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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 10.00 | - | ACUITE A4 | Reaffirmed & Withdrawn |
| Bank Loan Ratings | 10.00 | ACUITE B+ | Reaffirmed & Withdrawn | - |
| Total Outstanding Quantum (Rs. Cr) | 0.00 | - | - |
| Total Withdrawn Quantum (Rs. Cr) | 20.00 | - | - |
| Rating Rationale |
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Acuité has reaffirmed & withdrawn the long term rating of ‘ACUITE B+’ (read as ACUITE B plus) on the Rs.10.00 cr. bank facilities and short term rating of ‘ACUITE A4’ (read as ACUITE A four ) on the Rs.10.00 cr. bank facilities of Lone Star Holdings Private Limited.
This rating withdrawal is in accordance with the Acuité’s policy on withdrawal of rating. The rating is being withdrawn on account of request received from the company and the NOC received from the banker |
| About the company |
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Lone Star Holdings Private Limited (LHPL), a non-deposit taking NBFC incorporated in 1987, commenced commercial operations in 2012 to provide medical equipments on operating lease. The company also offers term financing of medical equipments. Typically, in a lease contract, the asset life is around five to eight years. The company leases out the medical equipment for around 36 months to a hospital (primary lessee). On expiry of the primary lease, the contract is either renewed or the asset is deployed in a hospital/diagnostic center in a Tier 2 city under secondary lease arrangement.
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| Analytical Approach |
| Acuité has considered the standalone business and financial risk profiles of the LHPL to arrive at this rating. |
Key Rating Drivers
| Strength |
| Experienced management & reputed customer base
LHPL benefits from its experienced management. Mr. Sundeep Ramgarhia, Director, has around eight years of experience in medical equipment financing. He has been associated with GE Capital in the leasing, financial and private equity business and during his stint with GE, he had developed contacts with the leading hospitals and doctors in the country. LHPL caters to a reputed clientele base, viz, Fortis Hospital & Kidney Institute, Seven Hills Healthcare Private Ltd., Marc Medical Systems, ILS Hospital, Mission of Mercy Hospital & Research Centre amongst others. LHPL has leveraged on its promoter’s prior experience in the healthcare sector to enter into relationships with leading hospitals in the country. |
| Weakness |
| Competitive landscape of the equipment financing industry
LHPL faces competition from banks and institutions that offer structured financial solutions to healthcare institutions/clinics. Leasing of medical equipment is yet to pick up in a significant manner with several hospitals/clinics choosing to buy and own equipments rather than lease them. LHPL’s ability to scale up operations against the backdrop of intense competition will depend on its ability to offer optimal cost effective solutions in tune with the client’s requirements. |
| Rating Sensitivity |
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| Material Covenants |
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None
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| Liquidity Position |
| Adequate |
| The company has cash and cash equivalents of Rs 5.72 Cr as on March 31, 2022 |
| Outlook: |
| Not Applicable |
| Other Factors affecting Rating |
| None |
| Key Financials - Standalone / Originator | ||||||||||||||||||||||||||||||||||||||||
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*Total income equals to Net Interest Income plus other income.
*Not available |
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| Status of non-cooperation with previous CRA (if applicable): |
| None |
| Any other information |
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Acuité is yet to receive the latest No Default Statement (NDS) from the rated entity, despite repeated requests and follow-ups. However the team has obtained CRIF which has categorized the account as Standard. |
| Applicable Criteria |
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• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm • Banks And Financial Institutions: https://www.acuite.in/view-rating-criteria-45.htm • 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 |
| https://www.acuite.in/criteria-complexity-levels.htm |
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