Product Quantum (Rs. Cr) Long Term Rating Short Term Rating
Bank Loan Ratings 5.50 ACUITE B | Reaffirmed | Issuer not co-operating* -
Bank Loan Ratings 4.00 - ACUITE A4 | Reaffirmed | Issuer not co-operating*
Total Outstanding Quantum (Rs. Cr) 9.50 - -
 
Rating Rationale
­Acuité has reaffirmed the long-term rating of ‘ACUITE B’ (read as ACUITE B) and the short term rating of ‘ACUITE A4’ (read as ACUITE A four) on the Rs. 9.50 crore bank facilities of Bala Industries (BI). The rating continues to be flagged as “Issuer Not-Cooperating” and is based on best available information.

About the Company
­Established in 1997 by Mr. S A Arutchelvan, Bala Industries (BI) is a Chennai (Tamil Nadu) based partnership firm engaged in the manufacture of power and distribution transformers. The entity mainly supplies transformers to Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO). The entity also supplies windmill transformers to RRB Energy Limited and Para Enterprises. The entity is promoted by Mr. S A Arutchelvan and Mrs. A Anuradha. 
 
About the Group
­Bala Industries (BI) has an associate concern namely Paramount Industries (PI), which is also engaged in manufacture of power and distribution transformers. Established in 1997, Chennai (Tamil Nadu) based Paramount Industries is engaged in the manufacture of power and distribution transformers. The group mainly supplies transformers to Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO). The group is promoted by Mr. S A Arutchelvan.
 
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 non-cooperation 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 endeavored 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 Sensitivity
­"No information provided by the issuer / available for Acuite to comment upon."
 
Material Covenants
­None.
 
Liquidity Position
­"No information provided by the issuer / available for Acuite to comment upon."
 
Outlook
­Not Applicable.
 
Other Factors affecting Rating
­Not Applicable.
 

Particulars Unit FY 17 (Actual) FY 16 (Actual)
Operating Income Rs. Cr. 14.53 16.03
PAT Rs. Cr. 0.45 0.40
PAT Margin (%) 3.06 2.49
Total Debt/Tangible Net Worth Times 1.61 10.56
PBDIT/Interest Times 2.71 2.38
Status of non-cooperation with previous CRA
­None.
 
Any other information
­Acuité is yet to receive the latest No Default Statement (NDS) from the rated entity, despite repeated requests and follow-ups.
 
Applicable Criteria
• Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.htm
• Default Recognition: https://www.acuite.in/view-rating-criteria-52.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.
 
 

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook
11 Jan 2022 Cash Credit Long Term 2.50 ACUITE B ( Issuer not co-operating*)
Bank Guarantee Short Term 4.00 ACUITE A4 ( Issuer not co-operating*)
Bills Discounting Long Term 3.00 ACUITE B ( Issuer not co-operating*)
15 Oct 2020 Bank Guarantee Short Term 4.00 ACUITE A4 (Issuer not co-operating*)
Bills Discounting Long Term 3.00 ACUITE B (Issuer not co-operating*)
Cash Credit Long Term 2.50 ACUITE B (Issuer not co-operating*)
­

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Complexity Level Rating
Canara Bank Not Applicable Bank Guarantee/Letter of Guarantee Not Applicable Not Applicable Not Applicable 4.00 Simple ACUITE A4 | Reaffirmed | Issuer not co-operating*
Canara Bank Not Applicable Bills Discounting Not Applicable Not Applicable Not Applicable 3.00 Simple ACUITE B | Reaffirmed | Issuer not co-operating*
Canara Bank Not Applicable Cash Credit Not Applicable Not Applicable Not Applicable 2.50 Simple ACUITE B | Reaffirmed | Issuer not co-operating*

Contacts
Analytical Rating Desk
About Acuité Ratings & Research
Acuité Ratings & Research Limitedwww.acuite.in