Press Release ESSPAL INTERNATIONAL PRIVATE LIMITED July 10, 2023 Rating Downgraded and Issuer not co-operating

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	51.00	ACUITE BB+ | Downgraded | Issuer not co-operating*	-
Bank Loan Ratings	2.00	-	ACUITE A4+ | Downgraded | Issuer not co-operating*
Total Outstanding Quantum (Rs. Cr)	53.00	-	-

Rating Rationale

­Acuite has downgraded the long term rating to ‘ACUITE BB+’ (read as ACUITE Double B plus) from 'ACUITE BBB-' (read as ACUITE Triple B Minus) and short term rating to ‘ACUITE A4+’ (read as ACUITE A Four Plus) from 'ACUITE A3' (read as ACUITE A three) on the Rs. 53.00 Cr bank facilities of ESSPAL INTERNATIONAL PRIVATE LIMITED. The rating is now an indicative rating, and based on the best available information.

About the Company

­Based in Bhilwara, Rajasthan, Esspal International Private Limited (EIPL) was established in 2009. The company is engaged in manufacturing of grey fabric and processing of yarn. The company is led by directors, Mr. Manish Lath and Mrs. Rashmi Devi Lath, having experience of over two decades in the textile industry and Mr. Hriday Lath, son of Mr. Manish Lath, who has experience of 8 years in the textile industry. Company has a manufacturing facility in Bhilwara, Rajasthan with a licensed capacity of 180 lakhs meter of grey fabric per annum.

Non-cooperation by the issuer/borrower

­Acuité has been requesting for key documents for the review from the rated entity. However, the issuer / borrower failed to submit such information before 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 endeavoured 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 Sensitivities

­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

­None

Key Financials

Particulars	Unit	FY 22 (Actual)	FY 21 (Actual)
Operating Income	Rs. Cr.	265.58	169.99
PAT	Rs. Cr.	1.06	1.35
PAT Margin	(%)	0.40	0.80
Total Debt/Tangible Net Worth	Times	0.76	1.05
PBDIT/Interest	Times	2.04	1.98

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

• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.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 28 Apr 2022 Cash Credit Long Term 30.00 ACUITE BBB- | Stable (Assigned) Term Loan Long Term 0.55 ACUITE BBB- | Stable (Assigned) Working Capital Demand Loan Long Term 6.45 ACUITE BBB- | Stable (Assigned) Letter of Credit Short Term 2.00 ACUITE A3 (Assigned) Working Capital Demand Loan Long Term 4.00 ACUITE BBB- | Stable (Assigned) Cash Credit Long Term 10.00 ACUITE BBB- | Stable (Reaffirmed) 15 Apr 2022 Cash Credit Long Term 10.00 ACUITE BBB- | 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 Tamilnad Mercantile Bank Limited Not Applicable Cash Credit Not Applicable Not Applicable Not Applicable 10.00 Simple ACUITE BB+ | Downgraded | Issuer not co-operating* Tamilnad Mercantile Bank Limited Not Applicable Cash Credit Not Applicable Not Applicable Not Applicable 30.00 Simple ACUITE BB+ | Downgraded | Issuer not co-operating* Tamilnad Mercantile Bank Limited Not Applicable Letter of Credit Not Applicable Not Applicable Not Applicable 2.00 Simple ACUITE A4+ | Downgraded | Issuer not co-operating* Tamilnad Mercantile Bank Limited Not Applicable Term Loan Not available Not available Not available 0.55 Simple ACUITE BB+ | Downgraded | Issuer not co-operating* Tamilnad Mercantile Bank Limited Not Applicable Working Capital Demand Loan (WCDL) Not available Not available Not available 6.45 Simple ACUITE BB+ | Downgraded | Issuer not co-operating* Tamilnad Mercantile Bank Limited Not Applicable Working Capital Demand Loan (WCDL) Not available Not available Not available 4.00 Simple ACUITE BB+ | Downgraded | Issuer not co-operating*

Contacts

Analytical	Rating Desk
Aditya Gupta Vice President-Rating Operations Tel: 022-49294041 aditya.gupta@acuite.in Satyam . Analyst-Rating Operations Tel: 022-49294065 satyam.saxena@acuite.in	Varsha Bist Senior Manager-Rating Operations Tel: 022-49294011 rating.desk@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.