| Indo-National Limited | ||||||
| Issuer not cooperating, based on best-available information; Ratings migrated to 'CRISIL BB+/Stable/CRISIL A4+ Issuer Not Cooperating' | ||||||
| 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 | ||||||
| *Issuer did not cooperate; based on best-available information | ||||||
| Please note that the rating(s) are based on best available information with the credit rating agency: the entity whose debt is being published via this rating rationale did not provide the requisite information needed to conduct the rating exercise or did not provide the No Default Statements (NDS) for the last three months and is therefore classified as 'non cooperative'. |
Non cooperation by Issuer CRISIL Ratings has been consistently following up with Indo-National Limited (INL) for obtaining information through emails dated June 23, 2023 and letter dated June 30, 2023, apart from telephonic communication. However, the issuer has remained non cooperative.
Further INL did not provide the No Default Statements (NDS) for the last three months. Therefore, the issuer is being classified as 'non cooperative' in line with Clause 11. 3 of SEBI CRA Operational Circular dated January 06, 2023.CRISIL Ratings has been consistently following up with INL for obtaining NDS through letters / emails dated April 28, 2023, May 31, 2023, June 7, 2023, June 15, 2023 and apart from telephonic communication to seek the same. After non-receipt of NDS for 2 consecutive months, we also sent a letter dated June 23, 2023 reminding the issuer to share the NDS. However, the issuer has remained non cooperative.
The investors, lenders and all other market participants should exercise due caution with reference to the rating assigned/reviewed with the suffix 'ISSUER NOT COOPERATING' as the rating is arrived at without any management interaction and is based on best available or limited or dated information on the company. Such non-co-operation by a rated entity may be a result of deterioration in its credit risk profile. These ratings with 'ISSUER NOT COOPERATING' suffix lack a forward-looking component.’ |
Detailed Rationale Despite repeated attempts to engage with the management, CRISIL Ratings failed to receive any information on either the business/operation related details and NDS from INL, which restricts CRISIL Ratings’ ability to take a forward-looking view on the entity's credit quality. Further, non-sharing of NDS by issuers may reflect operational issues faced by issuers in some cases.
CRISIL Ratings believes that rating action on INL is consistent with ‘Assessing Information Adequacy Risk’. Therefore, on account of inadequate information and lack of management cooperation, CRISIL Ratings has migrated the rating on bank facilities of INL from ‘CRISIL BBB+/Negative/CRISIL A4+’ to 'CRISIL BB+/Stable/CRISIL A4+ Issuer not cooperating'
CRISIL Ratings has withdrawn its ratings on Rs.35 crore of cash credit limit sanctioned by HSBC India Ltd on the request of the company and after receiving no objection from the bank. The rating action is in line with CRISIL Ratings’ policy on withdrawal of its ratings on bank loans. |
Analytical Approach For arriving at the rating, CRISIL Ratings has consolidated the business and financial risk profile of INL and its subsidiary, Kineco Ltd and its step down subsidiaries, due to common promoters and cash flow fungibility between these entities. Bill discounting outstanding at year end has been considered as debt.
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
About the Company Incorporated in 1972 as a joint venture (JV) between the late Mr. P Obul Reddy and Panasonic Corporation (leading Japanese electronics company, which subsequently exited the JV in 2012), Chennai-based INL (formerly, Nippo Batteries Company Ltd) manufactures and sells dry cell batteries and trades in torches, emergency power back-up products, and LEDs.
INL is the second-largest player in the dry cell batteries industry in India, with capacity of 78.5 crore battery per annum and a market share of above 30%. INL has an established distribution network comprising exclusive distributors, 2500 exclusive stockists, 26 depots, and 17 lakh retail outlets and wholesalers. In fiscal 2016, INL acquired 44.49% stake in Kineco, which manufactures composite for Railways, aerospace, and defence. Subsequently, in fiscal 2017, INL increase its stake in Kineco to 51%. Kineco also has a 51:49 joint venture, Kineco Kaman Composites Pvt Ltd, with Kaman Aerospace Group, USA, which manufactures advanced composites for medical, aerospace, and several other industries. INL also set up 4.6 megawatt solar power plant in Polepally village, Telangana, and has entered into a power purchase agreement with Deccan Hospitals. |
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)*
* - Issuer did not cooperate; based on best-available information |
Annexure - List of Entities Consolidated
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| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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* - Issuer did not cooperate; based on best-available information
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| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||
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Criteria Details
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