Press Release

Press Release

February 12, 2025

INDO NUCLEAR ENERGY PRIVATE LIMITED
Rating Assigned and Upgraded

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	7.50	ACUITE BB- \| Stable \| Assigned	-
Bank Loan Ratings	85.00	ACUITE BB- \| Stable \| Upgraded	-
Bank Loan Ratings	1.50	-	ACUITE A4+ \| Assigned
Total Outstanding	94.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuité has upgraded the long-term rating to ‘ACUITE BB-’ (read as ACUITE double B minus) from ‘ACUITE B+’ (read as ACUITE B Plus) on the Rs.85 Cr. bank facilities of Indo Nuclear Energy Private Limited (INEPL). The outlook is ‘Stable’.
Acuité has assigned the long-term rating of ‘ACUITE BB-’ (read as ACUITE double B minus) on the Rs.7.50 Cr. bank facilities of Indo Nuclear Energy Private Limited (INEPL). The outlook is ‘Stable’.
Acuité has assigned the short-term rating of ‘ACUITE A4+’ (read as ACUITE A four plus) on the Rs.1.50 Cr. bank facilities of Indo Nuclear Energy Private Limited (INEPL).

Rationale for upgrade
The upgrade is driven by stabilisation of operations in the Company and healthy order book from Maharatna companies. The Company has attained a revenue of approximately Rs. 60 Cr. until 10 month ended January 2025. The company benefits from strong off-take agreements with major public sector oil companies, ensuring consistent demand. Additionally, it has a healthy order book of Rs. 141 Cr. upto October 2025, providing strong revenue visibility. The company’s by-product, DDGS, adds another revenue stream, and its stable raw material supply further strengthens its market position. With a solid management team and favourable long-term ethanol demand. These strengths are offset by the regulated nature of industry and risk related to initial stage of operations and also to lower off-take by customers then as envisaged.

About the Company

Indo Nuclear Energy Private Limited (INEPL), was incorporated in 2011. The company operates a 60 KLPD grain-based distillery in Madhya Pradesh to produce bioethanol and by-products like DDGS and CO2. It started production in August 2024. INEPL has secured long-term off-take agreements with major oil companies (IOCL, BPCL, HPCL) to supply ethanol. The company also benefits from government incentives and subsidies.

Unsupported Rating

Not Applicable

Analytical Approach

Acuite has considered the standalone business and financial risk profile of INEPL to arrive at the rating.

Key Rating Drivers

Strengths

Moderately Experienced promoters and stabilisation of plant
(INEPL) is backed by over a decade long experience of its director group. Mr. Nagendra Goel and others who have expertise in the field of construction of Sugar Mills and Power plants. The company is a group concern of BIPS system Limited, an IT and Automation company having experience of over 30 years managed by professional promoters and technical and management graduates. The Company has existing off-take agreements with BPCL, IOCL and HPCL for off-takes for 9 years upto 2031. The company started production in August 2024 and till Jan 2025 has attained a revenue of Rs. 60 Cr. The Company has also an unexecuted orders in hand of Rs. 141 Cr. which provides it near term revenue visibility.

Easy availability of raw materials
The plant is designed to operate with multiple grains which has starch content i.e. Rice, Broken Rice, Maize, spoiled grain which are unfit for human consumption, etc. The rice and maize will be used in the ratio of 80% and 20% as a raw material. Madhya Pradesh ranks among the top 10 rice producing states in the country. Given the availability of the Raw Material in the various districts of the state, it is expected that the Company will be able to procure the raw Material for the project. The company has also made provisions for procuring raw materials from FCI and other suppliers.

Healthy demand potential for ethanol
The long-term demand outlook of ethanol and biofuel remain favourable on the back of a significant demand supply gap, along with the Government’s focus on reducing crude oil import dependency. Further, with the Central Government’s aim to achieve 20 per cent ethanol blending target by 2025, the demand for ethanol is likely to continue

Weaknesses

Expected leveraged capital structure
The company’s capital structure is expected to remain average marked by low net worth base and high gearing over the medium term. The adjusted tangible net worth of the company improved to Rs.12.33 Cr. in FY2024 as compared to Rs.9.75 Cr. in FY2023 due to accretion of reserves. The gearing stood at 6.75 times as on March 2024 as against 2.48 times in FY23. Additionally, the company’s gearing is expected to increase and remain at high levels over the medium term due to the working capital requirements to support its operations. Acuité believes that going forward the financial risk profile of the company is expected to remain average due to leveraged capital structure and below average debt protection metrices due to lower expected profits in initial stages of business over the medium term.

Regulated industry
Raw materials required for grain-based ethanol unit (Bajra, Maize, Broken Rice) are regulated by government policies. Any change in government policies may result in difficulties in raw material procurement. This may result in loss of revenue or lower operating margins.

Rating Sensitivities

Movement in scale of operations and of operating margins
Improvement in capital structure and debt protection metrices

Liquidity Position

Stretched

The company has stretched liquidity as reflected from low expected cash accruals in initial phase of operation, moderate current ratio and dependence on bank line for funding working capital cycle. However, the promoters have financial flexibility to infuse funds in business as reflected from unsecured loans of Rs. 6 Cr. in FY24. Company has an escrow mechanism with bank wherein the proceeds received from customers are used towards meeting debt obligations and balance are utilised for working capital. the Company also maintains a DSRA with bank for 3 months interest and 1 quarterly instalment from date of COD. The company has also availed bank lines of Rs.15 Cr. (enhanced from Rs.7.5 Cr. in October 2024) and is being utilised at 73% for last 6 months ended December 2024. However, generation of optimum cash accruals will remain key rating sensitivity factors.

Outlook: Stable

Other Factors affecting Rating

None

Key Financials

Particulars	Unit	FY 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	0.22	0.32
PAT	Rs. Cr.	(2.63)	0.03
PAT Margin	(%)	(1182.93)	8.33
Total Debt/Tangible Net Worth	Times	6.75	2.48
PBDIT/Interest	Times	14.11	115.81

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

Not Applicable

Any other information

None

Applicable Criteria

• Default Recognition :- https://www.acuite.in/view-rating-criteria-52.htm
• Rating Process and Timeline: https://www.acuite.in/view-rating-criteria-67.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

Date	Name of Instruments/Facilities	Term	Amount (Rs. Cr)	Rating/Outlook
06 Dec 2024	Term Loan	Long Term	77.50	ACUITE B+ \| Stable (Reaffirmed)
06 Dec 2024	Cash Credit	Long Term	7.50	ACUITE B+ \| Stable (Reaffirmed)
08 Sep 2023	Term Loan	Long Term	77.50	ACUITE B+ \| Stable (Assigned)
08 Sep 2023	Cash Credit	Long Term	7.50	ACUITE B+ \| Stable (Assigned)

Annexure - Details of instruments rated

Lender’s Name	ISIN	Facilities	Date Of Issuance	Coupon Rate	Maturity Date	Quantum (Rs. Cr.)	Complexity Level	Rating
Indian Bank	Not avl. / Not appl.	Bank Guarantee (BLR)	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	1.50	Simple	ACUITE A4+ \| Assigned
Indian Bank	Not avl. / Not appl.	Cash Credit	27 Oct 2024	Not avl. / Not appl.	Not avl. / Not appl.	7.50	Simple	ACUITE BB- \| Stable \| Upgraded ( from ACUITE B+ )
Indian Bank	Not avl. / Not appl.	Cash Credit	27 Oct 2024	Not avl. / Not appl.	Not avl. / Not appl.	7.50	Simple	ACUITE BB- \| Stable \| Assigned
Indian Bank	Not avl. / Not appl.	Term Loan	27 Oct 2024	Not avl. / Not appl.	31 May 2031	77.50	Simple	ACUITE BB- \| Stable \| Upgraded ( from ACUITE B+ )

Contacts

Mohit Jain
Senior Vice President - Rating Operations

Abhishek Singh
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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