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Product | Quantum (Rs. Cr) | Long Term Rating | Short Term Rating |
Fixed Deposits (FD) | 180.48 | ACUITE BBB | Reaffirmed & Withdrawn | - |
Total Outstanding | 0.00 | - | - |
Total Withdrawn | 180.48 | - | - |
Rating Rationale |
Acuite has reaffirmed and withdrawn its long-term rating of 'ACUITE BBB' (read as ACUITE triple B) on the Rs.180.48 crore Fixed Deposits of Mukand Limited (ML). The rating was put on "Notice of Withdrawal" in January 2024 and is now being withdrawn in line with Acuité’s policy on withdrawal of ratings as applicable to the respective facilities. |
About the Company |
Incorporated in 1937, Mukand Limited (ML) was acquired by the present promoter family, Mr. Prakash Vasantlal Mehta, Mr. Niraj Ramkrishna Bajaj, Mrs. Bharti Ramgandhi Mr. Sankaran Radhakrishnan, Mr. Arvind Madhav Kulkarni and Mr. Nirav Nayan Bajaj. The Company then operated rerolling mills and a foundry in Lahore (British Indian Territory) and at Reay Road in then Bombay, respectively. ML is a multi-division, multi-product conglomerate involved in the manufacture of specialty steel long products and industrial machinery. Mukand Limited is located in Mumbai (Maharashtra) with manufacturing facilities located in Thane, Maharashtra (for stainless steel) and Hospet, Karnataka (for alloy steel). ML along with its subsidiaries and associate companies is engaged in the manufacturing of special alloy steel/ stainless steel billets, bars, rods, wire rods and bright bars. The Group is also in the business of design, manufacture, assembly and commissioning of industrial machinery, heavy duty cranes, bulk material handling equipment and process plant equipment for ferrous and non-ferrous industries. |
About the Group |
Mukand Limited group includes its subsidiaries, joint ventures and associates. Along with manufacturing of special alloy steel/ stainless steel billets, bars, rods, wire rods and bright bars, the Group is also in the business of design, manufacture, assembly and commissioning of industrial machinery, heavy duty cranes, bulk material handling equipment and process plant equipment for ferrous and non-ferrous industries. |
Unsupported Rating |
Not Applicable |
Analytical Approach |
Extent of Consolidation |
•Full Consolidation |
Rationale for Consolidation or Parent / Group / Govt. Support |
Acuité has considered the consolidated business and financial risk profile of Mukand Limited along with its subsidiaries. The list of subsidiaries and associates that have been considered for consolidation has been attached in the annexures. The entities are together referred to as 'The Group'. |
Key Rating Drivers |
Strengths |
Strong parentage; long-standing presence in the steel market |
Weaknesses |
Intensive Working Capital Management |
ESG Factors Relevant for Rating |
Manufacture of metals has a substantial environmental impact. The production of basic metals is extremely power-intensive. Most steel is still produced with blast furnaces, releasing large amounts of carbon dioxide, nitrogen oxide, and particulate matters into the air. On the social front, occupation and workforce health & safety management are of primary importance to this industry given the dangerous nature of operations. Furthermore, factors such as ethical business practices, management compensation and board administration hold primary importance within this industry. |
Rating Sensitivities |
Not Applicable |
Liquidity Position |
Adequate |
The liquidity position of the group is adequate marked by sufficient Net Cash Accruals (NCA) against maturing repayment obligations. The group generated NCA worth Rs. 152.42 crores in FY2024 against no significant repayment obligations. The operations of the Group are working capital intensive marked by Gross Current Asset days of 166 days as on March 31, 2024. The average bank limit utilization stood at 79.50 percent for six months ended May 2024. The current ratio stood at 3.48 times on March 31, 2024 as against 2.72 times on March 31, 2023. The group has an unencumbered cash and bank balance of Rs. ~51.00 crore on March 31, 2024. |
Outlook: |
Not Applicable |
Other Factors affecting Rating |
None |
Particulars | Unit | FY 24 (Actual) | FY 23 (Actual) |
Operating Income | Rs. Cr. | 5174.81 | 5567.60 |
PAT | Rs. Cr. | 102.70 | 171.78 |
PAT Margin | (%) | 1.98 | 3.09 |
Total Debt/Tangible Net Worth | Times | 1.67 | 1.83 |
PBDIT/Interest | Times | 2.34 | 2.27 |
Status of non-cooperation with previous CRA (if applicable) |
Not Applicable |
Any Other Information |
None |
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 • Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.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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*Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support) | ||||||||||
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Contacts |
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About Acuité Ratings & Research |
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