PR

Press Release
PROMOTEN
May 10, 2023
Rating Downgraded and Issuer not co-operating

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	25.00	ACUITE BB+ \| Downgraded \| Issuer not co-operating*	-
Total Outstanding Quantum (Rs. Cr)	25.00	-	-

Rating Rationale

Acuite has downgraded its long term rating to 'ACUITE BB+' (read as ACUITE double B Plus) from 'ACUITE BBB-' (read as ACUITE Triple B Minus) on th Rs.25.00 Cr bank facilities of Promoten.

The rating is now an indicative rating as the issuer is not cooperaing, and it is based on best available information. The rating has been downgraded on account of information risk.

About the Company

Kerala based Promoten was established in 2017 as a partnership firm and started its operations in 2019. The firm is an authorized distributor of Jindal Steel and Power Limited (JSPL) - TMT bars products in Kerala. The partners of the firm are Mr. Manoj Prabhu and Mrs. Rajasree Prabhu.

About the Group

Kerala based, Prabhu Group (PG) comprises of Prabhu Steels (PS), Vitson Steel Corp Private Limited (VSCPL), Veeyem Distributors Private Limited (VDPL), and Promoten. PG is promoted by Prabhu Family since 1996. The group is the authorized distributor of steel products for TATA Steel Limited and JSW Steel Limited and Jindal Steel and Power Limited (JSPL) in multiple regions across Kerala.

Vitson Steel Corp Private Limited
Kerala based, Vitson Steel Corp Private Limited (VSCPL) was incorporated in 2012 as a private limited company. The entity is the authorized distributor of the JSW Steels Limited products such as JSW Neo Steel TMT Bars in Central & South Kerala. The directors of the company are Mr. Ramesh Prabhu and Mrs. Rajasree Prabhu.

Veeyem Distributors Private Limited
Kerala based, Veeyem Distributors Private Limited (VDPL) was incorporated in 2016 as a private limited company. The entity is the authorized distributor of JSW Steels Limited products such as JSW Neo Steel TMT Bars in North Kerala. The directors of the company are Mr. Manoj Prabhu, Mr. Ramesh Prabhu, and Mrs. Rajasree Prabhu.

Promoten
Kerala based Promoten was established in 2017 as a partnership firm and started its operations in 2019. The firm is an authorized distributor of Jindal Steel and Power Limited (JSPL)- TMT bars products in Kerala. The partners of the firm are Mr. Manoj Prabhu and Mrs. Rajasree Prabhu.

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 an 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 has 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.a

Rating Sensitivities

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

Material Covenants

None

Liquidity Position

"No information provided by the issuer / available for Acuite 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.	642.10	711.31
PAT	Rs. Cr.	7.86	6.25
PAT Margin	(%)	1.22	0.88
Total Debt/Tangible Net Worth	Times	1.51	1.61
PBDIT/Interest	Times	2.21	1.73

Status of non-cooperation with previous CRA

None

Any other information

Acuite is yet to receive the latest No Default Statement from the rated entity despite repeated requests and followups.

Applicable Criteria

• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm
• Complexity Level Of Financial Instruments: https://www.acuite.in/view-rating-criteria-55.htm
• Consolidation Of Companies: https://www.acuite.in/view-rating-criteria-60.htm
• Default Recognition: https://www.acuite.in/view-rating-criteria-52.htm
• Trading Entitie: https://www.acuite.in/view-rating-criteria-61.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
15 Feb 2022	Cash Credit	Long Term	25.00	ACUITE BBB- \| Stable (Upgraded from ACUITE BB )
28 Oct 2021	Cash Credit	Long Term	25.00	ACUITE BB ( Issuer not co-operating*)
21 Sep 2020	Cash Credit	Long Term	25.00	ACUITE BB \| Stable (Assigned)

Annexure - Details of instruments rated

Lender’s Name	ISIN	Facilities	Date Of Issuance	Coupon Rate	Maturity Date	Quantum (Rs. Cr.)	Complexity Level	Rating
State Bank of India	Not Applicable	Cash Credit	Not Applicable	Not Applicable	Not Applicable	25.00	Simple	ACUITE BB+ \| Downgraded \| Issuer not co-operating*

Contacts

Analytical	Rating Desk
Aditya Gupta Vice President-Rating Operations Tel: 022-49294041 aditya.gupta@acuite.in Katta Akhil Analyst-Rating Operations Tel: 022-49294065 akhil.katta@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.