Product Quantum (Rs. Cr) Long Term Rating Short Term Rating
Bank Loan Ratings 50.50 ACUITE B+ | Downgraded | Issuer not co-operating* -
Bank Loan Ratings 35.00 - ACUITE A4 | Downgraded | Issuer not co-operating*
Total Outstanding Quantum (Rs. Cr) 85.50 - -
 
Rating Rationale
­Acuité has downgraded its long-term rating to ‘ACUITE B+’ (read as ACUITE B plus) from 'ACUITE BB-' ((read as ACUITE double B minus) and short-term rating of ‘ACUITE A4’ (read as ACUITE A four) from ACUITE A4+ (read as ACUITE A four Plus) on the Rs.85.50 Cr bank facilities of K GOWDA & CO (KGC).

This rating is now an indicative rating and is based on the best available information. The rating has been downgraded on account of information risk.

About the Company
­K Gowda and Co is a Bangalore-based proprietorship firm established in 1979 by Mr. H R K Gowda. It was converted into a partnership firm in 2010. Currently, Mr. H R K Gowda, Mr. Rakshith Kempeere Gowda, Mr. Vijaysurya Kempeere Gowda, Smt. Bhagyamma are partners in the firm. The firm is a Class-I Contractor engaged in civil construction of buildings, irrigation water supply systems and roads for several government organisations. The partners possess over three decades of experience in civil construction industry.
 
Non-cooperation by the issuer/borrower

A­cuité has been requesting for No Default Statements (NDS); however, despite multiple requests; the Company’s management has remained non-cooperative and not submitted the NDS for the preceding 04 consecutive months. Acuité has also 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 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 has 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 Acuite to comment upon.
 
Material Covenants
­None
 
Liquidity Position
­No information provided by the issuer / available for Acuite to comment upon.
 
Outlook
­None
 
Other Factors affecting Rating
­None
 

Particulars Unit FY 22 (Actual) FY 21 (Actual)
Operating Income Rs. Cr. 100.17 89.91
PAT Rs. Cr. 2.44 2.13
PAT Margin (%) 2.44 2.37
Total Debt/Tangible Net Worth Times 2.76 3.05
PBDIT/Interest Times 3.30 2.68
Status of non-cooperation with previous CRA
­None
 
Any other information
­Acuité is not in receipt of the “No Default Statement (NDS)" since November 2022.
 
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
• Infrastructure Sector: https://www.acuite.in/view-rating-criteria-51.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
 

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook
05 Jan 2023 Bank Guarantee Short Term 17.50 ACUITE A4+ (Assigned)
Cash Credit Long Term 5.00 ACUITE BB- | Stable (Upgraded from ACUITE B+)
Term Loan Long Term 3.00 ACUITE BB- | Stable (Assigned)
Bank Guarantee Short Term 2.50 ACUITE A4+ (Upgraded from ACUITE A4)
Proposed Cash Credit Long Term 15.00 ACUITE BB- | Stable (Assigned)
Cash Credit Long Term 9.50 ACUITE BB- | Stable (Assigned)
Proposed Term Loan Long Term 17.00 ACUITE BB- | Stable (Assigned)
Proposed Bank Guarantee Short Term 15.00 ACUITE A4+ (Assigned)
Term Loan Long Term 0.60 ACUITE BB- | Stable (Upgraded from ACUITE B+)
Proposed Long Term Loan Long Term 0.40 ACUITE BB- | Stable (Assigned)
20 Oct 2021 Term Loan Long Term 0.60 ACUITE B+ (Downgraded and Issuer not co-operating*)
Bank Guarantee Short Term 2.50 ACUITE A4 ( Issuer not co-operating*)
Cash Credit Long Term 5.00 ACUITE B+ (Downgraded and Issuer not co-operating*)
22 Jul 2020 Term Loan Long Term 0.60 ACUITE BB- (Downgraded and Issuer not co-operating*)
Cash Credit Long Term 5.00 ACUITE BB- (Downgraded and Issuer not co-operating*)
Bank Guarantee Short Term 2.50 ACUITE A4 (Downgraded and Issuer not co-operating*)
­

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Complexity Level Rating
Canara Bank Not Applicable Bank Guarantee (BLR) Not Applicable Not Applicable Not Applicable 2.50 Simple ACUITE A4 | Downgraded | Issuer not co-operating*
Canara Bank Not Applicable Bank Guarantee (BLR) Not Applicable Not Applicable Not Applicable 17.50 Simple ACUITE A4 | Downgraded | Issuer not co-operating*
Canara Bank Not Applicable Cash Credit Not Applicable Not Applicable Not Applicable 5.00 Simple ACUITE B+ | Downgraded | Issuer not co-operating*
Canara Bank Not Applicable Cash Credit Not Applicable Not Applicable Not Applicable 9.50 Simple ACUITE B+ | Downgraded | Issuer not co-operating*
Not Applicable Not Applicable Proposed Bank Guarantee Not Applicable Not Applicable Not Applicable 15.00 Simple ACUITE A4 | Downgraded | Issuer not co-operating*
Not Applicable Not Applicable Proposed Cash Credit Not Applicable Not Applicable Not Applicable 15.00 Simple ACUITE B+ | Downgraded | Issuer not co-operating*
Not Applicable Not Applicable Proposed Long Term Loan Not Applicable Not Applicable Not Applicable 0.40 Simple ACUITE B+ | Downgraded | Issuer not co-operating*
Not Applicable Not Applicable Proposed Term Loan Not Applicable Not Applicable Not Applicable 17.00 Simple ACUITE B+ | Downgraded | Issuer not co-operating*
Canara Bank Not Applicable Term Loan Not available Not available Not available 3.00 Simple ACUITE B+ | Downgraded | Issuer not co-operating*
Canara Bank Not Applicable Term Loan Not available Not available Not available 0.60 Simple ACUITE B+ | Downgraded | Issuer not co-operating*

Contacts
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About Acuité Ratings & Research
Acuité Ratings & Research Limitedwww.acuite.in