Press Release NHS INDUSTRIES July 10, 2023 Rating Reaffirmed and Issuer not co-operating

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	13.50	ACUITE D | Reaffirmed | Issuer not co-operating*	-
Total Outstanding Quantum (Rs. Cr)	13.50	-	-

Rating Rationale

­Acuité has reaffirmed its long term rating of ‘ACUITE D' (read as ACUITE D)’ on the Rs 13.50 crore bank facilities of NHS Industries. The rating is now an indicative rating and is based on the best available information.

About the Company

­NHS Industries (NHSI) was established in 2015 by Mr. N. S. Bhargav Reddy, Proprietor. It is into manufacturing of High-Density Polyethylene (HDPE)/Polypropylene (PP) Woven Bags and Fabric, located in Bangalore, Karnataka, India. The firm majorly manufacture bags which is used in Cement, Sugar & Rice Industry. The manufacturing unit is located at KIADB, Kudumalakunte, Gauribidanur, Karnataka. The firm started its operation in November 2016. Installed capacity is 2.8 Million bags per month utilizing at 90 percent at present. . The firm purchases calcium carbonate and Polypropylene from Plasmix Private Ltd and Mangalore Refinery and Petrochemicals Limited. The firm has reputed clientele i.e., ACC Limited, JSW Cement Limited and other customers.

Non-cooperation by the issuer/borrower

­Acuité has 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 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 Acuité to comment upon.

Material Covenants

­None

Liquidity Position

­No information provided by the issuer / available for Acuité to comment upon.

Outlook

­Not Applicable

Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 21 (Actual)	FY 20 (Actual)
Operating Income	Rs. Cr.	23.02	15.14
PAT	Rs. Cr.	(0.92)	(1.06)
PAT Margin	(%)	(4.01)	(6.99)
Total Debt/Tangible Net Worth	Times	48.24	22.35
PBDIT/Interest	Times	1.25	1.26

Status of non-cooperation with previous CRA

Care vide its press release dated 6.7.2022, had rated the company to CARE D; Issuer Not Cooperating. Crisil vide its press release dated 12.8.2022, had rated the company to CRISIL D; Issuer Not Cooperating.

Any other information

Acuité is yet to receive the latest No Default Statement (NDS) from the rated entity, despite repeated requests and follow-ups.

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.

Rating History

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook 18 Apr 2022 Term Loan Long Term 0.82 ACUITE D (Downgraded from ACUITE B- | Stable) Term Loan Long Term 0.11 ACUITE D (Downgraded from ACUITE B- | Stable) Working Capital Demand Loan Long Term 2.00 ACUITE D (Downgraded from ACUITE B- | Stable) Term Loan Long Term 0.40 ACUITE D (Downgraded from ACUITE B- | Stable) Proposed Bank Facility Long Term 2.08 ACUITE D (Downgraded from ACUITE B- | Stable) Term Loan Long Term 6.59 ACUITE D (Downgraded from ACUITE B- | Stable) Cash Credit Long Term 1.50 ACUITE D (Downgraded from ACUITE B- | Stable) 25 Jan 2021 Cash Credit Long Term 1.50 ACUITE B- | Stable (Upgraded from ACUITE D) Proposed Bank Facility Long Term 2.08 ACUITE B- | Stable (Upgraded from ACUITE D) Term Loan Long Term 0.11 ACUITE B- | Stable (Upgraded from ACUITE D) Term Loan Long Term 0.40 ACUITE B- | Stable (Upgraded from ACUITE D) Working Capital Demand Loan Long Term 2.00 ACUITE B- | Stable (Upgraded from ACUITE D) Term Loan Long Term 6.59 ACUITE B- | Stable (Upgraded from ACUITE D) Term Loan Long Term 0.82 ACUITE B- | Stable (Upgraded from ACUITE D) 20 Feb 2020 Proposed Cash Credit Long Term 2.00 ACUITE D (Issuer not co-operating*) Proposed Long Term Loan Long Term 9.93 ACUITE D (Issuer not co-operating*) Proposed Working Capital Demand Loan Long Term 1.57 ACUITE D (Issuer not co-operating*)

­

Annexure - Details of instruments rated

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum (Rs. Cr.) Complexity Level Rating Canara Bank Not Applicable Cash Credit Not Applicable Not Applicable Not Applicable 1.50 Simple ACUITE D | Reaffirmed | Issuer not co-operating* Not Applicable Not Applicable Proposed Long Term Bank Facility Not Applicable Not Applicable Not Applicable 2.08 Simple ACUITE D | Reaffirmed | Issuer not co-operating* Canara Bank Not Applicable Term Loan Not available Not available Not available 0.11 Simple ACUITE D | Reaffirmed | Issuer not co-operating* Canara Bank Not Applicable Term Loan Not available Not available Not available 6.59 Simple ACUITE D | Reaffirmed | Issuer not co-operating* Canara Bank Not Applicable Term Loan Not available Not available Not available 0.82 Simple ACUITE D | Reaffirmed | Issuer not co-operating* Canara Bank Not Applicable Term Loan Not available Not available Not available 0.40 Simple ACUITE D | Reaffirmed | Issuer not co-operating* Canara Bank Not Applicable Working Capital Demand Loan (WCDL) Not available Not available Not available 2.00 Simple ACUITE D | Reaffirmed | Issuer not co-operating*

Contacts

Analytical	Rating Desk
Aditya Gupta Vice President-Rating Operations Tel: 022-49294041 aditya.gupta@acuite.in Suman Paul Analyst-Rating Operations Tel: 022-49294065 suman.paul@acuite.in	Varsha Bist Senior Manager-Rating Operations Tel: 022-49294011 rating.desk@acuite.in

About Acuité Ratings & Research

Acuité is a full-service Credit Rating Agency registered with the Securities & Exchange Board of India (SEBI). The company received RBI Accreditation as an External Credit Assessment Institution (ECAI) for Bank Loan Ratings under BASEL-II norms in the year 2012. Acuité has assigned ratings to various securities, debt instruments and bank facilities of entities spread across the country and across a wide cross section of industries. It has its Registered and Head Office in Kanjurmarg, Mumbai. Disclaimer: An Acuité rating does not constitute an audit of the rated entity and should not be treated as a recommendation or opinion that is intended to substitute for a financial adviser's or investor's independent assessment of whether to buy, sell or hold any security. Ratings assigned by Acuité are based on the data and information provided by the issuer and obtained from other reliable sources. Although reasonable care has been taken to ensure that the data and information is true, Acuité, in particular, makes no representation or warranty, expressed or implied with respect to the adequacy, accuracy or completeness of the information relied upon. Acuité is not responsible for any errors or omissions and especially states that it has no financial liability whatsoever for any direct, indirect or consequential loss of any kind, arising from the use of its ratings. Ratings assigned by Acuité are subject to a process of surveillance which may lead to a revision in ratings as and when the circumstances so warrant. Please visit our website (www.acuite.in) for the latest information on any instrument rated by Acuité.