Detailed Rationale Due to inadequate information, CRISIL Ratings, in line with SEBI guidelines, had migrated the rating of JMT Auto Limited (JMT) to ‘CRISIL D/CRISIL D Issuer Not Cooperating'. However, post-acquisition of JMT by Ramkrishna Forgings Limited (RKFL), by the corporate insolvency resolution bidding process through National Company Law Tribunal (NCLT) vide the order dated 21st August 2023, the management has started sharing requisite information, necessary for carrying out comprehensive review of the rating. Consequently, CRISIL Ratings is migrating the rating on bank facilities of JMT from 'CRISIL D/CRISIL D Issuer Not Cooperating' to ‘CRISIL A/Stable’.
The ratings reflect strong funding support from RKFL, experienced promoters, and established relationships with major customers. These strengths are partially offset by the short track record of operations under RKFL and exposure to product concentration and cyclicality in the end user industry. |
Analytical Approach CRISIL Ratings has revised its analytical approach for arriving at the ratings of JMT and has factored in support from the parent, Ramkrishna Forging Limited (RKFL, rated CRISIL AA/Stable/CRISIL A1+) by applying the parent notch-up criteria. |
Key Rating Drivers & Detailed Description Strength:
Weaknesses:
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Liquidity: Adequate Repayment obligations of Rs 13-14 crore are expected to be sufficiently covered by net cash accruals and funding support of the parent, RKFL, in exigency. The promoters are likely to extend funding support to meet its working capital requirements and repayment obligations when required. |
Outlook: Stable CRISIL Ratings believes JMT will continue to benefit from the extensive experience of its promoter, and its established market position in the auto components industry. |
Rating Sensitivity factors Upward factors
Downward factors
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About the Company JMT (formerly, Jamshedpur Metal Treat Pvt Ltd) was initially incorporated as a private limited company on 30th April 1987 to commence the business as a Metal Treat Company, as an ancillary of Tata Motors Ltd, for manufacturing auto components. The company was acquired by RKFL in August 2023 through National Company Law Tribunal (NCLT). It has the capabilities to manufacture a range of components used in light commercial vehicles (LCVs), MHCVs and tractors. JMT has six plants in Jamshedpur.
About the parent company: Incorporated in 1981, RKFL is engaged in the manufacture and sale of forged components of automobiles, railway wagons and coaches, and engineering parts. It has manufacturing facilities at Gamaria, Adityapur Industrial Area, Baliguma, Dugni at Saraikela, Jamshedpur in Jharkhand and at Liluah in West Bengal. Shares are listed on National Stock Exchange of India (NSE) and Bombay Stock Exchange (BSE). |
Key Financial Indicators
*Provisional, taken over by RKFL in August 2023 |
Status of non cooperation with previous CRA: JMT has not cooperated with ICRA Limited which has classified it as non-cooperative vide release dated May 19, 2022. The reason provided by ICRA Limited is the non-furnishing of information for monitoring of ratings. |
Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
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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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