Press Release June 07, 2024 SALONA COTSPIN LIMITED Rating Downgraded and Issuer not co-operating

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	72.00	ACUITE C | Downgraded | Issuer not co-operating*	-
Bank Loan Ratings	78.00	-	ACUITE A4 | Downgraded | Issuer not co-operating*
Total Outstanding	150.00	-	-

Rating Rationale

Acuité has downgraded the long-term rating to ‘ACUITE C’ (read as ACUITE C) from ‘ACUITE BB+’ (read as ACUITE double B plus) and short-term rating to 'ACUITE A4' (read as ACUITE A four) from 'ACUITE A4+' (read as ACUITE A Four plus) on the Rs.150.00 Cr. bank facilities of Salona Cotspin Limited (SCL). The rating continues to be flagged as “Issuer Not Cooperating” and is based on the best available information. The downgrade is based on delays being reflected in the Credit Information Bureau Report.

About the Company

­Salona Cotspin Limited (SCL), based in Coimbatore, was incorporated in 1996. The company is led by Mr. Shyamlal Agarwala (Managing Director) and Mr. Manoj Kumar Jhajharia (Joint Managing Director). SCL is engaged in the manufacturing and selling of cotton yarn, knitted fabrics and garments at Erode (Tamil Nadu). The company caters to both domestic and international markets. The company has installed capacity of 24,336 spindles and also owns windmills and solar plant for captive power generation and consumption, at various location in Tamil Nadu

Unsupported Rating

­Not Applicable

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 non co-operation 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 Sensitivity

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

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 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	722.26	486.91
PAT	Rs. Cr.	6.13	17.57
PAT Margin	(%)	0.85	3.61
Total Debt/Tangible Net Worth	Times	3.22	2.12
PBDIT/Interest	Times	2.00	3.74

Status of non-cooperation with previous CRA

­Not Applicable

Any other information

­None

Applicable Criteria

• Rating Process and Timeline: https://www.acuite.in/view-rating-criteria-67.htm • Manufacturing Entities: https://www.acuite.in/view-rating-criteria-59.htm • Trading Entities: https://www.acuite.in/view-rating-criteria-61.htm • Default Recognition: https://www.acuite.in/view-rating-criteria-52.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

Rating History

Date Name of Instruments/Facilities Term Amount (Rs. Cr) Rating/Outlook 13 Dec 2023 Bills Discounting Short Term 50.00 ACUITE A4+ (Downgraded & Issuer not co-operating* from ACUITE A3+) Bills Discounting Short Term 5.00 ACUITE A4+ (Downgraded & Issuer not co-operating* from ACUITE A3+) Bills Discounting Short Term 12.00 ACUITE A4+ (Downgraded & Issuer not co-operating* from ACUITE A3+) Bills Discounting Short Term 3.00 ACUITE A4+ (Downgraded & Issuer not co-operating* from ACUITE A3+) Cash Credit Long Term 3.56 ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB | Stable) Cash Credit Long Term 20.00 ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB | Stable) Cash Credit Long Term 0.50 ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB | Stable) Cash Credit Long Term 14.00 ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB | Stable) Proposed Long Term Bank Facility Long Term 3.43 ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB | Stable) Proposed Short Term Bank Facility Short Term 8.00 ACUITE A4+ (Downgraded & Issuer not co-operating* from ACUITE A3+) Secured Overdraft Long Term 7.50 ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB | Stable) Term Loan Long Term 4.03 ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB | Stable) Term Loan Long Term 4.20 ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB | Stable) Term Loan Long Term 5.73 ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB | Stable) Working Capital Term Loan Long Term 0.23 ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB | Stable) Working Capital Term Loan Long Term 0.79 ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB | Stable) Working Capital Term Loan Long Term 0.91 ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB | Stable) Working Capital Term Loan Long Term 3.77 ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB | Stable) Working Capital Term Loan Long Term 2.76 ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB | Stable) Working Capital Term Loan Long Term 0.59 ACUITE BB+ (Downgraded & Issuer not co-operating* from ACUITE BBB | Stable) 19 Oct 2022 Bills Discounting Short Term 50.00 ACUITE A3+ (Reaffirmed) Bills Discounting Short Term 5.00 ACUITE A3+ (Reaffirmed) Bills Discounting Short Term 12.00 ACUITE A3+ (Reaffirmed) Bills Discounting Short Term 3.00 ACUITE A3+ (Reaffirmed) Cash Credit Long Term 20.00 ACUITE BBB | Stable (Reaffirmed) Cash Credit Long Term 0.50 ACUITE BBB | Stable (Reaffirmed) Cash Credit Long Term 14.00 ACUITE BBB | Stable (Reaffirmed) Cash Credit Long Term 3.56 ACUITE BBB | Stable (Reaffirmed) Proposed Long Term Bank Facility Long Term 3.43 ACUITE BBB | Stable (Reaffirmed) Proposed Short Term Bank Facility Short Term 8.00 ACUITE A3+ (Reaffirmed) Secured Overdraft Long Term 7.50 ACUITE BBB | Stable (Reaffirmed) Term Loan Long Term 5.73 ACUITE BBB | Stable (Reaffirmed) Term Loan Long Term 4.03 ACUITE BBB | Stable (Reaffirmed) Term Loan Long Term 4.20 ACUITE BBB | Stable (Reaffirmed) Working Capital Term Loan Long Term 0.23 ACUITE BBB | Stable (Reaffirmed) Working Capital Term Loan Long Term 0.79 ACUITE BBB | Stable (Reaffirmed) Working Capital Term Loan Long Term 2.76 ACUITE BBB | Stable (Reaffirmed) Working Capital Term Loan Long Term 0.59 ACUITE BBB | Stable (Reaffirmed) Working Capital Term Loan Long Term 0.91 ACUITE BBB | Stable (Reaffirmed) Working Capital Term Loan Long Term 3.77 ACUITE BBB | Stable (Reaffirmed) 22 Jul 2021 Bills Discounting Short Term 5.00 ACUITE A3+ (Upgraded from ACUITE A3) Bills Discounting Short Term 50.00 ACUITE A3+ (Upgraded from ACUITE A3) Bills Discounting Short Term 3.00 ACUITE A3+ (Upgraded from ACUITE A3) Bills Discounting Short Term 12.00 ACUITE A3+ (Upgraded from ACUITE A3) Cash Credit Long Term 0.50 ACUITE BBB | Stable (Upgraded from ACUITE BBB- | Negative) Cash Credit Long Term 20.00 ACUITE BBB | Stable (Upgraded from ACUITE BBB- | Negative) Cash Credit Long Term 3.56 ACUITE BBB | Stable (Upgraded from ACUITE BBB- | Negative) Cash Credit Long Term 14.00 ACUITE BBB | Stable (Upgraded from ACUITE BBB- | Negative) PC/PCFC Short Term 8.00 ACUITE A3+ (Upgraded from ACUITE A3) Proposed Long Term Bank Facility Long Term 3.43 ACUITE BBB | Stable (Assigned) Secured Overdraft Long Term 7.50 ACUITE BBB | Stable (Upgraded from ACUITE BBB- | Negative) Term Loan Long Term 5.73 ACUITE BBB | Stable (Upgraded from ACUITE BBB- | Negative) Term Loan Long Term 4.03 ACUITE BBB | Stable (Upgraded from ACUITE BBB- | Negative) Term Loan Long Term 4.20 ACUITE BBB | Stable (Upgraded from ACUITE BBB- | Negative) Warehouse Receipt Financing Long Term 6.00 ACUITE BBB (Upgraded & Withdrawn) Working Capital Term Loan Long Term 0.59 ACUITE BBB | Stable (Assigned) Working Capital Term Loan Long Term 2.76 ACUITE BBB | Stable (Assigned) Working Capital Term Loan Long Term 0.79 ACUITE BBB | Stable (Assigned) Working Capital Term Loan Long Term 0.23 ACUITE BBB | Stable (Assigned) Working Capital Term Loan Long Term 3.77 ACUITE BBB | Stable (Assigned) Working Capital Term Loan Long Term 0.91 ACUITE BBB | Stable (Assigned)

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Annexure - Details of instruments rated

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. Bills Discounting Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 50.00 Simple ACUITE A4 | Downgraded | Issuer not co-operating* ( from ACUITE A4+ ) CSB Bank Limited Not avl. / Not appl. Bills Discounting Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 5.00 Simple ACUITE A4 | Downgraded | Issuer not co-operating* ( from ACUITE A4+ ) State Bank of India Not avl. / Not appl. Bills Discounting Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 3.00 Simple ACUITE A4 | Downgraded | Issuer not co-operating* ( from ACUITE A4+ ) Union Bank of India Not avl. / Not appl. Bills Discounting Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 12.00 Simple ACUITE A4 | Downgraded | Issuer not co-operating* ( from ACUITE A4+ ) HDFC Bank Ltd Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 20.00 Simple ACUITE C | Downgraded | Issuer not co-operating* ( from ACUITE BB+ ) CSB Bank Limited Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 0.50 Simple ACUITE C | Downgraded | Issuer not co-operating* ( from ACUITE BB+ ) Union Bank of India Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 14.00 Simple ACUITE C | Downgraded | Issuer not co-operating* ( from ACUITE BB+ ) State Bank of India Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 3.56 Simple ACUITE C | Downgraded | Issuer not co-operating* ( from ACUITE BB+ ) Not Applicable Not avl. / Not appl. Proposed Long Term Bank Facility Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 3.43 Simple ACUITE C | Downgraded | Issuer not co-operating* ( from ACUITE BB+ ) Not Applicable Not avl. / Not appl. Proposed Short Term Bank Facility Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 8.00 Simple ACUITE A4 | Downgraded | Issuer not co-operating* ( from ACUITE A4+ ) CSB Bank Limited Not avl. / Not appl. Secured Overdraft Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 7.50 Simple ACUITE C | Downgraded | Issuer not co-operating* ( from ACUITE BB+ ) HDFC Bank Ltd Not avl. / Not appl. Term Loan 16 Jun 2021 Not avl. / Not appl. 15 Mar 2023 4.03 Simple ACUITE C | Downgraded | Issuer not co-operating* ( from ACUITE BB+ ) HDFC Bank Ltd Not avl. / Not appl. Term Loan 16 Jun 2021 Not avl. / Not appl. 15 Mar 2027 5.73 Simple ACUITE C | Downgraded | Issuer not co-operating* ( from ACUITE BB+ ) State Bank of India Not avl. / Not appl. Term Loan 30 Dec 2020 Not avl. / Not appl. 31 Dec 2031 4.20 Simple ACUITE C | Downgraded | Issuer not co-operating* ( from ACUITE BB+ ) State Bank of India Not avl. / Not appl. Working Capital Term Loan 30 Mar 2020 Not avl. / Not appl. 11 Aug 2021 0.23 Simple ACUITE C | Downgraded | Issuer not co-operating* ( from ACUITE BB+ ) State Bank of India Not avl. / Not appl. Working Capital Term Loan 12 Aug 2020 Not avl. / Not appl. 11 Jul 2024 0.79 Simple ACUITE C | Downgraded | Issuer not co-operating* ( from ACUITE BB+ ) HDFC Bank Ltd Not avl. / Not appl. Working Capital Term Loan 16 Jun 2021 Not avl. / Not appl. 15 Jun 2022 0.59 Simple ACUITE C | Downgraded | Issuer not co-operating* ( from ACUITE BB+ ) HDFC Bank Ltd Not avl. / Not appl. Working Capital Term Loan 16 Jun 2021 Not avl. / Not appl. 15 Jun 2024 2.76 Simple ACUITE C | Downgraded | Issuer not co-operating* ( from ACUITE BB+ ) Union Bank of India Not avl. / Not appl. Working Capital Term Loan 12 Nov 2020 Not avl. / Not appl. 11 Apr 2022 0.91 Simple ACUITE C | Downgraded | Issuer not co-operating* ( from ACUITE BB+ ) Union Bank of India Not avl. / Not appl. Working Capital Term Loan 12 Nov 2020 Not avl. / Not appl. 11 Oct 2024 3.77 Simple ACUITE C | Downgraded | Issuer not co-operating* ( from ACUITE BB+ )

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Contacts

Analytical Details	Contact Details
Mohit Jain Senior Vice President - Rating Operations Tel: 022–49294017 mohit.jain@acuite.in Pradeep Singh Manager - Rating Operations Tel: 022-49294065 pradeep.singh@acuite.in	Contact details exclusively for investors and lenders Mob: +91 8591310146 Associate Vice President - 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. Please visit https://www.acuite.in/faqs.htm to refer FAQs on Credit Rating.