July 13, 2012

Mumbai

Gandhi Special Tubes Limited

Ratings Suspended

Total Bank Loan Facilities Rated	Rs.95 Million
Long-Term Rating	Suspended
Short-Term Rating	Suspended

(Refer to Annexure 1 for Facility-wise details)

CRISIL has suspended its ratings on the bank facilities of Gandhi Special Tubes Limited (GSTL). The suspension of ratings is on account of non-cooperation by GSTL with CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, GSTL is yet to provide adequate information to enable CRISIL to assess GSTL ’s ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL views information availability risk as a key credit factor in its rating process and views non-sharing of information as a first signal of possible credit distress, as outlined in its criteria “Information availability risk in Credit ratings".

About the Company

GSTL was originally incorporated in 1985 by Mr Manhar Gandhi and his brother, Mr Bhupatrai Gandhi, as Gandhi Special O7 Tubes Ltd; the company was renamed in 1994. GSTL manufactures precision-welded and seamless steel tubes of small diameters. The company is one of the largest players in the business and caters to original equipment manufacturers as well as their vendors in the refrigeration, automotive, and general engineering industries. It has capacities of 24 million metres per annum (mmpa) and 16 mmpa for welded and seamless tubes, respectively, at its plant at Halol (Gujarat). The company also manufactures cold-formed nuts, which serve as complementary products to the tubes business. GSTL also has a wind power capacity of 5.35 megawatts.

Annexure 1 - Details of various bank facilities

Current facilities			Previous facilities
Facility	Amount (Rs. Million)	Rating	Facility	Amount (Rs. Million)	Rating
Letter of credit & Bank Guarantee	70	Suspended	Letter of credit & Bank Guarantee	70	CRISIL A1+
Cash Credit	25	Suspended	Cash Credit	25	CRISIL A+/Stable

Media Contacts	Analytical Contacts	CRISIL Rating Desk
Mitu Samar Director, Communications and Brand Management CRISIL Limited Tel: +91-22- 3342 1838 E-mail: mitu.samar@crisil.com Tanuja Abhinandan Communications and Brand Management CRISIL Limited Tel: +91-22- 3342 1818 Email: tanuja.abhinandan@crisil.com	Subodh K Rai Senior Director - CRISIL Ratings Tel: +91-0124-672 2000 Email: subodh.rai@crisil.com	Tel: +91-22-3342 3047/3342 3064 Email:CRISILratingdesk@crisil.com

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Last updated: April 30, 2012

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