Press Release March 24, 2025 SUSTAINABLE SPINNING AND COMMODITIES PRIVATE LIMITED Rating Downgraded

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	33.80	ACUITE C | Downgraded	-
Bank Loan Ratings	65.70	ACUITE D | Downgraded	-
Bank Loan Ratings	1.50	-	ACUITE A4 | Downgraded
Bank Loan Ratings	3.00	-	ACUITE D | Downgraded
Total Outstanding	104.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuite has downgraded its long-term rating to 'ACUITE D' (read as ACUITE D) from 'ACUITE BBB-' (read as ACUITE triple B minus) and its short-term rating to 'ACUITE D' (read as ACUITE D) from 'ACUITE A3' (read as ACUITE A three) on Rs.68.70 Cr. bank facilities of Sustainable Spinning and Commodities Private Limited (SSPL). Further, Acuite has downgraded its long-term rating to 'ACUITE C' (read as ACUITE C) from 'ACUITE BBB-' (read as ACUITE triple B minus) and its short-term rating to 'ACUITE A4' (read as ACUITE A four) from 'ACUITE A3' (read as ACUITE A three) on Rs. 35.30 Cr. bank facilities of Sustainable Spinning and Commodities Private Limited (SSPL). Rationale for Downgrade The rating downgrade is based on delays reported in servicing of debt obligations as per the credit bureau information report (CRIF) in recent past.

About the Company

Gujarat-based, Sustainable Spinning and Commodities Private Limited (SSPL) was incorporated in 2012. At present, the directors are Mr. Mohamedhasanain Husenali Narsinh, Mrs. Minajbanu Husenali Narsinh, Mr. Husenali Yusufali Narsinh and Mrs. Fatema Mohmadhasnein Narsinh. The company is engaged in the manufacturing of cotton yarns with an installed capacity of 40,000 spindles per annum (PA). The utilized capacity varies between 22-25 MT per day due to the production of various counts of yarns, i.e., 30, 34, 36, and 40. During the year, the company also added 20s count of yarns. It procures 50 percent of cotton bales from its group company Milan Ginning Pressing Private Limited (MGPL) and the rest is procured from other local ginning players in Gujarat. The company exports ~90 percent of its production to countries including Europe, Bangladesh, to name a few. Major exports are made from their sister concern- Milan Ginning Pressing Private Limited (MGPL). The manufacturing facility is in Gujarat.

About the Group

Gujarat-based, Milan group was established in 1995 by Mr. Husenali Yusufali Narsinh. The group consists of 3 companies, namely Sustainable Spinning and Commodities Private Limited (SSPL), Milan Ginning Pressing Private Limited (MGPL) and K R Solvent LLP (KRS). The group is engaged in manufacturing and trading of cotton yarn, cotton bales, cotton linter, cottonseed meal, cottonseed hulk and cotton seed oil.

Unsupported Rating

­Not Applicable

Analytical Approach

Extent of Consolidation

•Full Consolidation

Rationale for Consolidation or Parent / Group / Govt. Support

Acuité has consolidated the business and financial risk profiles of SSPL, MGPL and KRS together, known as the ‘Milan Group’ (MG), to arrive at this rating. The consolidation is on account of common management, similar line of business, high level of integration and strong operational linkages.

Key Rating Drivers

Strengths

Experienced management and established track record of operations The promoters have over three decades of experience in the textile industry, coupling with a long track record of operation has enabled the company to forge healthy relationships with the stakeholders. Over the years, the management has been able to establish long-term relations with reputed players in the textile industry. The products are exported to various countries like Bangladesh, China, Europe, Egypt catering to international clients such as H&M, Marks & Spencer and Nike, and is one of the leading ginning and pressing companies of India. Acuité believes that the experience of the management in the industry is likely to favourably impact the business risk profile of the company over the near to medium term.

Weaknesses

Delays in servicing debt obligations There have been delays reported in servicing debt obligation as per the credit bureau information report (CRIF) of Sustainable Spinning and Commodities Private Limited (SSPL). The account has been classified as SMA-0 as of December 2024 in the Long-Term Loan facility. Along with it in the month of October 2024 the GECL Loan account was classified as SMA0 and Cash Credit & Term Loan Account were classified as SMA1. Highly competitive industry with Susceptibility of profitability to fluctuations in raw material prices The group operates in a highly competitive textile industry with several organized and unorganized players which can limit the bargaining power. The group is subjected to the risk emanating from adverse movements in cotton prices in the domestic and international markets. Acuité believes that the group’s ability to pass on the increase in cotton prices to the end customers should be critical towards maintaining its credit risk profile. Fluctuating prices on account of global demand - supply mismatches may result in downward pressure on the group’s margins over the near to medium term.

Rating Sensitivities

­Regular servicing of debt obligations

Liquidity Position

Stretched

The liquidity position of the group is marked stretched due to instance of delay in servicing of debt obligation as of December 2024 in the Long-Term Loan facility. Along with it in the month of October 2024 delays were observed in GECL Loan, in Cash Credit & Long-Term Loan.

Outlook: Not Applicable

­

Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 24 (Provisional)	FY 23 (Actual)
Operating Income	Rs. Cr.	920.01	657.85
PAT	Rs. Cr.	10.33	7.20
PAT Margin	(%)	1.12	1.09
Total Debt/Tangible Net Worth	Times	1.00	1.08
PBDIT/Interest	Times	3.28	2.93

Status of non-cooperation with previous CRA (if applicable)

­Not Applicable

Interaction with Audit Committee anytime in the last 12 months (applicable for rated-listed / proposed to be listed debt securities being reviewed by Acuite)

Not applicable

Any Other Information

­None

Applicable Criteria

• Application Of Financial Ratios And Adjustments: https://www.acuite.in/view-rating-criteria-53.htm • Consolidation Of Companies: https://www.acuite.in/view-rating-criteria-60.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 13 Aug 2024 Bank Guarantee/Letter of Guarantee Short Term 3.00 ACUITE A3 (Reaffirmed) Bank Guarantee/Letter of Guarantee Short Term 1.50 ACUITE A3 (Reaffirmed) Term Loan Long Term 5.91 ACUITE BBB- | Stable (Reaffirmed) Cash Credit Long Term 8.00 ACUITE BBB- | Stable (Reaffirmed) Cash Credit Long Term 4.00 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 12.65 ACUITE BBB- | Stable (Reaffirmed) Cash Credit Long Term 4.00 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 13.51 ACUITE BBB- | Stable (Reaffirmed) Proposed Long Term Bank Facility Long Term 10.87 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 0.44 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 12.83 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 2.28 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 4.73 ACUITE BBB- | Stable (Reaffirmed) Working Capital Term Loan Long Term 0.27 ACUITE BBB- | Stable (Reaffirmed) Working Capital Term Loan Long Term 7.32 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 2.36 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 0.13 ACUITE BBB- | Stable (Reaffirmed) Working Capital Term Loan Long Term 3.79 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 2.36 ACUITE BBB- | Stable (Reaffirmed) Working Capital Term Loan Long Term 0.25 ACUITE BBB- | Stable (Reaffirmed) Working Capital Term Loan Long Term 3.80 ACUITE BBB- | Stable (Reaffirmed) 16 May 2023 Bank Guarantee/Letter of Guarantee Short Term 3.00 ACUITE A3 (Reaffirmed) Bank Guarantee/Letter of Guarantee Short Term 1.50 ACUITE A3 (Reaffirmed) Cash Credit Long Term 8.00 ACUITE BBB- | Stable (Reaffirmed) Cash Credit Long Term 4.00 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 12.65 ACUITE BBB- | Stable (Reaffirmed) Cash Credit Long Term 4.00 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 13.51 ACUITE BBB- | Stable (Reaffirmed) Proposed Long Term Bank Facility Long Term 10.87 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 0.44 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 12.83 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 2.28 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 4.73 ACUITE BBB- | Stable (Reaffirmed) Working Capital Term Loan Long Term 0.27 ACUITE BBB- | Stable (Reaffirmed) Working Capital Term Loan Long Term 7.32 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 2.36 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 0.13 ACUITE BBB- | Stable (Reaffirmed) Working Capital Term Loan Long Term 3.79 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 2.36 ACUITE BBB- | Stable (Reaffirmed) Working Capital Term Loan Long Term 0.25 ACUITE BBB- | Stable (Reaffirmed) Working Capital Term Loan Long Term 3.80 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 5.91 ACUITE BBB- | Stable (Reaffirmed) 15 Feb 2022 Bank Guarantee/Letter of Guarantee Short Term 3.00 ACUITE A3 (Reaffirmed) Bank Guarantee/Letter of Guarantee Short Term 1.50 ACUITE A3 (Reaffirmed) Cash Credit Long Term 8.00 ACUITE BBB- | Stable (Reaffirmed) Cash Credit Long Term 4.00 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 12.65 ACUITE BBB- | Stable (Reaffirmed) Cash Credit Long Term 4.00 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 13.51 ACUITE BBB- | Stable (Reaffirmed) Proposed Long Term Bank Facility Long Term 10.87 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 0.44 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 12.83 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 2.28 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 4.73 ACUITE BBB- | Stable (Reaffirmed) Working Capital Term Loan Long Term 0.27 ACUITE BBB- | Stable (Reaffirmed) Working Capital Term Loan Long Term 7.32 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 2.36 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 0.13 ACUITE BBB- | Stable (Reaffirmed) Working Capital Term Loan Long Term 3.79 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 2.36 ACUITE BBB- | Stable (Reaffirmed) Working Capital Term Loan Long Term 0.25 ACUITE BBB- | Stable (Reaffirmed) Working Capital Term Loan Long Term 3.80 ACUITE BBB- | Stable (Reaffirmed) Term Loan Long Term 5.91 ACUITE BBB- | Stable (Reaffirmed)

­

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 avl. / Not appl. Bank Guarantee/Letter of Guarantee Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 3.00 Simple ACUITE D | Downgraded ( from ACUITE A3 ) Bank of Baroda Not avl. / Not appl. Bank Guarantee/Letter of Guarantee Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 1.50 Simple ACUITE A4 | Downgraded ( from ACUITE A3 ) State Bank of India Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 8.00 Simple ACUITE D | Downgraded ( from ACUITE BBB- ) Bank of Baroda Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 4.00 Simple ACUITE C | Downgraded ( from ACUITE BBB- ) Indian Bank Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 4.00 Simple ACUITE D | Downgraded ( from ACUITE BBB- ) Not Applicable Not avl. / Not appl. Proposed Long Term Bank Facility Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 10.87 Simple ACUITE C | Downgraded ( from ACUITE BBB- ) State Bank of India Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 30 Jun 2022 0.44 Simple ACUITE D | Downgraded ( from ACUITE BBB- ) State Bank of India Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 30 Sep 2024 12.83 Simple ACUITE D | Downgraded ( from ACUITE BBB- ) State Bank of India Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 30 Jun 2030 2.28 Simple ACUITE D | Downgraded ( from ACUITE BBB- ) State Bank of India Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 31 Mar 2032 4.73 Simple ACUITE D | Downgraded ( from ACUITE BBB- ) Indian Bank Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 31 Mar 2027 13.51 Simple ACUITE D | Downgraded ( from ACUITE BBB- ) Bank of Baroda Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 31 Mar 2027 12.65 Simple ACUITE C | Downgraded ( from ACUITE BBB- ) Bank of Baroda Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 30 Sep 2021 2.36 Simple ACUITE C | Downgraded ( from ACUITE BBB- ) Bank of Baroda Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 30 Sep 2023 0.13 Simple ACUITE C | Downgraded ( from ACUITE BBB- ) Indian Bank Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 31 Mar 2032 2.36 Simple ACUITE D | Downgraded ( from ACUITE BBB- ) State Bank of India Not avl. / Not appl. Term Loan Not avl. / Not appl. Not avl. / Not appl. 31 Mar 2037 5.91 Simple ACUITE D | Downgraded ( from ACUITE BBB- ) Indian Bank Not avl. / Not appl. Working Capital Term Loan Not avl. / Not appl. Not avl. / Not appl. 31 May 2023 0.25 Simple ACUITE D | Downgraded ( from ACUITE BBB- ) Indian Bank Not avl. / Not appl. Working Capital Term Loan Not avl. / Not appl. Not avl. / Not appl. 30 Apr 2025 3.80 Simple ACUITE D | Downgraded ( from ACUITE BBB- ) Bank of Baroda Not avl. / Not appl. Working Capital Term Loan Not avl. / Not appl. Not avl. / Not appl. 31 Mar 2025 3.79 Simple ACUITE C | Downgraded ( from ACUITE BBB- ) State Bank of India Not avl. / Not appl. Working Capital Term Loan Not avl. / Not appl. Not avl. / Not appl. 31 May 2020 0.27 Simple ACUITE D | Downgraded ( from ACUITE BBB- ) State Bank of India Not avl. / Not appl. Working Capital Term Loan Not avl. / Not appl. Not avl. / Not appl. 30 Apr 2026 7.32 Simple ACUITE D | Downgraded ( from ACUITE BBB- )

*Annexure 2 - List of Entities (applicable for Consolidation or Parent / Group / Govt. Support)

Sr No. Company Name 1 Sustainable Spinning and Commodities Private Limited 2 Milan Ginning Pressing Private Limited 3 K R Solvent LLP ­

Contacts

Mohit Jain Senior Vice President - Rating Operations Patel Sneh Associate Analyst - Rating Operations	Contact details exclusively for investors and lenders Mob: +91 8591310146 Email ID: analyticalsupport@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. Note: None of the Directors on the Board of Acuité Ratings & Research Limited are members of any rating committee and therefore do not participate in discussions regarding the rating of any entity.