Press Release January 07, 2025 REGAL JEWELLERS LLP Rating Assigned

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	82.00	ACUITE BBB+ | Stable | Assigned	-
Total Outstanding	82.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

­­Acuité has assigned long-term rating of ‘ACUITE BBB+’ (read as ACUITE triple B plus) on the Rs.82.00 crore bank facilities of Regal Jewellers LLP. The outlook is 'Stable'. Rationale for rating: The rating takes into account long track record of operations, healthy revenues and operating profitability margins, moderate financial risk profile and adequate liquidity. However, these strengths are partly offset by the moderate working capital cycle, volatility in the prices of gold, intense competition and exposure to regulatory risk.

About the Company

­­Thrissur based Regal Jewellers LLP(RJLLP) was incorporated in 2020. Directors of the company are Ms. Pallavi Govind Namdev, Mr. Sivadasan Thamarassery Kuttappan, Mr. Vibin Das Thamarassery Sivadasan and Ms. Kshemavathy. The firm is engaged in the business of  retail trading in precious metals including ornaments made from gold, silver etc. and other precious, precious/ semi- precious stone jewellery.

About the Group

­­Optimum Jewellers LLP Malappuram based Optimum Jewellers LLP(OJLLP) was incorporated in 2015. Directors of the company are Ms. Pallavi Govind Namdev, Mr. Sivadasan Thamarassery Kuttappan, Mr. Vibin Das Thamarassery Sivadasan and Ms. Kshemavathy. The firm is engaged in the business of retail trading in precious metals including ornaments made from gold, silver etc. and other precious, precious/ semi- precious stone jewellery. Regal Jewellers India Private Limited (Erstwhile Optimum Gold and Diamonds Private Limited) Thrissur based Regal Jewellers India Private Limited (Erstwhile Optimum Gold and Diamonds Private Limited) (RJIPL)was incorporated in 2017. Directors of the company are Ms. Pallavi Govind Namdev, Mr. Sivadasan Thamarassery Kuttappan, Mr. Vibin Das Thamarassery Sivadasan and Ms. Kshemavathy. Company is engaged in the business of retail trading in precious metals including ornaments made from gold, silver etc. and other precious, precious/ semi- precious stone jewellery.

Unsupported Rating

­Not Applicable

Analytical Approach

Extent of Consolidation

•Full Consolidation

Rationale for Consolidation or Parent / Group / Govt. Support

­­Acuité has taken a consolidated view of Regal Jewellers LLP, Optimum Jewellers LLP and Regal Jewellers India Private Limited as all the 3 entities are in the same line of business, share common management and have strong operational and financial linkages.

Key Rating Drivers

Strengths

Experienced management  The promoters of the group namely Mr. Sivadasan Thamarassery Kuttappan, Mr. Vibin Das Thamarassery Sivadasan and others who have an experience of more than a decade in the jewellery business. Mr. Sivadasan Thamarassery Kuttappan has been managing the business operations and are ably supported by the second line of management. Out of the 9 showrooms, 2 showrooms are owned and 7 showrooms are on lease basis. The group has showrooms in Kerala and has recently opened a new showroom in Bengaluru, Karnataka in December 2024. Acuite believes that their experience will leverage the business and will continue to benefit the company going forward. ­Healthy ­Revenues and operating profitability The revenues of the group have increased to Rs. 1203.21 Cr. as on March 31, 2024, as compared to Rs. 499. 42 Cr. as on March 31, 2023, on account of higher quantity sold and high realisations, also adding new products like uncut diamonds, precious stones, and added 2 new showrooms in the last 2 years ended FY 24 and has further added another showroom in Bengaluru in December 2024 which is expected to augment revenues. The operating profitability margins have increased to 4.45 percent as compared to 3.05 percent as on March 31, 2023. Moderate financial risk profile The financial risk profile of the group is moderate marked by comfortable net worth, moderate gearing and comfortable debt protection metrics. The tangible net worth stood at Rs. 68.44 Cr. as on March 31, 2024 as compared to Rs. 37.04 Cr. as on March 31,2023 due to accretion of reserves. Gearing stood at 1.43 times as on March 31, 2024 compared to 1.59 times in FY2023. The interest coverage ratio stood at 4.45 times as on March 31, 2024 compared to 2.64 times as on March 31, 2023. The debt service coverage ratio stood stable at 2.88 times as on March 31, 2024 as compared to 1.99 times as on March 31, 2023. However, the TOL/TNW stood high at 3.90 times as on March 31, 2024 as compared to 3.40 times as on March 31, 2023 due to high current liabilities. Acuite believes that the group’s financial risk profile will remain moderate over the medium term backed by moderate capital structure and debt protection metrices.

Weaknesses

­Moderate working capital cycle The operations of the group have moderate working capital requirement as reflected from Gross Current Assets of 82 days as on March 31, 2024 as compared to 97 days as on March 31, 2023.  The inventory days stood at 83 days as on March 31, 2024 as compared to 94 days as on March 31, 2023. The other current assets stand at Rs. 3.40 Cr. as on March 31, 2024 as compared to Rs. 3.01 Cr. as on March 31, 2023. The creditor days stood at 18 days as on March 31, 2024 compared to 25 days as on March 31,2023. Acuite believes that working capital requirements are expected to remain moderate over the near to medium term. ­Intense competition and exposure to regulatory risk The country’s gems and jewellery sector is highly fragmented.The retail segment has high dominance of unorganized players, who enjoy around 70 per cent market share. While in case of the manufacturing segment, the dominance of unorganized players is even higher at around 90 per cent. Moreover, increased regulatory intervention such as gold hallmarking, requirement of PAN, etc. impact the demand-supply trend in the sector. Furthermore, the fluctuation in gold prices also impact the demand for gold. However, the group’s presence and strong brand value have enabled it to establish itself as a major player in Kerala over the years.

Rating Sensitivities

­Movement in revenues and operating profitability Working Capital Cycle Improved capital structure and TOL/TNW

Liquidity Position

Adequate

­­The liquidity is adequate marked by steady net cash accruals of Rs. 28.95 Cr. as on March 31, 2024 as against long term debt repayment of Rs. 2.14 Cr. over the same period. The cash and bank balances stood at Rs. 7.51 Cr. as on March 31,2024 as compared to Rs. 2.41 Cr. as on March 31, 2023. The current ratio stood at 1.22 times as on March 31, 2024 as compared to 1.26 times as on March 31, 2023.The fund based utilization ended six months, October 2024 is 85.70%. Acuité believes that going forward the liquidity position of the group will remain adequate in the near to medium term.

Outlook: Stable

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Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	1203.21	499.42
PAT	Rs. Cr.	24.88	4.96
PAT Margin	(%)	2.07	0.99
Total Debt/Tangible Net Worth	Times	1.43	1.59
PBDIT/Interest	Times	4.45	2.64

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

­None

Any Other Information

­None

Applicable Criteria

• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm • Consolidation Of Companies: https://www.acuite.in/view-rating-criteria-60.htm • Default Recognition: https://www.acuite.in/view-rating-criteria-52.htm • Trading Entities: https://www.acuite.in/view-rating-criteria-61.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:Not Applicable

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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 HDFC Bank Ltd Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 18.00 Simple ACUITE BBB+ | Stable | Assigned HDFC Bank Ltd Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 9.00 Simple ACUITE BBB+ | Stable | Assigned State Bank of India Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 19.50 Simple ACUITE BBB+ | Stable | Assigned State Bank of India Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 0.25 Simple ACUITE BBB+ | Stable | Assigned HDFC Bank Ltd Not avl. / Not appl. Covid Emergency Line. 07 Jun 2022 Not avl. / Not appl. 07 Jun 2027 1.15 Simple ACUITE BBB+ | Stable | Assigned Not Applicable Not avl. / Not appl. Proposed Long Term Bank Facility Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 25.51 Simple ACUITE BBB+ | Stable | Assigned HDFC Bank Ltd Not avl. / Not appl. Term Loan 07 Dec 2022 Not avl. / Not appl. 07 Dec 2027 1.36 Simple ACUITE BBB+ | Stable | Assigned ICICI Bank Ltd Not avl. / Not appl. Term Loan 05 Sep 2023 Not avl. / Not appl. 05 Aug 2038 6.27 Simple ACUITE BBB+ | Stable | Assigned HDFC Bank Ltd Not avl. / Not appl. Working Capital Demand Loan (WCDL) Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 0.96 Simple ACUITE BBB+ | Stable | Assigned

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

Sr. No.  Company name 1 Regal Jewellers LLP 2 Regal Jewellers India Private Limited 3 Optimum Jewellers LLP

Contacts

Mohit Jain Senior Vice President - Rating Operations Vedika Lahoti 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.