Rating Rationale
August 29, 2025 | Mumbai
 
Vipul Organics Limited
Ratings migrated to 'Crisil BB+/Stable/Crisil A4+'; Rated amount enhanced for Bank Debt
 
Rating Action
Total Bank Loan Facilities Rated Rs.72 Crore (Enhanced from Rs.27.5 Crore)
Long Term Rating Crisil BB+/Stable (Migrated from 'Crisil B/Stable ISSUER NOT COOPERATING*')
Short Term Rating Crisil A4+ (Migrated from 'Crisil A4 ISSUER NOT COOPERATING*')
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
*Issuer did not cooperate; based on best-available information

 

Detailed Rationale

Due to inadequate information and in line with the Securities and Exchange Board of India guidelines, Crisil Ratings had migrated its ratings on the bank facilities of Vipul Organics Ltd (VOL; a part of the Vipul group) to ‘Crisil B/Stable/Crisil A4 Issuer Not Cooperating'. However, the management has subsequently started sharing requisite information for carrying out a comprehensive review of the ratings. Consequently, Crisil Ratings has migrating its ratings on the bank facilities of VOL to ‘Crisil BB+/Stable/Crisil A4+’ from ‘Crisil B/Stable/Crisil A4 Issuer Not Cooperating'.

 

The ratings reflect the extensive experience of the promoters in the dyes and pigments industry along with diversified product portfolio and geographical base and healthy financial risk profile of the group. These strengths are partially offset by exposure to intense competition, susceptibility to volatility in raw material prices and large working capital requirement.

Analytical Approach

Crisil Ratings has combined the business and financial risk profiles of VOL with its subsidiary, Shree Ambika Naturals Pvt Ltd (SANPL), together referred to as Vipul group.

 

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

Key Rating Drivers & Detailed Description

Strengths:

  • Extensive experience of the promoters: VOL (erstwhile known as Vipul Dye Chem) was founded in 1972 by Mr Pravin Chandra B Shah. Operations are managed by Mr Vipul P Shah, a chemical engineer with over three decades of experience in the dyes and pigments industry, and is assisted by his son, Mr Mihir Shah (whole-time director and chief financial officer) along with a professional line of management. Their leadership led the Vipul group to develop both domestic and export markets over the years, reaching to a scale of over Rs 160 crore in fiscal 2025 as compared to Rs 134 in fiscal 2023. The group is also setting up a new manufacturing facility in Gujarat, which may further boost business growth over the medium term. Expertise of the promoters, their strong understanding of market dynamics and healthy relations with customers and suppliers should continue to support the business.

 

  • Diversified product portfolio and geographical base: The Vipul group deals in numerus products across dyes, pigments and salts catering to industries such as paint, textiles, ink, paper etc. Sales span across 45 different nations ranging across but not limited to Africa, America and Latin America (deriving around 66% revenue from exports in fiscal 2025). This diversified geographical presence is expected to soften the impact of adverse business developments in any single geography, such as tariff imposition from Indian exports to US.

 

  • Healthy financial risk profile: The group’s financial risk profile may continue to improve over the medium term, with moderate reliance on external debt and steady accretion to reserve. Networth is estimated at over Rs 63 crore as on March 31, 2025, which has been improving with accretion, yielding gearing and total outside liabilities to adjusted networth of 0.7-0.8 time and 1.4-1.5 times as on March 31, 2025 (0.49 time and 1.32 times a year ago). Networth is further expected to increase driven by rights issue through which it raised Rs 20.47 crore in fiscal 2026 along with steady accretion to reserves in fiscal 2026. The capital structure is expected to remain comfortable, despite the ongoing debt-funded capital expenditure (capex) and continued reliance on working capital debt. Debt protection metrics were also healthy due to low leverage and healthy profitability. The interest coverage and net cash accrual to adjusted debt ratios are estimated at 5.5-6.0 times and 0.2-0.3 time, respectively, for fiscal 2025 (against 5.14 times and 0.27 time in the previous fiscal).

 

Weaknesses:

  • Exposure to intense competition: The industry is highly fragmented owing to low entry barrier of minimal capital requirement. Intense competition constrains scalability, as reflected in modest revenue of Rs 130-170 crore for the four fiscals ended fiscal 2025. The industry has low entry barriers given the minimal capital requirement, resulting in high fragmentation and presence of several organized players in the industry leading to high competition. This limits the negotiating power with suppliers and customers resulting in low pricing power and constrains the business risk profile of the company.  Modest scale constrains the operational flexibility of the group in the highly uncertain global market; improvement in scale remains crucial.

 

  • Susceptibility to volatility in raw material prices: The raw materials which account for 65-70% of operating income for past four fiscals through March 31, 2025. These are downstream petrochemical products and are therefore vulnerable to volatility in crude oil prices which remains susceptible to geopolitical and economic factors. Any adverse change in the same might impact the profitability of Vipul group and thus remains monitorable.

 

  • Large working capital requirement: The working capital cycle is likely to remain stretched and will be closely monitored. Gross current assets have been more than 200 days for the past four fiscals and were 220-230 days as on March 31, 2025, driven by debtors of 110-120 days and inventory of around 90 days. The group needs to extend high credit to clients and maintain huge inventory to meet business requirement.

Liquidity: Stretched

Net cash accrual is expected at Rs 10-12 crore per annum for fiscals 2026 and 2027, against yearly repayment obligation of Rs 6-9 crore. Timely completion and commencement of capex without any cost overrun remain important for the increase in scale and generation of healthy cash accrual, thus remaining key rating sensitivity factors. Bank limit utilisation was around 64% for the 12 months through July 2025. Liquidity further remains supported by the rights issue of VOL in fiscal 2026, raising Rs 20.47 crore, proceeds to be used for capex, working capital requirement and other administration purposes. Current ratio is estimated at around 1.2 times and cash and bank balance at about Rs 87 lakh on March 31, 2025.

Outlook: Stable

The Vipul group will continue to benefit from the extensive experience of its promoters and diversified geographic presence.

Rating sensitivity factors

Upward factors:

  • Sustained improvement in scale of operations along with sustenance of operating profitability, leading to healthy cash accrual such that net cash accrual to repayment obligation remains above 1.5 times on a sustained basis.
  • Improvement in the working capital cycle.

 

Downward factors:

  • Decline in scale of operations or operating profitability, resulting in net cash accrual dipping below Rs 9 crore.
  • Stretch in the working capital cycle, or any delay/cost overruns on the on-going capex resulting in stressed financial and liquidity profile.

About the Vipul Group

VOL was incorporated in 1972 as a private-limited company by Mr Pravichandra B Shah. It was revised into a public-limited entity in 1995 and listed on the Bombay Stock Exchange. The company is engaged in manufacturing pigment powder, pigment dispersion and fast colour bases and salts for a broad spectrum of industries ranging from paint, textile, pharmaceutical and printing ink and having presence both in local and international markets. It has three manufacturing units in Maharashtra at Tarapur, Ambernath and Palghar. It is also setting a greenfield project at Sayakha, Gujarat.

 

Mr Vipul P Shah is the managing director and Mr Mihir V Shah is the whole-time director and chief financial officer.

 

SANPL is a subsidiary of VOL.

Key Financial Indicators

As on/for the period ended March 31

 

12M 2025

2024

2023

Operating income

Rs crore

162.8

150.08

133.93

Reported profit after tax (PAT)

Rs crore

4.43

3.3

1.8

PAT margin

%

2.72

2.20

1.36

Adjusted debt/adjusted networth

Times

0.72

0.49

0.54

Interest coverage

Times

5.56

5.14

4.40

Status of non cooperation with previous CRA

Vipul group has not cooperated with India Ratings & Research which has classified it as non-cooperative vide release dated August 21, 2025. The reason provided by India Ratings & Research is non-furnishing of information for monitoring of ratings.

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 and are included (where applicable) in the 'Annexure - Details of Instrument' in this Rating Rationale.

Crisil Ratings will disclose complexity level for all securities - including those that are yet to be placed - based on available information. The complexity level for instruments may be updated, where required, in the rating rationale published subsequent to the issuance of the instrument when details on such features are available.

For more details on the Crisil Ratings` complexity levels please visit www.crisilratings.com. 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. Crore) Complexity Levels Rating Outstanding with Outlook
NA Cash Credit NA NA NA 3.00 NA Crisil BB+/Stable
NA Foreign Bill Purchase NA NA NA 27.00 NA Crisil A4+
NA Inland/Import Letter of Credit NA NA NA 2.40 NA Crisil A4+
NA Packing Credit NA NA NA 2.00 NA Crisil A4+
NA Working Capital Facility NA NA NA 7.00 NA Crisil BB+/Stable
NA Term Loan NA NA 31-May-26 1.03 NA Crisil BB+/Stable
NA Term Loan NA NA 31-May-29 28.50 NA Crisil BB+/Stable
NA Working Capital Term Loan NA NA 31-Mar-26 1.07 NA Crisil BB+/Stable

Annexure – List of entities consolidated

Names of Entities Consolidated

Extent of Consolidation

Rationale for Consolidation

Vipul Organics Limited

Full

Parent

Shree Ambika Naturals Private Limited

Full

Subsidiary
Annexure - Rating History for last 3 Years
  Current 2025 (History) 2024  2023  2022  Start of 2022
Instrument Type Outstanding Amount Rating Date Rating Date Rating Date Rating Date Rating Rating
Fund Based Facilities LT/ST 69.6 Crisil A4+ / Crisil BB+/Stable 28-03-25 Crisil B /Stable / Crisil A4 (Issuer Not Cooperating)* 31-01-24 Crisil B /Stable / Crisil A4 (Issuer Not Cooperating)*   -- 30-11-22 Crisil B /Stable / Crisil A4 (Issuer Not Cooperating)* Crisil B /Stable / Crisil A4 (Issuer Not Cooperating)*
Non-Fund Based Facilities ST 2.4 Crisil A4+ 28-03-25 Crisil A4 (Issuer Not Cooperating)* 31-01-24 Crisil A4 (Issuer Not Cooperating)*   -- 30-11-22 Crisil A4 (Issuer Not Cooperating)* Crisil A4 (Issuer Not Cooperating)*
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) Name of Lender Rating
Cash Credit 3 Axis Bank Limited Crisil BB+/Stable
Foreign Bill Purchase 3.4 Bank of Baroda Crisil A4+
Foreign Bill Purchase 17 Axis Bank Limited Crisil A4+
Foreign Bill Purchase 6.6 Bank of Baroda Crisil A4+
Inland/Import Letter of Credit 2.4 Bank of Baroda Crisil A4+
Packing Credit 2 Bank of Baroda Crisil A4+
Term Loan 1.03 Axis Bank Limited Crisil BB+/Stable
Term Loan 28.5 The Hongkong and Shanghai Banking Corporation Limited Crisil BB+/Stable
Working Capital Facility 7 The Hongkong and Shanghai Banking Corporation Limited Crisil BB+/Stable
Working Capital Term Loan 1.07 Axis Bank Limited Crisil BB+/Stable
Criteria Details
Links to related criteria
Basics of Ratings (including default recognition, assessing information adequacy)
Criteria for consolidation
Criteria for manufacturing, trading and corporate services sector (including approach for financial ratios)

Media Relations
Analytical Contacts
Customer Service Helpdesk

Ramkumar Uppara
Media Relations
Crisil Limited
M: +91 98201 77907
B: +91 22 6137 3000
ramkumar.uppara@crisil.com

Kartik Behl
Media Relations
Crisil Limited
M: +91 90043 33899
B: +91 22 6137 3000
kartik.behl@crisil.com

Divya Pillai
Media Relations
Crisil Limited
M: +91 86573 53090
B: +91 22 6137 3000
divya.pillai1@ext-crisil.com


Himank Sharma
Director
Crisil Ratings Limited
B:+91 124 672 2000
himank.sharma@crisil.com

Shalaka Singh
Associate Director
Crisil Ratings Limited
B:+91 22 6137 3000
shalaka.singh@crisil.com

Yuvraj Baheti
Rating Analyst
Crisil Ratings Limited
B:+91 22 6137 3000
yuvraj.baheti@crisil.com

Timings: 10.00 am to 7.00 pm
Toll free Number:1800 267 3850

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 and portals.


About Crisil Ratings Limited (A subsidiary of Crisil Limited, an S&P Global Company)

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 ratings for 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 leading, agile and innovative global analytics company driven by its mission of making markets function better. 

It is India’s foremost provider of ratings, data, research, analytics and solutions with a strong track record of growth, culture of innovation, and global footprint.

It has delivered independent opinions, actionable insights, and efficient solutions to over 100,000 customers through businesses that operate from India, the US, the UK, Argentina, Poland, China, Hong Kong and Singapore.

It 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 is part of and applies to each credit rating report and/or credit rating rationale ('report') provided by Crisil Ratings Limited ('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 use only within the jurisdiction of India. 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 provision or intention to provide any services in jurisdictions where Crisil Ratings does not have the necessary licenses and/or registration to carry out its business activities. Access or use of this report does not create a client relationship between Crisil Ratings and the user.

The report is a statement of opinion as on the date it is expressed, and it is not intended to and does not constitute investment advice within meaning of any laws or regulations (including US laws and regulations). The report is not an offer to sell or an offer to purchase or subscribe to any investment in any securities, instruments, facilities or solicitation of any kind to enter into any deal or transaction with the entity to which the report pertains. 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 and its associates do not act as a fiduciary. The report is based on the information believed to be reliable as of the date it is published, Crisil Ratings does not perform an audit or undertake due diligence or independent verification of any information it receives and/or relies on for preparation of the report. THE REPORT IS PROVIDED ON “AS IS” BASIS. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAWS, CRISIL RATINGS DISCLAIMS WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR OTHER WARRANTIES OR CONDITIONS, INCLUDING WARRANTIES OF MERCHANTABILITY, ACCURACY, COMPLETENESS, ERROR-FREE, NON-INFRINGEMENT, NON-INTERRUPTION, SATISFACTORY QUALITY, FITNESS FOR A PARTICULAR PURPOSE OR INTENDED USAGE. In no event shall Crisil Ratings, its associates, third-party providers, as well as their directors, officers, shareholders, employees or agents 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.

The report is confidential information of Crisil Ratings and Crisil Ratings reserves all rights, titles and interest in the rating report. The report shall not be altered, disseminated, distributed, redistributed, licensed, sub-licensed, sold, assigned or published any content thereof or offer access to any third party without prior written consent of Crisil Ratings.

Crisil Ratings or its associates may have other commercial transactions with the entity to which the report pertains or its associates. Ratings are subject to revision or withdrawal at any time by Crisil Ratings. 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 Ratings has in place a ratings code of conduct and policies for managing conflict of interest. For more detail, please refer to: https://www.crisil.com/en/home/our-businesses/ratings/regulatory-disclosures/highlighted-policies.html. Public ratings and analysis by Crisil Ratings, as are required to be disclosed under the Securities and Exchange Board of India regulations (and other applicable regulations, if any), are made available on its websites, www.crisilratings.com and https://www.ratingsanalytica.com (free of charge). Crisil Ratings shall not have the obligation to update the information in the Crisil Ratings report following its publication although Crisil Ratings may disseminate its opinion and/or analysis. Reports with more detail and additional information may be available for subscription at a fee.  Rating criteria by Crisil Ratings are available on the Crisil Ratings website, www.crisilratings.com. For the latest rating information on any company rated by Crisil Ratings, you may contact the Crisil Ratings desk at crisilratingdesk@crisil.com, or at (0091) 1800 267 3850.

Crisil Ratings shall have no liability, whatsoever, with respect to any copies, modifications, derivative works, compilations or extractions of any part of this [report/ work products], by any person, including by use of any generative artificial intelligence or other artificial intelligence and machine learning models, algorithms, software, or other tools. Crisil Ratings takes no responsibility for such unauthorized copies, modifications, derivative works, compilations or extractions of its [report/ work products] and shall not be held liable for any errors, omissions of inaccuracies in such copies, modifications, derivative works, compilations or extractions. Such acts will also be in breach of Crisil Ratings’ intellectual property rights or contrary to the laws of India and Crisil Ratings shall have the right to take appropriate actions, including legal actions against any such breach.

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 Ratings' use of 'PP-MLD' please refer to the notes to Rating scale for Debt Instruments and Structured Finance Instruments at the following link: https://www.crisilratings.com/en/home/our-business/ratings/credit-ratings-scale.html