Press Release October 01, 2024 DANALAKSHMI PAPER MILLS PRIVATE LIMITED Rating Downgraded,Reaffirmed and Issuer not co-operating

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	24.00	ACUITE B | Downgraded | Issuer not co-operating*	-
Bank Loan Ratings	15.00	-	ACUITE A4 | Reaffirmed | Issuer not co-operating*
Total Outstanding	39.00	-	-
Total Withdrawn	0.00	-	-
* The issuer did not co-operate; based on best available information.

Rating Rationale

Acuité has downgraded its long-term rating to ‘ACUITE B’ (read as ACUITE B) from ‘ACUITE B+’ (read as ACUITE B Plus) and reaffirmed its short-term rating at ACUITE A4 (read as ACUITE A Four) on the Rs. 39.00 crore bank facilities of Danalakshmi Paper Mills Private Limited (DPMPL). The rating is now flagged as “Issuer Not-Cooperating” on account of information risk and is based on the best available information. Acuite had sent repeated reminders to the company for sharing critical information and documents for surveillance of the ratings. But despite multiple requests, the company has remained non-cooperative in providing any information. The rating downgrade is on account of information risk.

About the Company

Danalakshmi Paper Mills Private Limited (DPMPL) is a Coimbatore-based company incorporated in the year 1980, which has established an integrated waste paper based paper mill along with a coal based independent power generation plant of 5.5 Megawatt (MW) at Vilampatti, Nilakkottai Taluk, Dindigul District, Tamil Nadu. DPMPL was erstwhile founded and promoted by Mr. Ramaswamy and taken over by new management in FY2020.

Unsupported Rating

Not Applicable

Non-cooperation by the issuer/borrower

Acuité has been requesting for data, information and undertakings from the rated entity for conducting surveillance & review of the rating. However, the issuer/borrower failed to submit such information before the due date. Acuité believes that information risk is a critical component in such ratings, and noncooperation by the issuer along with unwillingness to provide information could be a sign of potential deterioration in its overall credit quality. This rating is therefore being flagged as “Issuer not cooperating”, in line with prevailing SEBI regulations and Acuité’s policies.

Limitation regarding information availability

The rating is based on information available from sources other than the issuer/borrower (in the absence of information provided by the issuer/borrower). Acuité endeavoured to gather information about the entity/industry from the public domain. Therefore, Acuité cautions lenders and investors regarding the use of such information, on which the indicative credit rating is based.

Rating Sensitivities

No information provided by the issuer / available for Acuite to comment upon

Liquidity Position

No information provided by the issuer / available for Acuite to comment upon

Outlook

­Not Applicable

Other Factors affecting Rating

None­

Key Financials

Particulars	Unit	FY 23 (Actual)	FY 22 (Actual)
Operating Income	Rs. Cr.	50.56	47.83
PAT	Rs. Cr.	(10.29)	(16.23)
PAT Margin	(%)	(20.35)	(33.93)
Total Debt/Tangible Net Worth	Times	(5.89)	(48.53)
PBDIT/Interest	Times	(0.15)	(1.84)

Status of non-cooperation with previous CRA

Not Applicable

Any other information

None

Applicable Criteria

• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm • Default Recognition: https://www.acuite.in/view-rating-criteria-52.htm • Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.htm

Note on complexity levels of the rated instrument

­In order to inform the investors about complexity of instruments, Acuité has categorized such instruments in three levels: Simple, Complex and Highly Complex. Acuite’s categorisation of the instruments across the three categories is based on factors like variability of the returns to the investors, uncertainty in cash flow patterns, number of counterparties and general understanding of the instrument by the market. It has to be understood that complexity is different from credit risk and even an instrument categorized as 'Simple' can carry high levels of risk. For more details, please refer Rating Criteria “Complexity Level Of Financial Instruments” on www.acuite.in.

Rating History

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook 11 Jul 2023 PC/PCFC Short Term 3.00 ACUITE A4 (Downgraded from ACUITE A4+) Bills Discounting Short Term 3.00 ACUITE A4 (Downgraded from ACUITE A4+) Letter of Credit Short Term 9.00 ACUITE A4 (Downgraded from ACUITE A4+) Cash Credit Long Term 9.00 ACUITE B+ | Stable (Downgraded from ACUITE BB- | Stable) Term Loan Long Term 15.00 ACUITE B+ | Stable (Downgraded from ACUITE BB- | Stable) 25 Apr 2022 PC/PCFC Short Term 3.00 ACUITE A4+ (Reaffirmed) Bills Discounting Short Term 3.00 ACUITE A4+ (Reaffirmed) Letter of Credit Short Term 9.00 ACUITE A4+ (Reaffirmed) Cash Credit Long Term 9.00 ACUITE BB- | Stable (Reaffirmed) Term Loan Long Term 15.00 ACUITE BB- | Stable (Reaffirmed) 07 Jan 2021 Cash Credit Long Term 9.00 ACUITE BB- | Stable (Assigned) Term Loan Long Term 15.00 ACUITE BB- | Stable (Assigned) Bills Discounting Short Term 3.00 ACUITE A4+ (Assigned) Letter of Credit Short Term 9.00 ACUITE A4+ (Assigned) PC/PCFC Short Term 3.00 ACUITE A4+ (Assigned)

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Annexure - Details of instruments rated

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Complexity Level Rating Indian Bank Not avl. / Not appl. Bills Discounting Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 3.00 Simple ACUITE A4 | Reaffirmed | Issuer not co-operating* Indian Bank Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 9.00 Simple ACUITE B | Downgraded | Issuer not co-operating* ( from ACUITE B+ ) Indian Bank Not avl. / Not appl. Letter of Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 9.00 Simple ACUITE A4 | Reaffirmed | Issuer not co-operating* Indian Bank Not avl. / Not appl. PC/PCFC Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 3.00 Simple ACUITE A4 | Reaffirmed | Issuer not co-operating* Indian Bank Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 15.00 Simple ACUITE B | Downgraded | Issuer not co-operating* ( from ACUITE B+ )

* The issuer did not co-operate; based on best available information.

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Contacts

Mohit Jain Senior Vice President - Rating Operations Dheeraj Salian Associate Analyst - Rating Operations	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@acuite.in

About Acuité Ratings & Research

Acuité is a full-service Credit Rating Agency registered with the Securities & Exchange Board of India (SEBI). The company received RBI Accreditation as an External Credit Assessment Institution (ECAI) for Bank Loan Ratings under BASEL-II norms in the year 2012. Acuité has assigned ratings to various securities, debt instruments and bank facilities of entities spread across the country and across a wide cross section of industries. It has its Registered and Head Office in Kanjurmarg, Mumbai. Disclaimer: An Acuité rating does not constitute an audit of the rated entity and should not be treated as a recommendation or opinion that is intended to substitute for a financial adviser's or investor's independent assessment of whether to buy, sell or hold any security. Ratings assigned by Acuité are based on the data and information provided by the issuer and obtained from other reliable sources. Although reasonable care has been taken to ensure that the data and information is true, Acuité, in particular, makes no representation or warranty, expressed or implied with respect to the adequacy, accuracy or completeness of the information relied upon. Acuité is not responsible for any errors or omissions and especially states that it has no financial liability whatsoever for any direct, indirect or consequential loss of any kind, arising from the use of its ratings. Ratings assigned by Acuité are subject to a process of surveillance which may lead to a revision in ratings as and when the circumstances so warrant. Please visit our website (www.acuite.in) for the latest information on any instrument rated by Acuité. Please visit https://www.acuite.in/faqs.htm to refer FAQs on Credit Rating.