| Renaissance Global Limited | ||||||
| Ratings reaffirmed at 'CRISIL BBB+/Stable/CRISIL A2'; FD Withdrawn | ||||||
| Rating Action | ||||||
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| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale CRISIL Ratings has withdrawn its ratings on the Fixed Deposit programme of Renaissance Global Limited (RGL). The rating is withdrawn on the request of the company and confirmation that there are no outstanding fixed deposit obligations. The withdrawal is in line with CRISIL Ratings' policy for withdrawal of ratings.
CRISIL Ratings has also reaffirmed its ratings on the bank facilities of RGL at ‘CRISIL BBB+/Stable/CRISIL A2‘.
The ratings continue to reflect the group’s established market presence backed by the experience of the promoters, focus on increasing presence in the branded jewellery segment and comfortable capital structure. These strengths are partially offset by large working capital requirement and susceptibility to intense competition leading to moderate operating profit margin. |
Analytical Approach CRISIL Ratings has combined the business and financial risk profiles of RGL and its subsidiaries, collectively referred to as the Renaissance group, because of their strong business, operational and financial linkages.
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
Key Rating Drivers & Detailed Description Strengths: Established market presence backed by the experience of the promoters The extensive experience of the promoters of more than two decades has helped the group establish its position in the international diamond studded jewellery segment. The group is one of the largest exporters of studded jewellery from India, with manufacturing facilities in India and in the UAE. The group has longstanding relations with marquee customers such as Signet, Helzberg, JC Penny, Walmart, Malabar, etc. and have successfully navigated through several business cycles over the years.
Focus on increasing presence in the branded jewellery segment Renaissance group is continuously focusing on improving its presence in the branded jewellery segment. Group has signed a strategic licensing partnership with Disney, Hallmark and recently with National Football League (NFL) and is continuously looking on opportunities to expand its presence in branded jewellery segment.
Comfortable capital structure Networth was adequate at ~Rs 886 crore as on March 31, 2022, and total outside liabilities to adjusted networth ratio was moderate at ~1.19 times. Healthy accretion to reserves should support to maintain comfortable capital structure over the medium term.
Weaknesses: Large working capital requirement Operations have been working capital intensive, with gross current assets (GCA), inventory and receivables estimated at 277 days, 171 days and 75 days, respectively, as on March 31, 2022. Operations are estimated to remain working capital intensive over medium term.
Susceptibility to intense competition resulting in moderate operating profit margin The gems and jewellery industry is highly fragmented because of low entry barriers on account of relatively low capital and technology requirements, attracting numerous unorganised players across the country. |
Liquidity: Adequate RGL has adequate liquidity driven by unencumbered cash and cash equivalents of around Rs 182 crores as on March 31, 2022, along with access to fund-based bank lines of Rs 256.5 crore which were utilized to the tune of 71% for 6 months ended April 2022. Further, the group is expected to generate healthy net cash accruals over the medium term. As against this, the group has repayment obligations of around Rs 12.6 crore fiscal 2023 and fiscal 2024 each; and payments to be made to the erstwhile promoters of Jay Gems USA amounting to around Rs. 28 crore. Capex of around Rs. 30 crores in FY23, expected to be funded through internal accruals. CRISIL Ratings believes that going forward RGL's available liquidity, incremental net cash accruals and unutilized bank limits will be sufficient to fund its repayment obligations, capex plans and incremental working capital requirements. |
Outlook: Stable CRISIL Ratings believes RGL will continue to benefit from the extensive experience of its promoters and established presence in exports market. |
Upward factors
Downward factors
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About the Group The Renaissance group manufactures and trades in diamond studded jewellery. It manufactures generic as well as licensed branded jewellery. RGL, the holding company of the group, was incorporated in 1989 as Mayur Gems & Jewellery Exports Pvt Ltd. It was acquired by Mr Niranjan Shah and his family in 1995. It was reconstituted as a public limited company and acquired its present name in 2005. The company is engaged in wholesale manufacturing of jewellery in gold, silver, platinum, studded with polished diamonds, semi-precious and precious stones. RGL has sales subsidiaries in the US, the UK, and the UAE. Facilities are in Mumbai, Bhavnagar (Gujarat), and the UAE. |
Key Financial Indicators
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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. The CRISIL Ratings' complexity levels are available on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL Ratings' complexity levels for instruments that they consider for investment. Users may also call the Customer Service Helpdesk with queries on specific instruments. |
Annexure - Details of Instrument(s)
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Annexure – List of entities consolidated
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| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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This Annexure has been updated on 24-Jun-2022 in line with the lender-wise facility details as on 28-Apr-2022 received from the rated entity.
Criteria Details
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