Rating Rationale

June 04, 2015

Mumbai

Lux Industries Limited

Ratings Suspended

Total Bank Loan Facilities Rated	Rs.2600 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 Lux Industries Ltd (LIL; part of the Lux group). The suspension of ratings is on account of non-cooperation by LILwith CRISIL's efforts to undertake a review of the ratings outstanding. Despite repeated requests by CRISIL, LIL is yet to provide adequate information to enable CRISIL to assess LIL's ability to service its debt. The suspension reflects CRISIL's inability to maintain a valid rating in the absence of adequate information. CRISIL considers information availability risk as a key credit factor in its rating process and 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 Group

For arriving at the ratings, CRISIL has combined the business and financial risk profiles of LIL, Todi Hosiery Pvt Ltd (THPL), and Ebel Polymers Pvt Ltd (Ebel), together referred to as the Lux group. This is because LIL and THPL share a common brand, common marketing and advertisement network, and common suppliers, whereas Ebel generates about 80 per cent of its revenues from export of innerwear manufactured by LIL under third-party brands. It also benefits from soft credit terms from LIL. The three entities also have a common management. Furthermore, CRISIL has treated the unsecured loan of Rs.850 million extended by the promoters and associate concerns as neither debt nor equity as these bear significantly low interest rates and are committed to be retained till currency of all external debt.

LIL was set up in 1995 by the Todi family based in Kolkata (West Bengal) as Lux Hosiery Industries Ltd for manufacturing and marketing innerwear, cots wool, and shorts under the Lux brand. The company was renamed LIL in 2007. THPL is also engaged in the same line of business. Ebel exports innerwear manufactured by LIL under third-party brands. Ebel also generates about 20 per cent of its revenues from sale of kidswear manufactured under the MOOKI brand.

Annexure 1 - Details of various bank facilities

Current facilities			Previous facilities
Facility	Amount (Rs.Million)	Rating	Facility	Amount (Rs.Million)	Rating
Bank Guarantee	15	Suspended	Bank Guarantee	15	CRISIL A2
Cash Credit	2110	Suspended	Cash Credit	2110	CRISIL BBB+/Stable
Proposed Long Term Bank Loan Facility	466.4	Suspended	Proposed Long Term Bank Loan Facility	466.4	CRISIL BBB+/Stable
Term Loan	8.6	Suspended	Term Loan	8.6	CRISIL BBB+/Stable
Total	2600	--	Total	2600	--

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Tanuja Abhinandan Media Relations CRISIL Limited Phone: +91 22 3342 1818 Email:tanuja.abhinandan@crisil.com Jyoti Parmar Media Relations CRISIL Limited Phone: +91 22 3342 1835 E-mail: jyoti.parmar@crisil.com	Vasudevan R Director - CRISIL Ratings Phone:+91 44 6656 3100 Email: vasudevan.r@crisil.com Mohit Makhija Director - CRISIL Ratings Phone:+91 124 672 2000 Email: mohit.makhija@crisil.com	Timings: 10.00 am TO 7.00 pm Toll free Number:1800 267 1301 Email: CRISILratingdesk@crisil.com

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About CRISIL Ratings
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June 04, 2015	http://www.crisil.com