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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 70.00 | ACUITE BB- | Stable | Assigned | - |
| Bank Loan Ratings | 2.87 | - | ACUITE A4 | Assigned |
| Total Outstanding | 72.87 | - | - |
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Rating Rationale |
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Acuite has assigned the long-term rating of 'ACUITE BB-' (read as ACUITE double B minus) and the short-term rating of 'ACUITE A4' (read as ACUITE A four) on the Rs. 72.87 crore bank facilities of Indbest Healthcare Private Limited (IHPL). The outlook is ‘Stable’.
Rationale for Rating Assigned The rating assigned reflects company’s exposure to moderate capex implementation risk and expected leveraged capital structure in the near to medium term on account of debt funded capex. Furthermore, the operations remain exposed to offtake risk. These Weaknesses are partially offset by low funding risk due to financial closure with the Bank. |
| About the Company |
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Indbest Healthcare Private Limited (IHPL) incorporated on 10th February 2022 is promoted by Mr. Prem Patel, Ms. Noopur Patel, Mr. Raj Oza and Mr. Vatsal Oza. The company has been incorporated to carry out manufacturing of Large Volume Parenteral (LVP). The manufacturing unit of LVP will be set up at Survey No. 888, near Kamlamrut Industrial Park, Indrad, Dist. Mehsna, Gujarat, India.The installed capacity of proposed plant for production of Large Volume Parenteral (LVP) and WFI (Water for Injections) is 100 ML Bottles PP (1,05,840 Bottles per day), 500 ML Bottles PP (1,68,000 Bottles per day), 1000 ML Bottles PP (25,452 Bottles per day) and 3000 ML Bottles PP (5,000 Bottles per day).
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| Unsupported Rating |
| Not Applicable |
| Analytical Approach |
| Acuité has considered the standalone business and financial risk profiles of Indbest Healthcare Private Limited (IHPL) to arrive at the rating. |
| Key Rating Drivers |
| Strengths |
| Extensive experience of promoters
The promoters have prior experience in managing companies in similar line of business. The promoter’s family group have successfully executed a Small Volume Parental (SVP) plant in the vicinity named Kamlaamrut Pharmaceutical LLP. The promoters derive their fair share of pharmaceutical experience from above mentioned concern. Further, the promoters intend to hire an experienced team of professionals to execute the project as well as day to day operations of the plant. Furthermore, the manufacturing facility is state of art and can produce export quality products as per international standards. Acuite believes this would help them to scale up the revenue in coming years by having better understanding of the markets and through the various relationship established over years in industry. |
| Weaknesses |
| Moderate Implementation Risk along with High Offtake Risk
The construction is on the advance stage and is completed ~50%, currently erection and installation of plant and machinery is under process. The total cost of project is Rs. 99.19 Cr. which is to be funded partly through Rs. 60.00 Cr. term loan from State Bank of India, Rs. 25.00 Cr. from equity infusion from promoters and Rs. 14.19 Cr. from unsecured loans from directors/ promoters. In this project, up to 30th June 2024, the firm has incurred Rs. 48.82 Cr. which has been funded by term loan of Rs. 27.79 Cr. and promoter’s funding of Rs. 27.79 Cr. Also, the unpaid suppliers stand at Rs. 0.44 Cr. The date of commencement of commercial operation is November 2024 and revenue visibility is yet to be established. Further, the timely completion of construction without any cost and time overrun and commencement of operations as per scheduled date remains a key rating sensitivity. Regulatory and Competition Risk The Pharmaceutical industry operates under a comprehensive framework of regulations spanning pricing, quality control, safety, and health standards, alongside various certifications, and control protocols. Pharmaceutical companies within this sector are obligated to secure necessary approvals and certifications, with ongoing requirements for upgrades to ensure smooth operational continuity. Changes or amendments introduced by regulatory bodies have the potential to significantly impact businesses operating within the industry. Additionally, the company faces intense competition from several players in the city from small players as well as large players. |
| Rating Sensitivities |
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Timely completion of the project without any cost or time overrun
Timely stabilisation of operations. |
| Liquidity Position |
| Stretched |
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The Date of Commencement of Commercial Operations is expected to be November 2024. The firm’s liquidity position is expected to remain stretched in initial stages of operation. However, if the operations stabilise the debt servicing should be met out timely. The promoters are expected to infuse equity and unsecured loans to support the business from time to time. However, timely implementation of the project and generation of expected cash accrual will be key rating sensitivity factors.
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| Outlook: Stable |
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Acuité believes that IHPL will maintain a 'Stable' outlook based on the positive outlook on the health care industry. The outlook may be revised to 'Positive' in case of timely completion of construction and commencement of operations without time and cost overrun. Conversely, the outlook may be revised to 'Negative' in case of delay in project completion, significant cost over-run resulting in deterioration in the liquidity and leverage position on a prolonged basis
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| Other Factors affecting Rating |
| None |
| Particulars | Unit | FY 24 (Provisional) | FY 23 (Actual) |
| Operating Income | Rs. Cr. | 0.00 | 0.00 |
| PAT | Rs. Cr. | (0.04) | (0.04) |
| PAT Margin | (%) | 0.00 | 0.00 |
| Total Debt/Tangible Net Worth | Times | 2.25 | 84.46 |
| PBDIT/Interest | Times | (3.70) | (1314.52) |
| Status of non-cooperation with previous CRA (if applicable) |
| None. |
| Any other information |
| None. |
| Applicable Criteria |
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• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm • Manufacturing Entities: 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 |
| 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 : |
| Not Applicable |
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