Press Release

Press Release

February 18, 2025

CONFIDENCE PETROLEUM INDIA LIMITED
Rating Reaffirmed

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	198.80	ACUITE A \| Stable \| Reaffirmed	-
Bank Loan Ratings	151.20	-	ACUITE A1 \| Reaffirmed
Total Outstanding	350.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuité has reaffirmed its long-term rating of ‘ACUITE A' (read as ACUITE A) and short-term rating of ‘ACUITE A1' (read as ACUITE A one)' on the Rs. 350 crore bank facilities of Confidence Petroleum India Limited (CPIL). The outlook is ‘Stable’.

Rationale for the Rating
The rating reaffirmation continues to reflect Confidence Group’s strong business risk profile along with augmentation in revenues and profitability. The revenue of the group grew to Rs.2698.47 Cr. in FY2024 from Rs.2208.83 Cr. in FY2023 on account of packed gas segment wherein the group started bulk gas trading. Further, the EBITDA margins also improved to 13.32% in FY2024 from 10.08% in FY2023 on account of increase in operational efficiency in processes, use of technology and automation, Increased economies of scale, and streamlining of logistics and supply chain. Further, the group recorded growth in revenue in 9MFY25 to Rs. 2256.44 Cr from Rs. 2081.84 Cr in 9MFY24. However, the EBITDA margin of the group declined to 10.66% in 9MFY25 from 12.09% in 9MFY24. The rating also considers increase in net worth to Rs.1159.11 Cr. as of March 31, 2024, from Rs.788.98 Cr. as of March 31, 2023 on account of accretion of profits to reserves and allotment of preference equity. The group’s debt protection metrics remain strong albeit moderation. The rating further draws comfort from CG's foray into CNG segment and bulk LPG trading, thus further diversifying its revenue profile. Acuite further factors in the experience of the management and the group’s established track record of operations. However, the rating remains constrained on account of exposure to tender based business in a regulated industry and large funding requirements for the import of LPG. Acuite will continue to monitor the progress of the completion of the ongoing capex.

About Company

Incorporated in 1994, Confidence Petroleum India Limited is based in Mumbai, Maharashtra. The company is engaged in manufacturing of LPG cylinders and is also a supplier of Auto LPG in India with its network of bottling plants and ALDS (Auto LPG dispensing Station) across India. The company has its packed LPG cylinder division in the market, under the brand name 'Go Gas'. Further, the company is also engaged into LPG bottling under the brand name ‘Gaspoint’ catering to the industrial and commercial requirements of their own and offers job work to the companies such as Bharat Petroleum Corporation Limited (BPCL), Hindustan Petroleum Corporation Limited (HPCL), Indian Oil Corporation Limited (IOCL) and Reliance group, to name a few. At present, the company has 15 cylinder manufacturing units, 287 ALDS and 68 LPG bottling plants pan India. The company has forayed in CNG segment business, with agreements to set up CNG Mobile Refuelling Units (MRUs) in Pune and 100 CNG stations in the city of Bengaluru.

About the Group

Maharashtra based, Confidence Group is promoted by Mr. Nitin Poonamchand Khara. The group has two of its companies, viz; Confidence Petroleum (I)Limited (CPIL) & Confidence Futuristic Energetic Limited listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). Most of the business concentration comes under CPIL which is engaged in the manufacturing of LPG cylinders, ALDS (Auto LPG dispensing Station) and is a supplier of LPG in India with its network of bottling plants across India. The group has widespread network of 2000+ dealers & distributors across India spreading in over 22 states. The group has recently forayed into CNG segment business through: 1) Setting up of CNG Mobile Refuelling Units (MRUs) with Maharashtra Natural Gas Limited (MNGL). 2) Entered in agreement with GAIL Gas Limited to set up 100 CNG stations in the city of Bengaluru of which 45 stations have commenced operations. 3) Commenced operations of the CNG cylinder manufacturing plant in Umred, Nagpur and at Dahej, Gujarat.

Unsupported Rating

Not Applicable

Analytical Approach

Extent of Consolidation

•Full Consolidation

Rationale for Consolidation or Parent / Group / Govt. Support

Acuité has considered the consolidated view of business and financial risk profiles of CPIL with its subsidiaries to arrive at this rating together referred to as Confidence Group (CG). List of subsidiaries consolidated has been added below, separately in the Annexures-2.

Key Rating Drivers

Strengths

Established presence in the industry with considerable experience of promoters
CG is promoted by Mr. Nalin Khara and Mr. Elesh Khara, possess more than two decades in the LPG distribution business. The operations of the group are spread across the country with a total of 15-cylinder manufacturing units, 68 LPG bottling and blending plants and 287 ALDS stations. CG has recorded a significant increase in revenue which stood at Rs.2698.47 Cr. in FY2024, marking a 22% growth from Rs. Rs. 2208.83 Cr. in FY2023. The increase was majorly attributable to the Packed gas segment wherein the group started bulk gas selling along with ALDS segment wherein the stations increased to 287 in 9MFY25 from 260 in FY24 from 227 in FY23. Furthermore, in 9MFY2025 revenue improved to Rs. 2256.44 Cr against Rs.2081.84 Cr in 9MFY2024.Owing to its established track record of operations and management experience, the group has been able to build reputed client profile spanning both private as well as government companies in the energy and oil industry, viz. IOCL, BPCL and HPCL among others. The group also has well-established relationships with suppliers such as Steel Authority of India (SAIL)., etc. Further, the group is importing LPG from Middle East.

Acuité believes that CG will continue to leverage its healthy relationships with customers and suppliers, operational track record and management expertise to further grow its presence in the industry.

Strong financial risk profile
The financial risk profile of CG is strong marked by strong net worth, healthy leverage levels and debt protection metrics. The net worth of the group stood healthy at Rs.1159.11 Cr. as on March 31, 2024 as against Rs.788.98 Cr. The net worth levels have seen significant improvement over the last three years on account of healthy profitability and persistent infusion of funds by promoters. The working capital requirements has remained in line with the previous year with the group’s focus on the bulk gas supply segment. Gearing ratio improved and stood at 0.37 times as on March 31, 2024 against 0.51 times as on March 31, 2023. Nonetheless, the group has followed a conservative financial policy, which is reflected through comfortable gearing and total outside liabilities to tangible net worth (TOL/TNW) levels. The coverage indicators though moderated stood healthy marked by debt service coverage-ratio and interest coverage ratio at 2.83 times in FY2024 (6.05 times in FY2023) and 5.10 times in FY2024 (10.26 times in FY2023) respectively.

Acuité believes the overall financial risk profile is expected to remain strong in near to medium term on account of healthy accruals.

Weaknesses

Exposure to risk inherent in tender-based business
CG manufactures LPG cylinders and is also engaged in the bottling of LPG for PSU Oil majors. The group gets orders through tenders and operates in a highly fragmented industry, which limits its bargaining power, and may impact its profitability. However, the tenders include an escalation/ de-escalation clause on a monthly basis that restricts the risk to the extent of inventory carried by the group. 210 units across India participates in this tender out of which 15 units are owned by CG.

Presence in highly regulated industry with volatile margins
The group is exposed to regulatory risks associated with tariff rates and changes in government policies for fuel. The group faces intense competition from other gas filling companies and gas pipeline companies with increased usage of gas pipeline in urban area. In addition to this, the group has to sell the cylinders only through permitted dealers with adequate/required/licensed infrastructure due to explosive/ PESO norms. This risk is to an extent mitigated on account of established network of 2000+ dealers across the country. Further, the group is exposed to volatility of margins as the total raw material cost forms ~76- 77% plus of the total sale value. The prices of gases are decided by PSUs & being volatile in nature may affect group's ability to pass on the incremental prices to its customers. The EBITDA margins for last three years remain volatile although at healthy levels which stood at 13.32 percent in FY2024 against 10.08 percent in FY2023 & 13.03 percent in FY2022 respectively.

Rating Sensitivities

Sustainable improvement in the revenues along with improved margins emanating from the completion of the ongoing capex.
Significant deterioration in its working capital management leading to moderation in its financial risk profile

Liquidity Position

Strong

The group has strong liquidity profile marked by healthy net cash accruals to its maturing debt obligations. The group generated cash accruals of Rs. 265.57 Cr. during FY2024, while its maturing debt obligations were modest at Rs. 46.21 Cr. for the same period. Further, the group has a buffer in its working capital limits as reflected by moderately utilized limits at ~54.03 per cent during the last six months ended February 2024. The group plans to incur major capex in phased manner over the next three years, which would be funded by internal accruals and equity infusion. Furthermore, the simultaneous revenue generation from the units commissioned (as the capex would be in a phased manner) would support the cash flows of the group.

Going ahead, the liquidity position is expected to remain strong on account of healthy cash accruals generation to its maturing repayment obligations.

Outlook: Stable

Other Factors affecting Rating

None

Key Financials

Particulars	Unit	FY 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	2698.47	2208.83
PAT	Rs. Cr.	105.27	88.14
PAT Margin	(%)	3.90	3.99
Total Debt/Tangible Net Worth	Times	0.37	0.51
PBDIT/Interest	Times	5.10	10.26

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

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
20 Aug 2024	Cash Credit	Long Term	20.14	ACUITE A \| Stable (Reaffirmed)
	Cash Credit	Long Term	20.00	ACUITE A \| Stable (Reaffirmed)
	Working Capital Term Loan	Long Term	1.25	ACUITE A \| Stable (Reaffirmed)
	Proposed Long Term Bank Facility	Long Term	4.80	ACUITE A \| Stable (Reaffirmed)
	Cash Credit	Long Term	2.66	ACUITE A \| Stable (Reaffirmed)
	Covid Emergency Line.	Long Term	0.95	ACUITE A \| Stable (Reaffirmed)
	Bills Discounting	Long Term	20.00	ACUITE A \| Stable (Reaffirmed)
	Cash Credit	Long Term	40.00	ACUITE A \| Stable (Reaffirmed)
	Term Loan	Long Term	50.00	ACUITE A \| Stable (Reaffirmed)
	Cash Credit	Long Term	29.00	ACUITE A \| Stable (Reaffirmed)
	Cash Credit	Long Term	10.00	ACUITE A \| Stable (Reaffirmed)
	Bank Guarantee/Letter of Guarantee	Short Term	10.00	ACUITE A1 (Reaffirmed)
	Letter of Credit	Short Term	11.20	ACUITE A1 (Reaffirmed)
	Bank Guarantee (BLR)	Short Term	30.00	ACUITE A1 (Reaffirmed)
	Letter of Credit	Short Term	40.00	ACUITE A1 (Reaffirmed)
	Letter of Credit	Short Term	60.00	ACUITE A1 (Reaffirmed)
07 Aug 2024	Working Capital Term Loan	Long Term	1.25	ACUITE A \| Stable (Reaffirmed)
	Cash Credit	Long Term	20.00	ACUITE A \| Stable (Reaffirmed)
	Cash Credit	Long Term	20.14	ACUITE A \| Stable (Reaffirmed)
	Proposed Long Term Bank Facility	Long Term	2.00	ACUITE A \| Stable (Reaffirmed)
	Proposed Long Term Bank Facility	Long Term	2.80	ACUITE A \| Stable (Assigned)
	Cash Credit	Long Term	2.66	ACUITE A \| Stable (Reaffirmed)
	Covid Emergency Line.	Long Term	0.95	ACUITE A \| Stable (Reaffirmed)
	Bills Discounting	Long Term	20.00	ACUITE A \| Stable (Reaffirmed)
	Cash Credit	Long Term	20.00	ACUITE A \| Stable (Reaffirmed)
	Cash Credit	Long Term	20.00	ACUITE A \| Stable (Assigned)
	Term Loan	Long Term	50.00	ACUITE A \| Stable (Reaffirmed)
	Cash Credit	Long Term	4.00	ACUITE A \| Stable (Reaffirmed)
	Cash Credit	Long Term	25.00	ACUITE A \| Stable (Assigned)
	Cash Credit	Long Term	10.00	ACUITE A \| Stable (Assigned)
	Bank Guarantee/Letter of Guarantee	Short Term	10.00	ACUITE A1 (Reaffirmed)
	Letter of Credit	Short Term	11.20	ACUITE A1 (Reaffirmed)
	Bank Guarantee (BLR)	Short Term	20.00	ACUITE A1 (Reaffirmed)
	Bank Guarantee (BLR)	Short Term	10.00	ACUITE A1 (Assigned)
	Letter of Credit	Short Term	30.00	ACUITE A1 (Reaffirmed)
	Letter of Credit	Short Term	10.00	ACUITE A1 (Assigned)
	Letter of Credit	Short Term	60.00	ACUITE A1 (Assigned)
28 Mar 2024	Cash Credit	Long Term	20.00	ACUITE A \| Stable (Upgraded (Positive to Stable) from ACUITE A- \| Positive)
	Working Capital Term Loan	Long Term	1.25	ACUITE A \| Stable (Upgraded (Positive to Stable) from ACUITE A- \| Positive)
	Cash Credit	Long Term	20.14	ACUITE A \| Stable (Upgraded (Positive to Stable) from ACUITE A- \| Positive)
	Proposed Long Term Bank Facility	Long Term	2.00	ACUITE A \| Stable (Upgraded (Positive to Stable) from ACUITE A- \| Positive)
	Cash Credit	Long Term	2.66	ACUITE A \| Stable (Upgraded (Positive to Stable) from ACUITE A- \| Positive)
	Covid Emergency Line.	Long Term	0.95	ACUITE A \| Stable (Upgraded (Positive to Stable) from ACUITE A- \| Positive)
	Bills Discounting	Long Term	20.00	ACUITE A \| Stable (Upgraded (Positive to Stable) from ACUITE A- \| Positive)
	Cash Credit	Long Term	20.00	ACUITE A \| Stable (Upgraded (Positive to Stable) from ACUITE A- \| Positive)
	Term Loan	Long Term	50.00	ACUITE A \| Stable (Upgraded (Positive to Stable) from ACUITE A- \| Positive)
	Cash Credit	Long Term	4.00	ACUITE A \| Stable (Upgraded (Positive to Stable) from ACUITE A- \| Positive)
	Bank Guarantee/Letter of Guarantee	Short Term	10.00	ACUITE A1 (Upgraded from ACUITE A2+)
	Letter of Credit	Short Term	11.20	ACUITE A1 (Upgraded from ACUITE A2+)
	Bank Guarantee (BLR)	Short Term	20.00	ACUITE A1 (Upgraded from ACUITE A2+)
	Letter of Credit	Short Term	30.00	ACUITE A1 (Upgraded from ACUITE A2+)
17 Jan 2023	Cash Credit	Long Term	20.14	ACUITE A- \| Positive (Reaffirmed)
	Cash Credit	Long Term	20.00	ACUITE A- \| Positive (Reaffirmed)
	Working Capital Term Loan	Long Term	1.25	ACUITE A- \| Positive (Reaffirmed)
	Proposed Long Term Bank Facility	Long Term	2.00	ACUITE A- \| Positive (Reaffirmed)
	Cash Credit	Long Term	2.66	ACUITE A- \| Positive (Assigned)
	Covid Emergency Line.	Long Term	0.95	ACUITE A- \| Positive (Assigned)
	Bills Discounting	Long Term	20.00	ACUITE A- \| Positive (Reaffirmed)
	Cash Credit	Long Term	20.00	ACUITE A- \| Positive (Assigned)
	Term Loan	Long Term	50.00	ACUITE A- \| Positive (Reaffirmed)
	Cash Credit	Long Term	4.00	ACUITE A- \| Positive (Reaffirmed)
	Bank Guarantee/Letter of Guarantee	Short Term	10.00	ACUITE A2+ (Reaffirmed)
	Letter of Credit	Short Term	11.20	ACUITE A2+ (Reaffirmed)
	Bank Guarantee (BLR)	Short Term	20.00	ACUITE A2+ (Assigned)
	Letter of Credit	Short Term	30.00	ACUITE A2+ (Assigned)

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.	Bank Guarantee (BLR)	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	30.00	Simple	ACUITE A1 \| Reaffirmed
ICICI Bank Ltd	Not avl. / Not appl.	Bank Guarantee/Letter of Guarantee	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	10.00	Simple	ACUITE A1 \| Reaffirmed
Axis Bank	Not avl. / Not appl.	Bills Discounting	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	20.00	Simple	ACUITE A \| Stable \| Reaffirmed
State Bank of India	Not avl. / Not appl.	Cash Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	40.00	Simple	ACUITE A \| Stable \| Reaffirmed
Central Bank of India	Not avl. / Not appl.	Cash Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	2.66	Simple	ACUITE A \| Stable \| Reaffirmed
Central Bank of India	Not avl. / Not appl.	Cash Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	20.14	Simple	ACUITE A \| Stable \| Reaffirmed
ICICI Bank Ltd	Not avl. / Not appl.	Cash Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	20.00	Simple	ACUITE A \| Stable \| Reaffirmed
Axis Bank	Not avl. / Not appl.	Cash Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	29.00	Simple	ACUITE A \| Stable \| Reaffirmed
HDFC Bank Ltd	Not avl. / Not appl.	Cash Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	10.00	Simple	ACUITE A \| Stable \| Reaffirmed
Central Bank of India	Not avl. / Not appl.	Covid Emergency Line.	01 Aug 2022	Not avl. / Not appl.	31 Oct 2026	0.95	Simple	ACUITE A \| Stable \| Reaffirmed
ICICI Bank Ltd	Not avl. / Not appl.	Letter of Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	11.20	Simple	ACUITE A1 \| Reaffirmed
HDFC Bank Ltd	Not avl. / Not appl.	Letter of Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	60.00	Simple	ACUITE A1 \| Reaffirmed
State Bank of India	Not avl. / Not appl.	Letter of Credit	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	40.00	Simple	ACUITE A1 \| Reaffirmed
Not Applicable	Not avl. / Not appl.	Proposed Long Term Bank Facility	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	4.80	Simple	ACUITE A \| Stable \| Reaffirmed
Axis Bank	Not avl. / Not appl.	Term Loan	09 Sep 2022	Not avl. / Not appl.	30 Sep 2025	50.00	Simple	ACUITE A \| Stable \| Reaffirmed
Central Bank of India	Not avl. / Not appl.	Working Capital Term Loan	01 Aug 2022	Not avl. / Not appl.	30 Jun 2024	1.25	Simple	ACUITE A \| Stable \| Reaffirmed

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

Sr. No.	Company Name
1	Confidence Petroleum India Limited
2	Confidence Go Gas Limited
3	Unity Cylinders Private Limited
4	Confidence Technologies Private Limited
5	Agwan Coach Private Limited
6	Keppy Infrastructure Developers Private Limited
7	Hemkunt Petroleum Limited
8	Nine Infra Projects Private Limited
9	Chhattisgarh Gaspoint Bottling Private Limited
10	Papusha Gaspoint Private Limited
11	Blueflame Petroleum Private Limited
12	Confidence Futuristic Energetech Limited
13	Taraa LPG Bottling Private Limited
14	PT Surya Go Gas Indonesia
15	Sneha Petroleum (acquired in FY2019-20)
16	North East Cylinders (acquired in FY2019-20)
17	Blue flame Industries Limited (acquired in FY2019-20)
18	SV Engineering Private Limited (acquired in FY2019-20)
19	Uma Gaspoint Bottling Private Limited
20	Punjab Petroleum Private Limited
21	Confidence Enterprises Private Limited( Confidence Futuristic)
22	Sarju Impex Limited (Confidence Futuristic) (Acquired in FY2021-22)

Contacts

Mohit Jain
Senior Vice President - Rating Operations

Sanidhya Jain
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.

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