Press Release May 28, 2024 KARNATAKA AGRO CHEMICALS Rating Downgraded and Issuer not co-operating

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	60.78	ACUITE C | Downgraded | Issuer not co-operating*	-
Bank Loan Ratings	5.00	-	ACUITE A4 | Downgraded | Issuer not co-operating*
Total Outstanding	65.78	-	-

Rating Rationale

Acuité has downgraded long-term rating at 'ACUITE C' (read as ACUITE C) from 'ACUITE BBB-' (read as ACUITE triple B minus) and short-term rating at 'ACUITE A4' (read as ACUITE A four) from 'ACUITE A3' (read as ACUITE A three) on the Rs.65.78 Crore bank facilities of Karnataka Agro Chemicals. The rating is now indicative and is based on best available information. The rating downgrade is on account of information risk. This rating is now flagged as issuer not cooperating.   Rationale for downgrade Acuité has considered the consolidated approach for Karnataka Agro Chemicals. Further, as per the reporting in Credit Bureau Report, one of the account of two group entities is into delinquency, hence there is a high likelihood of stretched liquidity. On the basis of the available information, rating is being downgraded.

About the Company

­Karnataka Agro Chemicals (KAC) is based in Bengaluru, was established in 1974 by Dr. Mr. Gopalakrishna Pommayya Shetty. KAC manufactures various fertilizer products, viz.: Single Micronutrients (Chelated & Non-Chelated), Major Nutrients, Secondary nutrients (Chelated & Non-Chelated), Multi Micronutrients (Chelated & Non Chelated), Plant Bio-Activators, Plant Growth Regulator and Spray Adjuvants. It has manufacturing units at Nagarbhavi and Tumkur in Karnataka, Ghaziabad in Uttar Pradesh, and Bhubaneshwar in Odisha. Its daily operations are managed by Mr. Mahesh Gopalakrishna Shetty and Mr. Nishchita Mahesh Shetty.

About the Group

­Multiplex Group comprises of three companies i.e. Karnataka Agro Chemicals (estd. 1974) , Multiplex Agricare Private Limited (estd. 1996) & Multiplex Bio-Tech Private Limited (estd. 2000). The group is engaged in manufacturing of fertilizers and related products. Karnataka Agro Chemicals (KAC) is based in Bengaluru, was established in 1974 by Dr. G.P Shetty. KAC manufactures various fertilizer products, viz.: Single Micronutrients (Chelated & Non Chelated), Major Nutrients, Secondary nutrients (Chelated & Non Chelated), Multi Micronutrients (Chelated & Non Chelated), Plant Bio-Activators, Plant Growth Regulator and Spray Adjuvants. It has manufacturing units at Nagarbhavi and Tumkur in Karnataka; Ghaziabad in Uttar Pradesh and Bhubaneshwar in Odisha. Its daily operations are managed by Mr. Mahesh Shetty. Incorporated in 2000, Multiplex Bio-Tech Private Limited (MBPL) is the one of the Group Company of MULTIPLEX group. MBPL is promoted by Mr. Mahesh Gopalakrishna and his family members. It is engaged in manufacturing and marketing of micronutrients fertilizers and various bio Products, viz. Multiplex Organic Manure, Bio-Fertilizers, Bio-Fungicides, Bio Insecticides and Bio Pesticides. The Group has manufacturing unit located at Nelamangala near Bangalore (Karnataka). It is also engaged in manufacturing of agro based bi-products which are used for agriculture crop growth.

Unsupported Rating

­Not Applicable

Non-cooperation by the issuer/borrower

­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 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 Acuité to comment upon.

Liquidity Position

­No information provided by the issuer / available for Acuité 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.	324.00	305.12
PAT	Rs. Cr.	17.70	15.46
PAT Margin	(%)	5.46	5.07
Total Debt/Tangible Net Worth	Times	1.95	1.85
PBDIT/Interest	Times	4.97	4.25

Status of non-cooperation with previous CRA

­Not Applicable

Any other information

­None

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 06 Mar 2023 Letter of Credit Short Term 5.00 ACUITE A3 (Reaffirmed) Proposed Long Term Bank Facility Long Term 19.02 ACUITE BBB- | Stable (Reaffirmed) Secured Overdraft Long Term 25.00 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 16.76 ACUITE BBB- | Stable (Reaffirmed) 17 Dec 2021 Letter of Credit Short Term 5.00 ACUITE A3 (Assigned) Proposed Long Term Bank Facility Long Term 19.02 ACUITE BBB- | Stable (Assigned) Secured Overdraft Long Term 25.00 ACUITE BBB- | Stable (Assigned) Term Loan Long Term 16.76 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 Karnataka Bank Ltd Not avl. / Not appl. Letter of Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 5.00 Simple ACUITE A4 | Downgraded | Issuer not co-operating* ( from ACUITE A3 ) Not Applicable Not avl. / Not appl. Proposed Long Term Bank Facility Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 19.02 Simple ACUITE C | Downgraded | Issuer not co-operating* ( from ACUITE BBB- ) Karnataka Bank Ltd Not avl. / Not appl. Secured Overdraft Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 25.00 Simple ACUITE C | Downgraded | Issuer not co-operating* ( from ACUITE BBB- ) Karnataka Bank Ltd Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 31 Aug 2029 16.76 Simple ACUITE C | Downgraded | Issuer not co-operating* ( from ACUITE BBB- )

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*Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support)

1. KARNATAKA AGRO CHEMICALS 2. MULTIPLEX AGRICARE PRIVATE LIMITED 3. MULTIPLEX BIOTECH PRIVATE LIMITED­

Contacts

Analytical Details	Contact Details
Mohit Jain Senior Vice President - Rating Operations Tel: 022–49294017 mohit.jain@acuite.in Archita Sharma Associate - Rating Operations Tel: 022-49294065 archita.sharma@acuite.in	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@acuite.in Tel: 022-49294011 rating.desk@acuite.in

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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. Please visit https://www.acuite.in/faqs.htm to refer FAQs on Credit Rating.