Press Release November 28, 2024 UTTAR PRADESH BEEJ VIKAS NIGAM Rating Reaffirmed

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	100.00	ACUITE A- | Stable | Reaffirmed	-
Total Outstanding	100.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

­Acuite has reaffirmed its long term rating of "ACUITE A-" (read as ACUITE A minus) on the bank facilities of Rs.100 Crore of Uttar Pradesh Beej Vikas Nigam (UPBVN). The outlook is 'Stable'. Rationale for rating The rating reaffirmation is driven by comfort from Government of Uttar Pradesh (GoUP) since more than 90% shareholding is with GoUP and it holds strategic importance to the GoUP for catering to the seed requirement of the state by supplying seeds to Agriculture department. The rating also considers the support extended by the UP state through infusion of equity in the company. Further, the rating factors in the moderate revenue base of the company which stood at Rs. 233.32 Crore in FY24 (prov.) against Rs.184.48 Crore in FY 23. The rating also favourably factors in the strong liquidity position of the company with unencumbered cash and bank balance of Rs 90.10 Cr. in FY 24 (prov.). However, these strengths are partially offset by intensive working capital management reflected by high Gross Current Asset (GCA) days of 274 days as on 31st March 2024 (prov.) on account of stretched receivables and advances to suppliers.

About the Company

­Uttar Pradesh Beej Vikas Nigam is Incorporated in 2002 and is a Government of Uttar Pradesh owned company and located at Lucknow (Uttar Pradesh). The directors of company are Mr. Satyendra Kumar Singh, Mr. Rajeshwar Singh and Mr. Jitendra Kumar Tomar. Uttar Pradesh Beej Vikas Nigam is engaged in Production of seeds, growing of crops and horticulture.

Unsupported Rating

Not Applicable

Analytical Approach

Acuité has taken the standalone view on the business and financial risk profile of Uttar Pradesh Beej Vikas Nigam (UPBVN). Further, Acuité has also factored in the support extended from the State Government of Uttar Pradesh.

Key Rating Drivers

Strengths

­Strategic Importance of UPBVN to GoUP UPBVN is a 90% owned entity of GoUP and holds a strategic importance to GoUP in terms of Agriculture requirements of the state. The company is engaged in production of seeds, growing of crops and horticulture. The company caters to the seed requirements of UP Agriculture department. The directors of the company are Mr. Satyendra Kumar Singh, Mr. Rajeshwar Singh and Mr. Jitendra Kumar Tomar who have more than two decades of experience in agriculture industry. The company sells to dealers mostly to S & F and Agri junction. The EBITDA margins of the company is growing on y-o-y basis which stood at 8.95% in FY24 (prov.) against 6.55% in FY23. Acuité believes that the UPBVN, being a strategically important to GoUP,  shall continue to benefit from operational and management support of GoUP time to time. Augmentation in business risk profile supported by stable operations The company has achieved a turnover of Rs. 233.32 Crore in FY24 (Prov.) against Rs. 184.48 Crore in FY23. The company is exhibiting increase in the revenue on account of execution of monthly orders and also driven by market demand scenario. Company gets requirement of seeds from agriculture department a year in advance. Further, EBITDA margin of the company stood at 8.95% in FY24 (prov.) against 6.55% in FY23. The company’s PAT margins also stood at 8.30% in FY24 (prov.) against 6.01% in FY23. The company has achieved the revenue of Rs. 173.78 Cr. as on Nov 2024. The company is expected to achieve better topline in next financial years with slight improvement in the margins. Healthy Financial Risk Profile The company’s financial risk profile is marked by a healthy net-worth and comfortable debt protection metrics. The company’s net-worth of Rs. 119.08 Crore as on 31st March 2024 (prov.) against Rs. 52.83 Crore as on 31st March 2023 on an account of accretion of reserves. Further, the company doesn’t have any long term debt and has cash credit facility of Rs.125 Crores. The interest coverage ratio and debt service coverage ratio of the company stood at 9.97 times and 9.97 times as on 31st March 2024 (prov.) respectively against 7.63 times and 7.63 times as on 31st March 2023 respectively. Acuite believes that company financial risk profile will remain healthy over the medium term.

Weaknesses

Intensive working capital operations The working capital cycle of the company remained high with GCA days at 274 days as on 31st March 2024 (prov.) against 559 days as on 31st March 2023. The high in GCA days is on an account of debtor days’ which stood at 190 days as on 31st March 2024 (prov.) against 197 days as on 31st March 2023. As company’s working capital cycle is different from other industries due to seasonal nature of business. The creditor days of the company stood at 175 days as on 31st march 2024 (prov.) against 228 days as on 31st March 2023. Acuite believes that the operations of the company will remain working capital intensive on an account of nature of the agriculture industry.

Rating Sensitivities

­Movement in the scale of operations and profitability. Movement in working capital operations.

Liquidity Position

Strong

The liquidity profile of the company is strong. The company has net cash accruals of Rs. 20.15 Crore in FY24 (prov.) against nil debt repayments obligation. The cash and bank balance stood at Rs. 25.05 Crore and an investment of Rs. 65.05 Crore as on 31st March 2024 (prov.) which is entirely unencumbered. The current ratio of the company stood at 1.97 times as on 31st March 2024 (prov.). The average bank limit utilization of the company stood at 65.77% in last 7 months ending October 2024. Further, the company's operations are seasonal in nature (between April to January) and accordingly, the cash credit limit is being utilized by the company during the same period only. Acuite believes that the liquidity profile of the company will remain strong in near to medium term.

Outlook: Stable

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Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 24 (Provisional)	FY 23 (Actual)
Operating Income	Rs. Cr.	233.32	184.48
PAT	Rs. Cr.	19.35	11.10
PAT Margin	(%)	8.30	6.01
Total Debt/Tangible Net Worth	Times	0.00	0.00
PBDIT/Interest	Times	9.97	7.63

Status of non-cooperation with previous CRA (if applicable)

­Not Applicable

Any other information

­None

Applicable Criteria

• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.htm • Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.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 31 Aug 2023 Cash Credit Long Term 100.00 ACUITE A- | Stable (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 UCO Bank Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 100.00 Simple ACUITE A- | Stable | Reaffirmed

*Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support)

Sr.No. Company Name 1 ­Government of Uttar Pradesh 2 Uttar Pradesh Beej Vikas Nigam

Contacts

Mohit Jain Senior Vice President - Rating Operations Siddharth Garg 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. Note: None of the Directors on the Board of Acuité Ratings & Research Limited are members of any rating committee and therefore do not participate in discussions regarding the rating of any entity.