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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 100.00 | ACUITE BB+ | Downgraded | Issuer not co-operating* | - |
| Total Outstanding Quantum (Rs. Cr) | 100.00 | - | - |
| Rating Rationale |
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Acuité has downgraded the long-term rating to ‘ACUITE BB+’ (read as ACUITE double B plus) from "ACUITE BBB+' (read as ACUITE triple B plus) on the Rs.100.00 Cr. bank facilities of Kanika Investment Limited (KIL). The rating is now flagged as "Issuer not corporating' and is based on the best avaliable information. The rating has been downgraded on account of information risk |
| About the Company |
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KIL was incorporated in 1979, as an investment company for the promoters of DBL. It is wholly owned subsidiary of Dalmia Bharat Limited (DBL). Subsequently in May 2016, it started its operations as Nonbanking financial company (NBFC-ND). Initially, KIL was in various business verticals including dealer financing, unsecured business loans, equipment loans and loans to microfinance institutions but now shifted its focus entirely on dealer financing. KIL has been sold to Shri Nirman Limited (SNL) in Sep, 2017. KIL's shares are currently held by SNL and Keshav Power Limited (KPL). SNL and KPL, both are investment companies of the promoters.
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| About Dalmia Group |
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DBL is a flagship company of Dalmia group listed on BSE and NSE. The group is led by Mr. Puneet Dalmia and Mr. Gautam Dalmia as Managing directors. It is a business conglomerate with interests in industries including Cement manufacturing, power generation and transmission, sugar manufacturing and refractories. DBL operates the entire business through its two wholly owned subsidiaries namely Dalmia Cement Bharat Limited (DCBL) and Dalmia Power Limited and their step-down subsidiaries. For FY2022, DBL's revenue and PAT on consolidated basis accounts for Rs. 11,441.00 crore and Rs. 1,173.00 crore respectively. The net worth of DBL as on March 31, 2022 is Rs. 12313.00 crore.
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| Non-cooperation by the issuer/borrower |
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Acuité has been requesting for data, information and undertakings from the rated entity for conducting surveillance & review of the rating. However, the issuer / borrower failed to submit such information before the due date. Acuité believes that information risk is a critical component in such ratings, and noncooperation by the issuer along with an 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.
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| Limitation regarding information availability |
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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 endeavored 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.
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| Rating Sensitivities |
| No information provided by the issuer / available for Acuite to comment upon. |
| Material Covenants |
| Not Applicable |
| Liquidity Position |
| "No information provided by the issuer / available for Acuite to comment upon. |
| Outlook |
| Not Applicable |
| Other Factors affecting Rating |
| None |
| Key Financials: |
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The rated entity has not shared the latest financial statements despite repeated requests.
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| Status of non-cooperation with previous CRA |
| Not Applicable |
| Any other information |
| None |
| Applicable Criteria |
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• Default Recognition: https://www.acuite.in/view-rating-criteria-52.htm • Non-Banking Financing Entities: https://www.acuite.in/view-rating-criteria-44.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 Acuité Ratings & Research Limited www.acuite.in 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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