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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 15.00 | ACUITE D | Downgraded | - |
| Total Outstanding Quantum (Rs. Cr) | 15.00 | - | - |
| Rating Rationale |
| Acuite has downgraded its long-term rating to ‘ACUITE D' (read as ACUITE D) from Acuite BB- (read as Acuite double B minus) on the Rs.15.00 Cr bank facilities of Global Tools (GT). The downgrade is on account of delays observed in debt servicing in the term-loan account statememts. |
| About the Company |
| M/s Global Tools is a partnership concern established in 2007. It is owned and managed by Mr. Birangal Mahadev Parmeshwar and Mr. Baig Sultan Abdul. The Company is based at Bhosari, Pune, and Maharashtra. Global Tools is engaged in manufacturing and regrinding of all types of Cutting tools, H.S.S and Carbides Tools which is used in specialize Vertical Milling Machines (VMC), CNC and Metal Cutting Machines. |
| Analytical Approach |
| Acuité has taken a standalone view of the business and financial risk profile of GT to arrive at the rating. |
Key Rating Drivers
| Strengths |
| Experienced management and long operational track record
GT is a partnership concern established in 2007. It is owned and managed by Mr. Birangal Mahadev Parmeshwar and Mr. Baig Sultan Abdul. The partners of the firm has an extensive experience of more than 15 years in this line of business. The firm is based at Bhosari, Pune. Global Tools is engaged in manufacturing and regrinding of all types of Cutting tools, H.S.S |
| Weaknesses |
| Highly fragmented and competitive industry
The industry is marked by presence of large number of organized and unorganized players. The industry is intensely competitive and fragmented because of low entry barriers and moderate capital requirements. The high competitive intensity limits the pricing flexibility and exerts pressures on the margins of all participants. However, the established brand presence, reputed customer base and experienced management mitigates the risk to some extent. |
| Rating Sensitivities |
| Timely servicing of debt obligation. |
| Material covenants |
| None |
| Liquidity Position |
| Stretched |
| Liquidity position is stretched as company generated insufficient cash accruals to its maturing debt-repayment obligations. The working capital limits are fully utilised for last 6 months ending July 2023. Also, company has defaulted on timely servicing of debt obligations. |
| Outlook: Not Applicable |
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| Other Factors affecting Rating |
| None |
| Particulars | Unit | FY 22 (Actual) | FY 21 (Actual) |
| Operating Income | Rs. Cr. | 19.46 | 14.25 |
| PAT | Rs. Cr. | 0.70 | 0.40 |
| PAT Margin | (%) | 3.60 | 2.82 |
| Total Debt/Tangible Net Worth | Times | 2.54 | 2.51 |
| PBDIT/Interest | Times | 1.99 | 2.03 |
| Status of non-cooperation with previous CRA (if applicable) |
| Not Applicable |
| Any other information |
| Acuite is yet to receive the latest No Default Statement from the rated entity despite repeated requests and followups. |
| Applicable Criteria |
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• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Entities In Manufacturing Sector:- https://www.acuite.in/view-rating-criteria-59.htm • Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm |
| Note on complexity levels of the rated instrument |
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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. |
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