Rating Rationale
September 09, 2024 | Mumbai
Kothari Fermentation And Biochem Limited
Issuer not cooperating, based on best-available information; Ratings migrated to ‘CRISIL BB/Stable/CRISIL A4+ Issuer not cooperating'
 
Rating Action
Total Bank Loan Facilities RatedRs.44 Crore
Long Term RatingCRISIL BB /Stable (ISSUER NOT COOPERATING*; Rating Migrated)
Short Term RatingCRISIL A4+ (ISSUER NOT COOPERATING*; Rating Migrated)
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

The entity 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 Master Circular Dated May 16, 2024

 

CRISIL Ratings has been consistently following up with Kothari Fermentation And Biochem Limited (KFBL) for obtaining NDS through letters / emails dated June 29, 2024, July 31, 2024 and August 31, 2024 among others, apart from telephonic communication to seek the same. After non-receipt of NDS for 2 consecutive months, we also sent a letter dated August 23, 2024 reminding the issuer to share the NDS. However, the issuer has remained non cooperative. CRISIL Ratings has also tried to reach out to the lenders of KFBL to confirm timely debt servicing during these months, but awaits any feedback.

 

‘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 NDSs from KFBL, 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. On the other hand, it may be a beginning of a general non-cooperation and may extend to non-submission of other information.

 

CRISIL Ratings believes that rating action on KFBL is consistent with ‘Assessing Information Adequacy Risk’. Based on the last available information, the ratings on bank facilities of KFBL migrated to ‘CRISIL BB/Stable/CRISIL A4+ Issuer Not Cooperating’

About the Company

KFBL, incorporated in 1990, is promoted by Mr Moti Lal Kothari and Mr Pramod Kothari. The company produces yeast and its derivatives at its plant in Sikandrabad, Uttar Pradesh, which has installed capacity of 2,000 tonne per month.

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 13.00 NA CRISIL BB/Stable/Issuer Not Cooperating
NA Loan Against Property NA NA NA 3.90 NA CRISIL BB/Stable/Issuer Not Cooperating
NA Non-Fund Based Limit NA NA NA 5.00 NA CRISIL A4+/Issuer Not Cooperating
NA Proposed Long Term Bank Loan Facility NA NA NA 4.60 NA CRISIL BB/Stable/Issuer Not Cooperating
NA Term Loan NA NA NA 17.50 NA CRISIL BB/Stable/Issuer Not Cooperating

*Issuer did not cooperate; based on best-available information

Annexure - Rating History for last 3 Years
  Current 2024 (History) 2023  2022  2021  Start of 2021
Instrument Type Outstanding Amount Rating Date Rating Date Rating Date Rating Date Rating Rating
Fund Based Facilities LT 39.0 CRISIL BB /Stable(Issuer Not Cooperating)* 14-03-24 CRISIL BB/Stable 03-10-23 CRISIL BB/Stable 21-10-22 CRISIL BB+/Stable 22-03-21 CRISIL BBB-/Positive CRISIL BBB-/Stable
      --   -- 18-04-23 CRISIL BB+/Stable 30-05-22 CRISIL BBB-/Negative   -- --
Non-Fund Based Facilities ST 5.0 CRISIL A4+ (Issuer Not Cooperating)* 14-03-24 CRISIL A4+ 03-10-23 CRISIL A4+ 21-10-22 CRISIL A4+ 22-03-21 CRISIL A3 CRISIL A3
      --   -- 18-04-23 CRISIL A4+ 30-05-22 CRISIL A3   -- --
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 13 Kotak Mahindra Bank Limited CRISIL BB /Stable(Issuer Not Cooperating)*
Loan Against Property 3.9 Kotak Mahindra Bank Limited CRISIL BB /Stable(Issuer Not Cooperating)*
Non-Fund Based Limit 5 Kotak Mahindra Bank Limited CRISIL A4+ (Issuer Not Cooperating)*
Proposed Long Term Bank Loan Facility 4.6 Kotak Mahindra Bank Limited CRISIL BB /Stable(Issuer Not Cooperating)*
Term Loan 17.5 Kotak Mahindra Bank Limited CRISIL BB /Stable(Issuer Not Cooperating)*
* - Issuer did not cooperate; based on best-available information
Criteria Details
Links to related criteria
CRISILs Approach to Financial Ratios
Rating criteria for manufaturing and service sector companies
CRISILs Bank Loan Ratings - process, scale and default recognition
Assessing Information Adequacy Risk
Rating Criteria for Fast Moving Consumer Goods Industry
CRISILs Criteria for rating short term debt

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