Press Release

Press Release

June 24, 2026

KARP IMPEX LIMITED
Rating Reaffirmed and Withdrawn

Product	Quantum (Rs. Cr) (SEBI)	Quantum (Rs. Cr) (Other FSR)	Long Term Rating	Short Term Rating	Regulated By
Bank Loan Ratings	0.00	550.00	ACUITE BBB- \| Negative \| Reaffirmed	-	RBI
Bank Loan Ratings	0.00	500.00	Not Applicable \| Withdrawn	-	RBI
Total Outstanding	0.00	550.00	-	-	-
Total Withdrawn	0.00	500.00	-	-	-

Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available.

Rating Rationale

Acuite has reaffirmed its long-term rating of 'ACUITE BBB-' (read as ACUITE triple B minus) on the Rs.550.00 Cr. bank facilities of Karp Impex Limited (KIL). The outlook is revised from ‘Stable’ to 'Negative'.

Further, Acuite has withdrawn its long-term rating without assigning any rating on the Rs. 48.00 Cr. bank facilities of Karp Impex Limited (KIL) as the instruments are fully repaid. The rating is being withdrawn on account of request received from the issuer and No Dues Certificate received from the banker.

Acuite has also withdrawn its rating on the proposed long-term bank facility of Rs. 452.00 Cr. of Karp Impex Limited (KIL) without assigning any rating as it is a proposed facility. The rating is being withdrawn on account of request received from the issuer.

The withdrawal is in accordance with Acuite's policy on withdrawal of rating as applicable to the respective facility / instrument.

Rationale for rating
The revision in outlook to ‘Negative’ factors in the continued moderation in operating scale and profitability amid persistent
Weakness in the natural diamond industry, driven by subdued export demand, rising competition from lab-grown diamonds, and supply-side disruptions. The company’s working capital operations remained intensive. Further, the financial risk profile also remains average and liquidity remained stretched. However, the rating considers, company's established presence in the natural diamond segment, supported by its long operating track record, reputed customer base, and niche position in premium diamond manufacturing. Going forward, while near-term pressure on growth and margins may persist and company’s ability to improve its operating performance backed by its established market position and industry experience would remain as a key rating monitorable.

About the Company

Mumbai based Karp Impex Limited (KIL) was established as a partnership firm in 1983 by Mr. Anil B. Virani and Mr. Kishore B. Virani. The firm was converted to a closely held unlisted public limited company in 1995. KIL has manufacturing facilities located in Mumbai and Surat. KIL is an exclusive supplier of patented cut and polished diamonds set in writing instruments and women’s accessories. KIL derives its revenues from manufacturing, processing and trading of cut and polished diamonds.

Unsupported Rating

Not applicable

Analytical Approach

Acuite has considered a standalone approach to the business and the financial profile of Karp Impex Limited (KIL) to arrive at the rating.

Key Rating Drivers

Strengths

Experienced management and established operational track record
KIL started operations in 1983 to process and sell polished diamonds. The promoters, Mr. Anil B. Virani and Mr. Kishore B. Virani, have more than 3 decades of experience in the diamond industry. This has helped the company in maintaining good business relations with clients. KIL exports around 65 percent of its total sales primarily in the markets of Hong Kong, Belgium and Dubai and imports around 75 percent of its total requirement of rough diamonds from Botswana, Hong Kong and Dubai. Acuite believes that despite the scale of operations declining, the business would continue to benefit from the experienced management over the medium term.

Weaknesses

Decline in scale of operations and moderation in profitability margins
The company has generated revenue of Rs. 1,174.57 Cr. FY26 (prov.) against Rs. 1,318.26 Cr. in FY25 and Rs. 1852.59 Cr. in FY2024. The overall decline in the operating scale is attributed to the increased demand for “Lab Grown Diamonds”, reduced demand for natural diamonds in major export destinations (America & China) and supply side issues such as G7 Sanctions on Russian origin diamonds. The EBITDA margins of the company stood at 5.21 per cent in FY26 (prov.) as compared to 6.95 per cent in FY25 and 5.72 per cent in FY24. The moderation in EBITDA margins is mainly on account of elevated overheads. Subsequently, the PAT margins of the company stood at 1.13 per cent in FY26 (prov.) as compared to 2.07 per cent in FY25 due to high finance cost. Going forward, the company is likely to observe moderation in profitability margins and is likely to face challenges to maintain the topline on account of decreased demand of natural diamonds in the national as well as international markets coupled with the entry of the lab grown diamonds, thus this would remain as a key rating monitorable.

Average financial risk profile
The financial risk profile of the company stood average, despite high net worth and low gearing due to below average debt protection metrics and high Debt-EBITDA . The tangible net-worth stood at Rs. 888.47 Cr. as on 31st March 2026 (Prov.) against Rs. 875.26 Cr. as on 31st March 2025. The improvement is on account of accretion of profits to reserve. The total debt of the company stood at Rs. 639.34 Cr. as on 31st March 2026 (Prov.) against Rs. 562.79 Cr. as on 31st March 2025. The total debt comprises of Rs. 26.53 Cr. long term debt, Rs. 184.30 Cr. of USL, Rs. 378.51 Cr of short term debt and Rs. 50 Cr. CPLTD. The gearing stood low at 0.72 times in FY26 (Prov.) against 0.64 times in FY25. Further, the interest coverage ratio (ICR) of the company stood at 1.48 times in FY26 (Prov.) against 1.79 times in FY25. The debt service coverage ratio (DSCR) stood at 0.89 times in FY26 (Prov.) against 1.60 times in FY25. The TOL/TNW stood at 0.78 times in FY26 (Prov.) against 0.72 times in FY25. The Debt-EBITDA stood high at 10.06 times as compared to 6.13 times in FY26 (Prov.) and FY25 respectively. Acuite believes that the financial risk profile of KIL is likely to remain average over the medium term on the back of moderation in coverage indicators and cash accruals.

Intensive Working Capital Operations
The operations of the company remained working capital intensive marked by gross current asset (GCA) of 475 days as on 31st March 2026 (Prov.) against 402 days as on 31st March 2025. The inventory and debtor days of the company stood at 326 days and 131 days respectively as on 31st March 2026 (Prov.) against 294 days and 116 days respectively as on 31st March 2025. The increase in inventory days is due to the accumulation of rough diamond inventory. On the other hand, the creditor days of the company stood at 14 days as on 31st March 2026 (Prov.) against 18 days as on 31st March 2025. Further, the average bank limit utilization at the month end balance stood moderate at 74 per cent for 6 months ending May 26. Acuite believes that KILs operations would remain working capital intensive on the back of high inventory holding.

Susceptibility of profitability margins to volatility in prices of diamonds and fluctuations in forex risk
Due to the high inventory holding period, the Company runs an inherent risk of volatility in raw material prices. The Company imports raw material requirements; i.e. rough diamonds and its exports are ~65.37 percent of its total sales. The company evaluates exchange rate exposure arising from foreign currency transactions and the company follows established risk management policies, including the use of derivatives like foreign exchange, forward contracts to hedge exposure to foreign currency risk , however, the price volatility risk in rough diamonds threatens the thin profitability margins of the company due to long working capital cycles.

ESG Factors Relevant for Rating

In case of Gems and Jewellery industry, on the social front, labour management issues, such as employee safety & development and employment quality, remain a crucial risk in manufacturing industry. Additionally, key material issues such as responsible procurement, community support & development, product safety & quality, human rights, equal opportunity & employee development can influence social scores. Further on the environment front, GHG emissions, material efficiency, waste management, environmental management, energy efficiency and green supply chain are significant environmental issues in the manufacturing industry. Additionally, key material issues such as ESG reporting transparency, biodiversity impact and green products can influence environmental scores.

Rating Sensitivities

Potential triggers (individual or collective) for an upward rating action:

Significant growth in revenues while maintaining healthy profitability
Improvement in working capital management with GCA below 250 days consistently
Improvement in financial risk profile with debt to EBITDA below 4 times

Potential triggers (individual or collective) for a downward rating action:

Significant decline in revenues and profitability margins with EBITDA margins below 4.5 per cent
Deterioration in financial risk profile due to unexpected borrowings
Further, elongation in working capital cycle exerting pressure on liquidity

Liquidity Position

Stretched

The liquidity profile of the company is stretched. The company generated a net cash accrual of Rs. 16.07 Cr. as on as on 31st March 2026 (Prov.) against Rs.23.11 Cr. debt repayment obligations in the same period. Since the company does not have sufficient cash accruals to repay its maturing debt obligations, the shortfall is made good with promoters funds. The current ratio of the company improved to 3.19 times as on 31st March 2026 (Prov.) against 2.62 times as on 31st March 2025. This decrease was observed because of the strategic decision to halt the purchase of additional raw materials because of decreased demand. The NCA/TD stood at 0.03 times in FY26 (Prov.) as against 0.05 times in FY25. Further, the average bank limit utilization at the month end balance stood moderate at 74 per cent for 6 months ending May'26. The team believes that the liquidity of KIL is likely to remain stretched over the medium term on account of insufficient accruals against its maturing repayment obligations.

Outlook: Negative

Other Factors affecting Rating

None

Key Financials

Particulars	Unit	FY 26 (Provisional)	FY 25 (Actual)
Operating Income	Rs. Cr.	1174.57	1318.26
PAT	Rs. Cr.	13.22	27.35
PAT Margin	(%)	1.13	2.07
Total Debt/Tangible Net Worth	Times	0.72	0.64
PBDIT/Interest	Times	1.48	1.79

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
• 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
26 Mar 2025	PC/PCFC	Long Term	21.00	ACUITE BBB- \| Stable (Downgraded from ACUITE BBB \| Stable)
	Proposed Packing Credit	Long Term	518.00	ACUITE BBB- \| Stable (Downgraded from ACUITE BBB \| Stable)
	PC/PCFC	Long Term	95.00	ACUITE BBB- \| Stable (Downgraded from ACUITE BBB \| Stable)
	Post Shipment Credit	Long Term	95.00	ACUITE BBB- \| Stable (Downgraded from ACUITE BBB \| Stable)
	Post Shipment Credit	Long Term	12.50	ACUITE BBB- \| Stable (Downgraded from ACUITE BBB \| Stable)
	PC/PCFC	Long Term	34.00	ACUITE BBB- \| Stable (Downgraded from ACUITE BBB \| Stable)
	Post Shipment Credit	Long Term	51.00	ACUITE BBB- \| Stable (Downgraded from ACUITE BBB \| Stable)
	PC/PCFC	Long Term	5.20	ACUITE BBB- \| Stable (Downgraded from ACUITE BBB \| Stable)
	PC/PCFC	Long Term	10.00	ACUITE BBB- \| Stable (Downgraded from ACUITE BBB \| Stable)
	Post Shipment Credit	Long Term	7.80	ACUITE BBB- \| Stable (Downgraded from ACUITE BBB \| Stable)
	PC/PCFC	Long Term	60.00	ACUITE BBB- \| Stable (Downgraded from ACUITE BBB \| Stable)
	Post Shipment Credit	Long Term	87.00	ACUITE BBB- \| Stable (Downgraded from ACUITE BBB \| Stable)
	PC/PCFC	Long Term	17.40	ACUITE BBB- \| Stable (Downgraded from ACUITE BBB \| Stable)
	Post Shipment Credit	Long Term	23.60	ACUITE BBB- \| Stable (Downgraded from ACUITE BBB \| Stable)
	PC/PCFC	Long Term	12.50	ACUITE BBB- \| Stable (Downgraded from ACUITE BBB \| Stable)
29 Dec 2023	PC/PCFC	Long Term	35.00	ACUITE BBB \| Stable (Reaffirmed)
	Post Shipment Credit	Long Term	87.00	ACUITE BBB \| Stable (Reaffirmed)
	PC/PCFC	Long Term	17.40	ACUITE BBB \| Stable (Reaffirmed)
	Post Shipment Credit	Long Term	23.60	ACUITE BBB \| Stable (Reaffirmed)
	PC/PCFC	Long Term	50.00	ACUITE BBB \| Stable (Reaffirmed)
	Post Shipment Credit	Long Term	52.00	ACUITE BBB \| Stable (Reaffirmed)
	Proposed Packing Credit	Long Term	343.70	ACUITE BBB \| Stable (Reaffirmed)
	PC/PCFC	Long Term	10.53	ACUITE BBB \| Stable (Reaffirmed)
	Post Shipment Credit	Long Term	10.47	ACUITE BBB \| Stable (Reaffirmed)
	PC/PCFC	Long Term	118.65	ACUITE BBB \| Stable (Reaffirmed)
	Post Shipment Credit	Long Term	118.65	ACUITE BBB \| Stable (Reaffirmed)
	Post Shipment Credit	Long Term	25.00	ACUITE BBB \| Stable (Reaffirmed)
	PC/PCFC	Long Term	34.00	ACUITE BBB \| Stable (Reaffirmed)
	Post Shipment Credit	Long Term	51.00	ACUITE BBB \| Stable (Reaffirmed)
	PC/PCFC	Long Term	5.20	ACUITE BBB \| Stable (Reaffirmed)
	Post Shipment Credit	Long Term	7.80	ACUITE BBB \| Stable (Reaffirmed)
	PC/PCFC	Long Term	60.00	ACUITE BBB \| Stable (Reaffirmed)

Annexure - Details of instruments rated

Lender’s Name	ISIN	Facilities	Listing Status	Regulated By	Date Of Issuance	Coupon Rate	Maturity Date	Quantum (Rs. Cr.)	Complexity Level	Rating
India Exim Bank	Not avl. / Not appl.	PC/PCFC	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	15.00	Simple	ACUITE BBB- \| Negative \| Reaffirmed \| Stable to Negative
State Bank of India	Not avl. / Not appl.	PC/PCFC	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	72.50	Simple	ACUITE BBB- \| Negative \| Reaffirmed \| Stable to Negative
BANK OF INDIA (BOI)	Not avl. / Not appl.	PC/PCFC	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	26.00	Simple	ACUITE BBB- \| Negative \| Reaffirmed \| Stable to Negative
Union Bank of India	Not avl. / Not appl.	PC/PCFC	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	40.00	Simple	ACUITE BBB- \| Negative \| Reaffirmed \| Stable to Negative
Punjab National Bank	Not avl. / Not appl.	PC/PCFC	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	13.40	Simple	ACUITE BBB- \| Negative \| Reaffirmed \| Stable to Negative
RBL Bank	Not avl. / Not appl.	PC/PCFC	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	10.00	Simple	ACUITE Not Applicable \| Withdrawn
IDBI Bank Ltd.	Not avl. / Not appl.	PC/PCFC	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	12.50	Simple	ACUITE Not Applicable \| Withdrawn
YES BANK LIMITED	Not avl. / Not appl.	PC/PCFC	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	5.20	Simple	ACUITE Not Applicable \| Withdrawn
Union Bank of India	Not avl. / Not appl.	Post Shipment Credit	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	60.00	Simple	ACUITE BBB- \| Negative \| Reaffirmed \| Stable to Negative
Punjab National Bank	Not avl. / Not appl.	Post Shipment Credit	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	19.60	Simple	ACUITE BBB- \| Negative \| Reaffirmed \| Stable to Negative
BANK OF INDIA (BOI)	Not avl. / Not appl.	Post Shipment Credit	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	40.00	Simple	ACUITE BBB- \| Negative \| Reaffirmed \| Stable to Negative
State Bank of India	Not avl. / Not appl.	Post Shipment Credit	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	72.50	Simple	ACUITE BBB- \| Negative \| Reaffirmed \| Stable to Negative
IDBI Bank Ltd.	Not avl. / Not appl.	Post Shipment Credit	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	12.50	Simple	ACUITE Not Applicable \| Withdrawn
YES BANK LIMITED	Not avl. / Not appl.	Post Shipment Credit	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	7.80	Simple	ACUITE Not Applicable \| Withdrawn
Not Applicable	Not avl. / Not appl.	Proposed Packing Credit	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	191.00	Simple	ACUITE BBB- \| Negative \| Reaffirmed \| Stable to Negative
Not Applicable	Not avl. / Not appl.	Proposed Packing Credit	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	452.00	Simple	ACUITE Not Applicable \| Withdrawn

Contacts

Mohit Jain
Chief Analytical Officer - Rating Operations

Anuja Bele
Associate Analyst - Rating Operations

Contact details exclusively for investors and lenders

Mob: +91 8591310146
Email ID: analyticalsupport@acuite.in

List of instruments and names of regulators of the instruments

As required by SEBI Circular (SEBI/HO/DDHS/DDHS-PoD-2/I/4685/2026) dated February 10, 2026, a list of activities or instruments falling under the purview of various Financial Sector Regulators (FSRs), along with the names of respective FSRs, is being disclosed below:
A. Rating Activity:

Sr. No.	Instrument / activity Name	Regulator of the instrument
1	Listed/Proposed to be listed Bonds/Debentures/Preference Shares (all securities)	SEBI
2	Unlisted/Proposed to be unlisted Bonds/Debentures/ Preference share (all securities)	MCA
3	Listed PTCs / Securitisation Notes (originated by entities regulated by RBI)¹	SEBI
4	Listed PTCs / Securitisation Notes (originated by entities not regulated by RBI)¹	SEBI
5	Unlisted PTCs / Securitisation Notes (originated by entities regulated by RBI)¹	RBI
6	Listed Commercial Paper and NCDs with original maturity less than 1 year	RBI
7	Unlisted Commercial Paper and NCDs with original maturity less than 1 year	RBI
8	Loan Facilities (Fund/Non-Fund Based) from Bank / NBFCs/ NHB/ FIs ²	RBI
9	External Commercial Borrowings and other similar borrowings	RBI
10	Certificates of Deposit	RBI
11	Fixed Deposits raised by NBFCs, Banks, HFCs, FIs	RBI
12	Fixed Deposits raised by corporates other than NBFCs, Banks, HFCs, FIs	MCA
13	Inter Corporate Deposits/Loans extended by Corporates	MCA
14	Borrowing programme ³	-
15	Issuer Ratings ⁴	-
16	Credit Ratings for Capital Protection Oriented Schemes (by Mutal Funds and AIFs)	SEBI
17	Credit quality ratings (CQRs) for Mutual Fund Schemes and Schemes of AIFs	SEBI
18	Listed Security Receipts	SEBI
19	Unlisted Security Receipts	RBI
20	Independent Credit Evaluation (ICE)	RBI
21	Expected Loss Ratings (For Loan Facilities [Fund/Non-Fund based] from Banks/NBFCs/NHB/FIs)	RBI
22	Expected Loss Ratings (Listed / Proposed to be listed Bonds / Debentures / Preference Shares (all securities))	SEBI
23	Expected Loss Ratings (Unlisted / Proposed to be unlisted Bonds/ Debentures / Preference Shares (all securities))	MCA
24	Unlisted PTCs / Securitisation Notes (originated by entities not regulated by RBI) ¹	Investor-side Regulator such as IRDAI, PFRDA ⁵

¹Includes securitisation transactions involving assignee payout, acquirer's payout.

² Includes bank facilities such as liquidity facility, second loss facility that are part of securitisation transactions.
³The rated instrument may involve issuance of different instruments such as debt securities (listed or otherwise), bank loans, commercial paper (listed or otherwise), etc. The regulator of the instrument may accordingly be SEBI, RBI or MCA and can only be determined upon issuance. In Press Release(s) subsequent to issuance(s), Acuite shall separately capture the rated quantum details along with names of respective regulators.
⁴ There is no instrument being rated and hence, Regulator of the Instrument is not applicable. The rating scale and definitions are being followed as stipulated in SEBI Master Circular for CRAs.
⁵ These ratings were assigned during regulatory regime prior to the introduction of SEBI CRA Circular dated Feb 10, 2026 and accordingly, investor side regulators have been included.

B. Other activities:

Sr. No.	Activity Name	Regulator of the activity
1	Monitoring Agency	SEBI
2	Research activities, incidental to rating, such as research for Economy, Industries and Companies ⁶	Not applicable

⁶ permitted by SEBI vide SEBI Master Circular for CRAs.

Disclosure on instruments / activities and names of regulators:

A list of products/activities or ratings of instruments falling under the purview of various financial sector regulators (FSRs) along with the names of respective FSRs has also been duly disclosed by Acuite on its website. A link to the same has been provided below for ready reference:

https://acuite.in/Activities-and-Regulators.html

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.

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.

Note: None of the Directors on the Board of Acuité Ratings & Research Limited are members of any rating committee and therefore do not participate in discussions regarding the rating of any entity.