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| Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
| Bank Loan Ratings | 38.30 | ACUITE B | Reaffirmed & Withdrawn | - |
| Total Outstanding Quantum (Rs. Cr) | 0.00 | - | - |
| Total Withdrawn Quantum (Rs. Cr) | 38.30 | - | - |
| Rating Rationale |
| Acuité has reaffirmed and withdrawn the long-term rating of ‘ACUITE B’ (read as ACUITE B) on the Rs.38.30 Cr. bank facilities of MGM Castings Private Limited (MCPL) .The rating is being withdrawn on account of the request received from the company and the NOC received from the banker as per Acuité’s policy on withdrawal of ratings. |
| About the Company |
| Incorporated in 2006, the company has been taken over by the current management – Directors, Mr. Sathynarayan VP and Mr. Purushotham LV Naidu in 2015. The company is based out of Bengaluru (Karnataka), and is in the business of development of commercial properties and leasing out. |
| Analytical Approach |
| Acuité has taken the standalone view of the business and financial risk profile of MCPL to arrive at the rating. |
Key Rating Drivers
| Strengths |
| >Experienced management The promoters of the company Mr. Purushotham Lakshmaiah, and Mr. Sathya Narayan Purushottam have around two decades of experience in the real estate segment. Mr. Purushotham Lakshmaiah has promoted another partnership firm named M/S. Silverline Group and the entity has successfully developed several residential apartments and commercial spaces in and around Bangalore City. >Favourable location of the property: The property is electronic city, Bangalore which is a largest industrial technology hub of Bangalore |
| Weaknesses |
| >Susceptibility of operating performance to dynamics of commercial real estate segment MGM has only one project which is located in Bangalore. As a result, any disruption in the business dynamics or the regulatory environment can adversely impact the business risk profile and operating performance of the company. |
| Rating Sensitivities |
| Not Applicable |
| Material covenants |
| None |
| Liquidity Position |
| Adequate |
| The company generated Net Cash Accruals (NCA) of Rs.(0.75) Cr In FY2022. The company maintained cash and bank balances of Rs.0.01 crore as on March 31,2022. The current ratio of the company is marked moderate at 1.63 times as on 31 March, 2022 as against 0.25 times as on 31 March, 2021. |
| Outlook: Not Applicable |
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| Other Factors affecting Rating |
| None |
| Particulars | Unit | FY 22 (Provisional) | FY 21 (Actual) |
| Operating Income | Rs. Cr. | 0.13 | 0.66 |
| PAT | Rs. Cr. | (1.47) | (0.06) |
| PAT Margin | (%) | (1152.49) | (9.38) |
| Total Debt/Tangible Net Worth | Times | 1.81 | 1.12 |
| PBDIT/Interest | Times | (120.75) | (75.10) |
| Status of non-cooperation with previous CRA (if applicable) |
| None |
| Any other information |
| None |
| Applicable Criteria |
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• 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 |
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