| Aelea Commodities Limited | ||||||
| 'CRISIL BBB/Stable/CRISIL A3+' assigned to Bank Debt | ||||||
| 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 assigned its ‘CRISIL BBB/Stable/CRISIL A3+’ ratings to the bank facilities of Aelea Commodities Limited (Aelea).
The ratings reflect the company’s established presence in the cashew processing sector and strong relationships with suppliers and customers, leading to steady growth in scale over the last two fiscals. Enhancement in planned capacity of 140/metric tonne per day (as against 40 MT/day currently) will further support growth in scale. The rating also reflects the relatively comfortable financial risk profile, marked by low gearing, adequate coverage indicators and steady cash accrual reported over the years.
On July 22, 2024, Aelea successfully completed its initial public offering (IPO), and raised Rs 51 crore via fresh equity issuance. Part of the proceeds (Rs 32 crore) will be utilised for enhancing the cashew processing capacity, from 40 MT/day to 140 MT/day at its unit in Surat, Gujarat by January 2025. The total cost of this capex is Rs 42 crore.
These strengths are offset by the large working capital requirement and susceptibility to volatility in cashew prices and foreign exchange (forex) rates. |
Analytical Approach CRISIL Ratings has also combined the business and financial risk profiles of Aelea and its subsidiaries, considering the operational and financial linkages between the entities. With adoption of Ind AS 116 effective April 1, 2019, lease liabilities are treated as debt, while related adjustments are made for depreciation and amortisation and interest cost components.
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: Promoter’s strong experience and healthy relationship with customers: The promoters’ extensive experience, coupled with established relationships with customers, has resulted in repeat orders from various clients. Clientele includes marquee names such as Reliance Retail Ltd (‘CRISIL AAA/Stable/CRISIL A1+’), ITC Ltd (‘CRISIL AAA/Stable/CRISIL A1+’), Britannia Industries (‘CRISIL AAA/Stable/CRISIL A1+’), Farmley, etc. Healthy association with suppliers also provides easier access to raw cashew nuts.
Modest but improving scale of operations: Operating income has grown by nearly 26% to Rs 137 crore in fiscal 2024. This growth trajectory continued during fiscal 2025, with operating income growing nearly 40% to Rs 88 crore in the first half, compared with Rs 63 crore in the first half of fiscal 2024, driven by strong demand for processed cashews. Operating margin has improved to 10% in fiscal 2024, up from low single-digit levels earlier.
In fiscal 2024, nearly 46% of revenue came from sale of processed cashew (as against 36% in the previous fiscal year), while the balance came from trading of agriculture commodities. Going forward, share of sales from processed cashews will significantly outweigh the contribution from the trading arm, led by commissioning of the enhanced cashew processing capacity in January 2025.
Comfortable financial risk profile:
Weaknesses: Susceptibility to volatility in cashew prices and forex rates:
Working capital intensive nature of operations:
Exposure to intense competition: |
Liquidity: Adequate Bank limit utilisation averaged 72% for the 12 months through October 2024, though dependence on bank debt has reduced due to proceeds from the IPO. Cash accrual of Rs 15-35 crore is expected in the medium term, against minimal term debt and the absence of any major debt-funded capital expenditure. The current ratio was healthy at 1.51 times as on March 31, 2024. |
Outlook: Stable CRISIL Ratings believes Aelea will continue to benefit from the extensive experience of its promoters in the cashew processing business and their established relationships with suppliers and clients. |
Rating Sensitivity Factors Upward Factors
Downward Factors
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About the Company Aelea was incorporated in 2018, by the promoters, Mr Ashok Purshottam Patel, Mr Firoz Gulamhusein Hathiyari, Mr Hozefa Shabbir Jawadwala and Mr Satyanarayan Patro. The company started operations by trading in agro commodities (primarily sugar, rice and wheat flour). In fiscal 2022, it started processing raw cashew nuts after setting up a 40 MT/day capacity in Surat, Gujarat.
The company markets processed cashews under its brands, Supreme and Tryble. It is currently in the process of increasing its total installed cashew processing capacity to 140 MT / day.
The company was listed on the National Stock Exchange and the Bombay Stock Exchange on July 22, 2024. Post IPO, the promoters hold nearly 63.66% stake, while the balance shareholding is held by the public. |
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)
1Interchangeble as LC |
Annexure - List of Entities Consolidated
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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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2Interchangeble as multiline facilities
Criteria Details
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