Press Release February 20, 2025 BLUE PHOSPHATE LIMITED Rating Reaffirmed

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	64.36	ACUITE A- | Stable | Reaffirmed	-
Bank Loan Ratings	35.64	-	ACUITE A2+ | Reaffirmed
Total Outstanding	100.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

­Acuité has reaffirmed its long term rating to 'ACUITE A-' (read as ACUITE A minus)  and the short term rating to 'ACUITE A2+' (read as ACUITE A two plus) on the Rs. 100.00 crore bank facilities of Blue Phosphate Limited (BPL). The outlook is ‘Stable’. Rationale for rating  The rating considers significant increase in scale of operations of Blue Deebaj group with expected continued growth in FY25, healthy financial risk profile and adequate liquidity. The rating also considers the established position of the group in the fertiliser industry along with extensive experience of the promoters of over five decades.However, the rating is constrained on account of working capital intensive operations and susceptibility of operating performance to volatility in raw material prices and subsidy rates.

About the Company

­Incorporated in 2009 Blue Phosphate Limited (BPL) is a Roha, Maharashtra based company engaged in manufacturing of powdered single super phosphate (SSP) and granular single super phosphate (GSSP). The company has its manufacturing facility in Udaipur, Rajasthan. Currently Mr. Zafar Ullah Khan, Mr. Pradeep Ramjivan Goyal, Mr. Mihir Mukesh Bhatia and Mr. Sudeep Saxena are directors of the company.

About the Group

­Transworld Furtichem Limited (TFL) was incorporated in 2004 as a Private Limited Company. On 20th August 2024, the company was re-constituted as a Public Limited Company. TFL is engaged in manufacturing, trading & export of compound NPK and SSP Granulated Fertilizers, Sulphate of Potash (SOP), specialty Chemicals & Fertilizers with five production facilities at Roha (Maharashtra), Kandla, Jhagadia - Bharuch & Vadodara (Gujarat) and Mangalore (Karnataka). The company is recognised by the government as Three Star Export House).Currently, Mr. Pradeep Ramjivan Goyal, Mr. Dilip Kumar Gadia, Ms. Shazia Yusuf Dhanani, Mr. Sudeep Saxena, Mr. Nitin Ghanshyam Hotchandan and Mr. Venkateshkumar Krishnamurthy Tirupatipanyam are directors of the company. Blue Deebaj FZCO was established in the year 2008 as a Free Zone Company with Limited Liability under the Jebel Ali Free Zone Authority. The Company deals in 'Nitrogen Phosphorus Potash' (NPK) and other fertilizer products to customers in the African region, GCC, South East Asia and other Asian countries. The Company has manufacturing and procurement offices in India, Sri Lanka, UAE, Malaysia, Mozambique, Malawi and Zambia. Blue Deebaj group has its own warehousing facility along with handling and packing facilities in India (Kandla), Beira (Africa), Malaysia and Egypt.

Unsupported Rating

­Not applicable

Analytical Approach

Extent of Consolidation

•Full Consolidation

Rationale for Consolidation or Parent / Group / Govt. Support

­Acuité has consolidated the business and financial risk profiles of Blue Phosphate Limited (BPL), Transworld Furtichem Limited (TFL) and Blue Deebaj FZCO (BDFZCO). The companies, collectively referred to as the Blue Deebaj group, have significant operational synergies, Cross holding within the group, Corporate Guarantee extended by BD FZCO to TFL and the controlling stake in the group is held by the same promoters.

Key Rating Drivers

Strengths

­Experienced management along with operational and financial support within the group The Blue Deebaj group is promoted by Dhanani family, who have over five decades of experience in the field of fertilizers, chemicals, packaging and mineral based industries. Their experience and funding support would remain instrumental in aiding the business and the liquidity profile of the group over the medium term. BPL Limited is engaged in the manufacturing of (SSP) and granular SSP for which the raw material required is Rock Phosphate. TFL uses Rock Phosphate for manufacturing of SSP Granulated Fertilizers and then exports to Brazil in a strategic move thus creating the supply chain mechanism without disrupting the flow by having dependency on outside sources. It helps at the group level to have leverage in sourcing and negotiable capabilities. In addition, TFL operations are supported by Blue Deebaj FZCO owing to operational synergies and financial support by way of corporate guarantees for TFL’s loans and controlling stake in the group is held by same promoters. Acuite, believes the group will leverage and benefit from the operational and financial synergies to strengthen their operations in the near to medium term. Significant improvement in operating performance of the group The group reported an operating income of Rs 1354.49 Cr. in FY24 as against Rs 836.72 Cr. in FY23. All these three entities i.e BPL, TFL and Blue Deebaj FZCO has witnessed improvement in the revenue in FY24, the improvement in revenues is expected to continue in FY25 evident as BPL earned a revenue of Rs. 173.58 Cr. in FY24 as against Rs 167.78 Cr. in FY23. TFL earned a revenue of Rs. 578.42 Cr. in FY24 as against Rs 547.37 Cr. in FY23. Blue Deebaj FZCO earned a revenue of Rs 880.34 Cr. (AED 38.68 Cr.) in FY24 as against Rs 477.39 Cr. (AED 23.08 Cr.) in FY23. In 9MFY25, group has achieved the revenue of Rs 1353.01 Cr. and expected to report revenue of Rs 1,700.00 Cr. TFL has been undertaking regular capex from last two years for increase in product line and improvement in processes. Further, capex is also being carried out in FY25 to set up new fertilizer granulation unit in Kandla Special Economic Zone, Gujarat and purchase of land and building, Plant and Machinery at Jhagadia Gujarat for Single Super Phosphate(SSP) and granulated SSP. The ongoing capex is likely to support improving scale of operations of the group in near to medium term. Acuite believes that the scale of operations of the group will improve in near to medium terms on account of steady demand for fertilizers along with augmenting capabilities. Healthy financial risk profile The group’s healthy financial risk profile is marked by healthy networth, comfortable gearing and debt protection metrics. The tangible net worth of the group improved and stood at Rs. 731.14 Cr. as on March 31, 2024 as against Rs. 638.16 Cr. as on March 31, 2023 on account of increase in share capital. Further retention of current year profits and security premium on issuance of share capital contributed to reserves of the group led to increase in the networth. Also, Acuite has considered Rs 44.97 Cr. as quasi equity as the management has undertaken to maintain the amount in the business over the medium term and the same is subordinated to bank loans. The total debt of the group increased and stood Rs. 227.62 Cr. as on March 31, 2024 as against Rs. 202.05 Cr. on as on March 31, 2023. The total debt in FY24 consists of long-term debt (including current portion of long-term debt) of Rs. 42.33 Cr. and short term debt of Rs. 185.30 Cr. Gearing of the group stood at the same level i.e 0.31 times as on March 31,2024 as against 0.32 times as on March 31, 2023 .Total Outside Liabilities/Tangible Net Worth (TOL/TNW) stood moderate at 0.63 times as on March 31, 2024 as against 0.51 times as on March 31, 2023. The debt protection metrics of the group stood comfortable marked by interest coverage ratio of 3.57 times as on March 31, 2024 and debt service coverage ratio at 2.73 times as on March 31, 2024 as against 5.01 times and 4.05 times as on March 31, 2023 respectively mainly on account of increase in debt level. However, Net Cash Accruals/Total Debt (NCA/TD) stood at same level i.e 0.31 times as on March 31, 2024 as against 0.32 times as on March 31, 2023. Acuité believes that going forward the financial risk profile of the group will remain healthy marked by comfortable gearing and debt protection metrics over the medium term.

Weaknesses

­Susceptibility of profitability to volatility in raw material prices in a regulated nature of the fertilizer industry The fertilizer industry is strategic, but highly controlled, with fertilizer subsidy being an important component of profitability. The phosphatic-fertilizer industry was brought under the NBS (Nutrient Based Subsidy Scheme) regime from April 1, 2010. Under this scheme, the Government of India fixes the subsidy payable on nutrients for the entire fiscal (with an option to review this every six months), while retail prices are market driven. Manufacturers of phosphatic fertilizers are dependent on imports for their key raw materials such as rock phosphate and phosphoric acid. The regulated nature of the industry and susceptibility of complex fertilizer players to raw material price volatility under the NBS regime continues to be key rating sensitivity factors. Fertilizer companies are also exposed to subsidy payments from the government, which may get delayed leading to reliance on short-term working capital borrowings. The profitability margins fallen in FY24 as reflected in the EBITDA margins which stood at 8.30 percent in FY24 as against 11.35 percent in FY23. The PAT margins also reported a decline in FY24 which stood at 3.85 percent as against 5.14 percent in FY23. The dip in profitability margins was primarily on low realisation of government subsidy as rate of subsidy per metric ton was reduced and increased finance cost, however the subsidy rates are revised and improved in FY25 as compared to FY24 in BPL. Going forward, Acuité believes that sustained improvement in profitability margins would remain a key rating monitorable. Working capital intensive nature of operations The operations of the group remained working capital intensive in nature marked by high GCA days of 250 days in FY24 as against 332 days in FY23. The high GCA days are primarily on account of high inventory levels of the group due to the seasonal nature of the industry and purchase in bulk as group has to maintain inventory of ~120 days (Raw Material+Finished Goods quantity) and the same is maintained by way of doing import. The inventory levels stood at 107 days in FY24 as against 166 days in FY23. The group has receivable days of 64 days in FY24 as against 33 days in FY23. The receivable period is high as a certain percent of the price of fertilizers is received as subsidy from the government after raising the bill in BPL and majority of the billing is done in the last quarter, especially during March 24 in TFL. The creditor days of the group stood at 215 days in FY24 as against 101 days in FY23. The average bank limit utilisation by the group remained moderately utilised with fund-based facilities utilised at ~ 60 per cent and non-fund-based facilities being utilised at ~56 per cent during the last seven months ended in Oct24. Acuité believes that the working capital operations of the group will remain intensive on the back of high debtor and inventory level over the medium term. Price and Forex Risk The group continues to be exposed to forex, price and inventory markdown risks, primarily due to its presence in fertiliser trading. Given its high inventory levels, any adverse revision in NPK rates by the GoI or a decline in imported prices could result in inventory losses. However, the group have, over the years, managed these risks through prudent inventory management and forex risk is naturally hedged as group also imports raw materials. The foreign inflows include exports that accounts for ~62 percent of the revenue and outflows includes raw materials import to the extent of ~65 percent at the group level, thereby creating a natural hedge.

Rating Sensitivities

­ Consistent improvement in scale of operation while improving profitability margin Changes in financial risk profile owing to higher-than-expected debt funded capex Working capital management Significant increase or decrease in subsidy receivables from the government

Liquidity Position

Adequate

­The group’s liquidity is adequate marked by steady net cash accruals of Rs 71.37 Cr. as on March 31, 2024 as against long term debt repayment of only Rs.5.80 Cr. over the same period. The current ratio of the group dipped but stood comfortable at 2.26 times as on March 31, 2024 as against 2.89 times as on March 31, 2023 The average bank limit utilisation by the group remained moderately utilised with fund-based facilities utilised at ~60.18 per cent and non-fund based facilities being utilised at ~56.15 per cent during the last seven months ended in Oct-24. Acuité believes that the liquidity of the group is likely to remain adequate over the medium term on account of comfortable cash accruals as against long debt repayments over the medium term.

Outlook:

­Stable

Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	1354.49	836.72
PAT	Rs. Cr.	52.15	43.04
PAT Margin	(%)	3.85	5.14
Total Debt/Tangible Net Worth	Times	0.31	0.32
PBDIT/Interest	Times	3.57	5.01

Key Financials (Standalone)

Particulars Unit FY24(Actual) FY23(Actual) Operating Income Rs. Cr. 173.58 167.78 PAT Rs. Cr. 0.47 8.06 PAT Margin (%) 0.27 4.80 Total Debt/Tangible Net Worth Times 0.28 0.62 PBDIT/Interest Times 2.45 6.43 ­

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

­Not applicable

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 • Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.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

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook 07 Feb 2025 Cash Credit Long Term 15.00 ACUITE A- | Stable (Upgraded from ACUITE BBB+ | Stable) Proposed Long Term Bank Facility Long Term 29.36 ACUITE A- | Stable (Upgraded from ACUITE BBB+ | Stable) Cash Credit Long Term 10.00 ACUITE A- | Stable (Upgraded from ACUITE BBB+ | Stable) Cash Credit Long Term 10.00 ACUITE A- | Stable (Upgraded from ACUITE BBB+ | Stable) Letter of Credit Short Term 20.00 ACUITE A2+ (Upgraded from ACUITE A2) Letter of Credit Short Term 15.00 ACUITE A2+ (Upgraded from ACUITE A2) Forward Contracts Short Term 0.64 ACUITE A2+ (Upgraded from ACUITE A2) 13 Nov 2023 Letter of Credit Short Term 10.00 ACUITE A2 (Reaffirmed) Letter of Credit Short Term 10.00 ACUITE A2 (Assigned) Letter of Credit Short Term 15.00 ACUITE A2 (Assigned) Letter of Credit Short Term 5.00 ACUITE A2 (Assigned) Cash Credit Long Term 8.00 ACUITE BBB+ | Stable (Reaffirmed) Working Capital Term Loan Long Term 1.44 ACUITE BBB+ | Stable (Reaffirmed) Proposed Long Term Bank Facility Long Term 20.56 ACUITE BBB+ | Stable (Reaffirmed) Cash Credit Long Term 7.00 ACUITE BBB+ | Stable (Assigned) Covid Emergency Line. Long Term 0.64 ACUITE BBB+ | Stable (Assigned) Cash Credit Long Term 10.00 ACUITE BBB+ | Stable (Assigned) Cash Credit Long Term 5.00 ACUITE BBB+ | Stable (Assigned) Proposed Long Term Bank Facility Long Term 7.36 ACUITE BBB+ | Stable (Assigned) 06 Sep 2022 Letter of Credit Short Term 10.00 ACUITE A2 (Upgraded from ACUITE A3+) Proposed Long Term Bank Facility Long Term 20.56 ACUITE BBB+ | Stable (Upgraded from ACUITE BBB | Stable) Working Capital Term Loan Long Term 1.44 ACUITE BBB+ | Stable (Upgraded from ACUITE BBB | Stable) Cash Credit Long Term 8.00 ACUITE BBB+ | Stable (Upgraded from ACUITE BBB | Stable)

­

Annexure - Details of instruments rated

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Complexity Level Rating State Bank of India Not avl. / Not appl. Cash Credit 20 Nov 2023 Not avl. / Not appl. Not avl. / Not appl. 15.00 Simple ACUITE A- | Stable | Reaffirmed Central Bank of India Not avl. / Not appl. Cash Credit 18 Mar 2023 Not avl. / Not appl. Not avl. / Not appl. 10.00 Simple ACUITE A- | Stable | Reaffirmed IDBI Bank Ltd. Not avl. / Not appl. Cash Credit 11 Apr 2023 Not avl. / Not appl. Not avl. / Not appl. 10.00 Simple ACUITE A- | Stable | Reaffirmed State Bank of India Not avl. / Not appl. Forward Contracts 20 Nov 2023 Not avl. / Not appl. Not avl. / Not appl. 0.64 Simple ACUITE A2+ | Reaffirmed State Bank of India Not avl. / Not appl. Letter of Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 20.00 Simple ACUITE A2+ | Reaffirmed Central Bank of India Not avl. / Not appl. Letter of Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 15.00 Simple ACUITE A2+ | Reaffirmed Not Applicable Not avl. / Not appl. Proposed Long Term Bank Facility Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 29.36 Simple ACUITE A- | Stable | Reaffirmed

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

­ Sr No Name of the entity 1 Blue Phosphate Limited 2 Transworld Furtichem Limited 3 Blue Deebaj FZCO

Contacts

Mohit Jain Senior Vice President - Rating Operations Divya Bagmar 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.