive/ CRISIL A2+  09-10-17  CRISIL A-/Positive/ CRISIL A2+  28-07-16  CRISIL BBB+/Stable/ CRISIL A2  04-06-15  CRISIL A2  08-10-14  CRISIL A3+  -- 
        20-03-17  CRISIL A-/Stable/ 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
Bank Guarantee .64 CRISIL A2+ Bank Guarantee .64 CRISIL A2+
Cash Credit 44.75 CRISIL A-/Positive Cash Credit 44.75 CRISIL A-/Positive
Inland/Import Letter of Credit 19 CRISIL A2+ Inland/Import Letter of Credit 19 CRISIL A2+
Letter of Credit 26 CRISIL A2+ Letter of Credit 26 CRISIL A2+
Loan Equivalent Risk Limits 1.2 CRISIL A2+ Loan Equivalent Risk Limits 1.2 CRISIL A2+
Proposed Cash Credit Limit 45 CRISIL A-/Positive Proposed Cash Credit Limit 45 CRISIL A-/Positive
Proposed Long Term Bank Loan Facility 10.75 CRISIL A-/Positive Proposed Long Term Bank Loan Facility 10.75 CRISIL A-/Positive
Standby Letter of Credit 2 CRISIL A-/Positive Standby Letter of Credit 2 CRISIL A-/Positive
Term Loan 82.01 CRISIL A-/Positive Term Loan 82.01 CRISIL A-/Positive
Total 231.35 -- Total 231.35 --
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 Chemical Industry
CRISILs Criteria for Consolidation
CRISILs Criteria for rating short term debt

For further information contact:
Media Relations
Analytical Contacts
Customer Service Helpdesk
Saman Khan
Media Relations
CRISIL Limited
D: +91 22 3342 3895
B: +91 22 3342 3000

Naireen Ahmed
Media Relations
CRISIL Limited
D: +91 22 3342 1818
B: +91 22 3342 3000

Jyoti Parmar
Media Relations
CRISIL Limited
D: +91 22 3342 1835
B: +91 22 3342 3000

Arvind Rao
Director - CRISIL Ratings
CRISIL Limited
D:+91 22 4097 8278

Athul Sreelatha
Rating Analyst - CRISIL Ratings
CRISIL Limited
B:+91 22 3342 3000

Timings: 10.00 am to 7.00 pm
Toll free Number:1800 267 1301

For a copy of Rationales / Rating Reports:
For Analytical queries:


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. However, CRISIL 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 Limited

CRISIL is an agile and innovative, global analytics company driven by its mission of making markets function better. We are India’s foremost provider of ratings, data, research, analytics and solutions. A strong track record of growth, culture of innovation and global footprint sets us apart. We have delivered independent opinions, actionable insights, and efficient solutions to over 100,000 customers.

We are 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 


About CRISIL Ratings
CRISIL Ratings is part of CRISIL Limited (“CRISIL”). We pioneered the concept of credit rating in India in 1987. CRISIL is registered in India as a credit rating agency with the Securities and Exchange Board of India (“SEBI”). With a tradition of independence, analytical rigour and innovation, CRISIL sets 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 24,500 large and mid-scale corporates and financial institutions. CRISIL has also instituted several innovations in India in the rating business, including rating municipal bonds, partially guaranteed instruments and microfinance institutions. We also pioneered a globally unique rating service for Micro, Small and Medium Enterprises (MSMEs) and significantly extended the accessibility to rating services to a wider market. Over 1,10,000 MSMEs have been rated by us.


CRISIL respects your privacy. We 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 and other parts of S&P Global Inc. and its subsidiaries (collectively, the “Company) you may find of interest.

For further information, or to let us know your preferences with respect to receiving marketing materials, please visit www.crisil.com/privacy. You can view the Company’s Customer Privacy at https://www.spglobal.com/privacy

Last updated: April 2016


This disclaimer forms part of and applies to each credit rating report and/or credit rating rationale that we provide (each a “Report”). 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 providing or intending to provide any services in jurisdictions where CRISIL 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 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 Rating 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 assumes no obligation to update its opinions following publication in any form or format although CRISIL may disseminate its opinions and analysis. CRISIL rating 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.

Neither CRISIL nor its affiliates, third party providers, as well as their directors, officers, shareholders, employees or agents (collectively, “CRISIL Parties”) guarantee the accuracy, completeness or adequacy of the Report, and no CRISIL 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 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 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’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 CRISIL ratings are available here: www.crisilratings.com.

CRISIL and its affiliates do not act as a fiduciary. While CRISIL has obtained information from sources it believes to be reliable, CRISIL 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 keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of the respective activity. As a result, certain business units of CRISIL may have information that is not available to other CRISIL business units. CRISIL has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process. CRISIL 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

CRISIL’s rating criteria are generally available without charge to the public on the CRISIL public web site, www.crisil.com. For latest rating information on any instrument of any company rated by CRISIL 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.

All rights reserved @ CRISIL