Product Quantum (Rs. Cr) Long Term Rating Short Term Rating
Bank Loan Ratings 73.00 ACUITE BB | Stable | Reaffirmed -
Total Outstanding 73.00 - -
 
Rating Rationale

­Acuité has reaffirmed its long-term rating of 'ACUITE BB' (read as ACUITE double B) on the Rs.73.00 Cr. bank facilities of ­Niine Private Limited (NPL). The outlook is 'Stable'.

Rationale for rating
The rating reaffirmed reflects that in Q4FY2024, the company has shown an improvement which have been supported by reducing the expenses, working capital operations and constant promoter's support to lift the overall business performance. However, the above mentioned strengths are partly offset by below average financial risk profile and susceptibility of profitability to fluctuations in input prices and operational expenses. Further, it also considers the impact in scale of operation in current fiscal year.

About the Company
­Niine Private Limited (NPL; erstwhile M/s Shudh Plus Hygiene Products incorporated in 2016), incorporated on Aug 11, 2021, based in Gorakhpur (UP). The company is promoted by Mr. Amar Tulsiyan. The company is engaged into manufacturing of feminine hygiene (Sanitary Napkins) and baby care (Baby Diapers) products. The manufacturing facility at Gorakhpur consists of 4 assembly lines of which 3 lines are dedicated towards feminine hygiene products.
 
Unsupported Rating
Not Applicable
 
Analytical Approach
­Acuité has considered the standalone financial and business risk profile of ­Niine Private Limited to arrive at this rating.
 
Key Rating Drivers

Strengths
­­Experienced management
NPL was incorporated in 2016 as Shudh Plus Hygiene Products and is converted to private limited company in 2021. The comapny is engaged in manufacturing of feminine hygiene (Sanitary Napkins) and baby care (Baby Diapers) products. It has an established operational track record of more than 6 years. It is promoted by Mr. Amar Tulsiyan. The promoters are being supported by its team of experienced professionals in managing day to day operations of NPL. The extensive experience of the promoters has enabled NPL to establish a healthy relationship with its customers and suppliers.

Working capital operations
The working capital operations of the company is moderate marked by GCA days of 95 days in FY24 (prov.) against 181 days in FY23. There is an improvement in the GCA days due to the inventory days of the company which stood at 22 days in FY24 (prov.) against 48 days in FY23, debtors days of the company stood at 42 days in FY24 (prov.) against 65 days in FY23. However, creditors days stood at 34 days in FY24 (prov.) against 27 days in FY23. In addition, the company has reviewed the performance of several channel partners to eliminate the non-performing distributors. The new distributor’s on boarded were majorly on advance basis (50% advance) offering upfront cash and the balance on credit.

Weaknesses
­Financial Risk Profile
The financial risk profile of the company is below average marked by net-worth of Rs. 6.03 Crore in FY24 (prov.) against Rs. -53.52 Crore in FY23. There is an improvement in net-worth because company concluded a bridge equity round of INR 8.5 Crore from HNIs in May 2023 and in January 2024, the company converted promoter loans into equity (principal + accrued interest).In additional, in April 2024, the company raised INR 10 Crore funding from HNI investor at a pre-money valuation of INR 434 Crore The total debt of the company stood at Rs. 60.70 Crore in FY24 (prov.) which consists of long term debt of Rs. 17.43 Crores, Short term debt of Rs. 38.98 Crore and CPLTD of Rs. 4.29 Crore. Further, the debt-equity ratio of the company stood at 10.06 times in FY24 (prov.) against -3.10 times in FY23. The interest coverage ratio of the company stood at -5.77 times in FY24 (prov.) against -5.26 times in FY23. The DSCR of the company stood at -2.26 times in FY24 (prov.) against -3.37 times in FY23 and TOL/TNW ratio stood at 18.55 times in FY24 (prov.) against -4.01 times in FY23.

Susceptible to profitability to changes in input prices
The raw material procured by the company is fabric which is manufactured using cotton and polyethylene, the prices of which are fluctuating in nature on account of seasonality and low availability creates an imbalance in supply and demands. Thus, the company's margins are exposed to the high volatility in prices.
Rating Sensitivities
  • ­Improvement in working capital operations
  • Stable growth in revenue and profitability
 
Liquidity Position
Poor
­The liquidity profile of the company is poor. The net cash accruals of company stood negative at Rs. 45.08 Cr. in FY 24 (prov.) against the CPLTD of Rs. 10.32 Cr. The company has cash & bank position of Rs. 0.09 Cr. and current ratio stood at 0.64 times for FY 24 (prov.). Company has made Rs. 5.56 Cr investment in fixed deposits which is entirely unencumbered. The average fund based bank limit utilization is at 69.52% for the 9 months’ period ending May 2024.
 
Outlook: Stable
­Acuité believes that NPL will maintain a ‘Stable’ outlook and will continue to derive benefit over the medium term due to its extensive experience of promoters. The outlook may be revised to ‘Positive’, if the company demonstrates substantial and sustained growth in its revenues from the current level while becoming profitable while improving or sustaining the working capital operations. Conversely, the outlook may be revised to ‘Negative’ if the company generates lower than anticipated revenue and incurring losses resulting into stretched liquidity position and higher dependence on debt.
 
Other Factors affecting Rating
­None
 

Particulars Unit FY 24 (Provisional) FY 23 (Actual)
Operating Income Rs. Cr. 211.09 212.11
PAT Rs. Cr. (47.52) (128.64)
PAT Margin (%) (22.51) (60.65)
Total Debt/Tangible Net Worth Times 10.06 (3.10)
PBDIT/Interest Times (5.77) (5.26)
Status of non-cooperation with previous CRA (if applicable)
Not Applicable
 
Any other information
­None
 
Applicable Criteria
• 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.
 

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook
30 May 2023 Cash Credit Long Term 33.00 ACUITE BB | Stable (Assigned)
Term Loan Long Term 21.20 ACUITE BB | Stable (Assigned)
Proposed Long Term Bank Facility Long Term 18.80 ACUITE BB | Stable (Assigned)
­

Lender’s Name ISIN Facilities Date Of Issuance Coupon Rate Maturity Date Quantum
(Rs. Cr.)		 Complexity Level Rating
HDFC Bank Ltd Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 10.00 Simple ACUITE BB | Stable | Reaffirmed
Not Applicable Not avl. / Not appl. Proposed Long Term Bank Facility Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 46.00 Simple ACUITE BB | Stable | Reaffirmed
Union Bank of India Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 31 Mar 2031 5.00 Simple ACUITE BB | Stable | Reaffirmed
HDFC Bank Ltd Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 10 Sep 2026 12.00 Simple ACUITE BB | Stable | Reaffirmed

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