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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 295.25 | ACUITE BB+ | Downgraded | Issuer not co-operating* | - |
| Bank Loan Ratings | 8.09 | - | ACUITE A4+ | Downgraded | Issuer not co-operating* |
| Total Outstanding | 303.34 | - | - |
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Rating Rationale |
| 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) and short-term rating to 'ACUITE A4+' (read as ACUITE A four plus) from 'ACUITE A2' (read as ACUITE A two) on the Rs.303.34 Cr. bank facilities of MALBROS INTERNATIONAL PRIVATE LIMITED(MIPL). The rating is now flagged as “Issuer Not-Cooperating” and is downgraded on account of information risk. |
| About the Company |
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Malbros International Private Limited (MIPL) was incorporated in 1988 and was later acquired by the Malhotra family in 2004. It has one grain based distillery in Ferozpur, Punjab and one bottling plant in the same compound. The company has installed capacity of 280 KLPD out of which 180 KLPD is added in FY2022. The distillery has its own in-house power generation unit. The company is engaged in three lines of business namely Trading & Bottling of IMFL, Manufacturing of Country liquor, Manufacturing of IMFL. The company manufactures its own ENA by procuring grain from Punjab. MIPL supplies ENA in bulk quantity to well-established liquor houses – including UB Group, Seagrams, Globus Spirits Limited, Tilaknagar Distilleries etc. The company has an integrated grain milling section wherein it procures grain, mills it and prepares the grain for manufacturing ENA. Further Capacity of 160 KLPD will be added in FY 24
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| About the Group |
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Oasis Group (OG) is promoted by the Malhotra Family and has an operational track record of over five decades in the liquor industry. The Group currently owns five distillation units and 3 Bottling Plants situated in Punjab, Haryana, Madhya Pradesh, Rajasthan and Chandigarh,with a collective grain spirit production of more than 22.10 Crore liters per annum. The Group is also engaged in the retail trading business of liquor through Government contract route, by submitting tenders in the State of Punjab, Haryana and U.T. Chandigarh. At present, it owns about 600 retail vends in Punjab. The group’s core business strength lies in the business of alcohol production, manufacturing and marketing of grain based IMFL. It is one of the largest retailers of liquor in the state of Punjab. Three plants owned by the group have their in-house power generation units and the group also markets DDGS (Dried Distilled Grain Soluble) for the cattle industry and harnesses Carbon-di-Oxide for industrial uses. DDGS and Carbon-di-Oxide are byproducts of the ENA manufacturing and distillation process.The Oasis group commenced its operations in 1980`s under the lead of Mr. Deep Malhotra and his family and thus the group boasts a long track record of operations of four decades in the Alcohol manufacturing and trading industry. Currently, the day-to-day operations of the group are managed by Mr. Gautam Malhotra, Miss Dimpy Malhotra and Mr. Gaurav Malhotra.
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| Unsupported Rating |
| Not applicable. |
| Non-cooperation by the issuer/borrower |
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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. 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.
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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. |
| Liquidity Position |
| No information provided by the issuer / available for Acuite to comment upon. |
| Outlook |
| Not applicable. |
| Other Factors affecting Rating |
| None. |
| Particulars | Unit | FY 22 (Actual) | FY 21 (Actual) |
| Operating Income | Rs. Cr. | 2134.97 | 1763.77 |
| PAT | Rs. Cr. | 81.92 | 56.17 |
| PAT Margin | (%) | 3.84 | 3.18 |
| Total Debt/Tangible Net Worth | Times | 1.07 | 0.88 |
| PBDIT/Interest | Times | 5.17 | 3.74 |
| Status of non-cooperation with previous CRA |
| Not Applicable |
| Any other information |
| None. |
| Applicable Criteria |
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• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm • Consolidation Of Companies: https://www.acuite.in/view-rating-criteria-60.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 |
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In order to inform the investors about complexity of instruments, Acuité has categorized such Acuité Ratings & Research Limited www.acuite.in 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
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| *Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support) |
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