Press Release

Press Release

May 11, 2026

USM HEALTHCARE
Rating Downgraded

Product	Quantum (Rs. Cr) (SEBI)	Quantum (Rs. Cr) (Other FSR)	Long Term Rating	Short Term Rating	Regulated By
Bank Loan Ratings	0.00	10.42	ACUITE BB- \| Stable \| Downgraded	-	RBI
Total Outstanding	0.00	10.42	-	-	-
Total Withdrawn	0.00	0.00	-	-	-

Note:- For activities or ratings of instruments falling under the purview of Financial Sector Regulators other than SEBI, the grievance / dispute redressal mechanisms and investor protection mechanisms provided by SEBI shall not be available.

Rating Rationale

Acuité has downgraded the long-term rating to ‘ACUITE BB-’ (read as ACUITE double B minus) from ‘ACUITE BB’ (read as ACUITE double B) on the Rs. 10.42 Cr. bank facilities of USM Healthcare (USM). The outlook is ’Stable’.

Rationale for downgrade
The rating downgrade considers the moderation in profitability of the firm amid stagnant revenue over the past few years. The rating is also constrained on account of the moderate financial risk profile, highly intensive working capital operations, fuelled by high receivable levels. However, the rating draws comfort from the experienced management and established track record of operations of the firm.

About the Company

USM Healthcare (USM) is a partnership firm established in February 2015. The firm is provider of health care services, running a super specialty hospital with 62 beds in Bhopal under the name of 'Siddhanta Red Cross Super- Specialty Hospital'. The hospital offers clinical services, laboratory services, diagnostic services and support services like physiotherapy facilities and ambulance services. The operations of the hospital are managed by Dr. Subodh Varshney, Partner.

Unsupported Rating

Not Applicable

Analytical Approach

Acuité has taken a standalone view of the financial and business risk profile of USM to arrive at the rating.

Key Rating Drivers

Strengths

Long track record of operations supported by experienced team of professionals:
The operation of the hospital is supported by team of professional doctors and medical team. The managing partner, Dr. Subodh Varshney has also been a part of Bhopal memorial and has an experience of over 20 years. The promoters' business experience and experienced team of doctors has resulted in high occupancy of 95 - 100 percent over the past years.

Weaknesses

Intensive working capital operations

The operations of the firm are highly intensive, with high gross current assets (GCA) of 191 days on March 31, 2025. The GCA are driven by the high receivable period of 136 days on March 31, 2025. Since the firm majorly caters to beneficiaries of the government schemes and government officials, the collection period is elongated which leads to higher reliance on working capital limits. Going forward, improvement in the working capital cycle, will be a key rating sensitivity.

Moderation in profitability amid stagnant revenues

The topline of the firm has remained stagnant over the last few years, with revenue ranging between Rs.42-43 Cr, due to maximum occupancy and no scope for capacity expansion. Further, the operating margin declined sharply in FY2025 to 6.03 percent from 12.83 percent on account of write-off of significant receivables. Going forward, with no major write-offs expected, the margins are expected to increase marginally, however, they are expected to remain moderate as compared to previous levels on account of rising input costs. The PAT margin stood at 2.39 percent in FY2025 as against 8.73 percent in FY2024. Improvement in the overall operating performance will remain as a key monitorable.

Moderate financial risk profile

The financial risk profile of the firm is characterized by low networth, moderate gearing and adequate debt coverage indicators. Further, networth declined to Rs. 8.09 Cr. in FY2025 from Rs. 9.60 Cr. in FY2024, post withdrawal of profits by the partners. Further, gearing remains moderate at 1.29 times in FY2025 (1.27 times in PY). Additionally, the interest coverage ratio (ICR) and debt service coverage ratio (DSCR) stood at 3.00 times and 1.82 times respectively in FY2025.

Inherent risk of withdrawal of partner's capital

The firm is susceptible to the inherent risk of capital withdrawal given its constitution. There have been multiple instances of withdrawals by way of drawings from the firm. The partners have withdrawn Rs. 1.52 Cr. in FY2025, which led to decline in the tangible networth. Any further significant withdrawal of the partner’s capital may have a negative bearing on the financial risk profile of the firm.

Rating Sensitivities

Potential triggers (individual or collective) for an upward rating action:

Improvement in operating revenue
Improvement in working capital cycle with GCA reducing below 150 days

Potential triggers (individual or collective) for a downward rating action:

Decline in operating margins below 5 percent
Further elongation in the working capital cycle.
Increase in debt levels impacting the financial risk profile.

Liquidity Position

Adequate

The firm has an adequate liquidity position, with net cash accruals (NCAs) of Rs. 1.81 Cr. against repayment obligations of Rs. 0.59 Cr. in FY2025. Going forward, the NCAs are expected to remain in the range of Rs. 2 – 3 Cr. with maturing repayments of Rs. 0.2 – 0.5 Cr. for FY2026 and FY2027. The current ratio stood adequate at 1.15 times on March 31, 2025. Further, the firm had an unencumbered balance of Rs. 1.39 Cr. on March 31, 2025.

Outlook: Stable

Other Factors affecting Rating

None

Key Financials

Particulars	Unit	FY 25 (Actual)	FY 24 (Actual)
Operating Income	Rs. Cr.	42.25	43.11
PAT	Rs. Cr.	1.01	3.76
PAT Margin	(%)	2.39	8.73
Total Debt/Tangible Net Worth	Times	1.29	1.27
PBDIT/Interest	Times	3.00	5.83

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
• Service Sector: https://www.acuite.in/view-rating-criteria-50.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
10 Feb 2025	Cash Credit	Long Term	8.59	ACUITE BB \| Stable (Reaffirmed)
	Term Loan	Long Term	0.04	ACUITE BB \| Stable (Reaffirmed)
	Cash Credit	Long Term	1.41	ACUITE BB \| Stable (Reaffirmed)
	Proposed Long Term Bank Facility	Long Term	0.38	ACUITE BB \| Stable (Reaffirmed)
16 Nov 2023	Term Loan	Long Term	0.29	ACUITE BB \| Stable (Reaffirmed)
	Term Loan	Long Term	0.04	ACUITE BB \| Stable (Reaffirmed)
	Cash Credit	Long Term	8.59	ACUITE BB \| Stable (Reaffirmed)
	Cash Credit	Long Term	1.41	ACUITE BB \| Stable (Assigned)
	Proposed Long Term Bank Facility	Long Term	0.09	ACUITE BB \| Stable (Assigned)

Annexure - Details of instruments rated

Lender’s Name	ISIN	Facilities	Listing Status	Regulated By	Date Of Issuance	Coupon Rate	Maturity Date	Quantum (Rs. Cr.)	Complexity Level	Rating
H D F C Bank Limited	Not avl. / Not appl.	Cash Credit	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	4.99	Simple	ACUITE BB- \| Stable \| Downgraded ( from ACUITE BB )
H D F C Bank Limited	Not avl. / Not appl.	Dropline Overdraft	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	5.00	Simple	ACUITE BB- \| Stable \| Downgraded ( from ACUITE BB )
Not Applicable	Not avl. / Not appl.	Proposed Long Term Bank Facility	Unlisted	RBI	Not avl. / Not appl.	Not avl. / Not appl.	Not avl. / Not appl.	0.39	Simple	ACUITE BB- \| Stable \| Downgraded ( from ACUITE BB )
INDUSIND BANK LIMITED	Not avl. / Not appl.	Term Loan	Unlisted	RBI	07 Aug 2022	Not avl. / Not appl.	07 Sep 2026	0.04	Simple	ACUITE BB- \| Stable \| Downgraded ( from ACUITE BB )

Contacts

Mohit Jain
Chief Analytical Officer - Rating Operations

Kruti Patel
Associate Analyst - Rating Operations

Contact details exclusively for investors and lenders

Mob: +91 8591310146
Email ID: analyticalsupport@acuite.in

List of instruments and names of regulators of the instruments

As required by SEBI Circular (SEBI/HO/DDHS/DDHS-PoD-2/I/4685/2026) dated February 10, 2026, a list of activities or instruments falling under the purview of various Financial Sector Regulators (FSRs), along with the names of respective FSRs, is being disclosed below:
A. Rating Activity:

Sr. No.	Instrument / activity Name	Regulator of the instrument
1	Listed/Proposed to be listed Bonds/Debentures/Preference Shares (all securities)	SEBI
2	Unlisted/Proposed to be unlisted Bonds/Debentures/ Preference share (all securities)	MCA
3	Listed PTCs / Securitisation Notes (originated by entities regulated by RBI)¹	SEBI
4	Listed PTCs / Securitisation Notes (originated by entities not regulated by RBI)¹	SEBI
5	Unlisted PTCs / Securitisation Notes (originated by entities regulated by RBI)¹	RBI
6	Listed Commercial Paper and NCDs with original maturity less than 1 year	RBI
7	Unlisted Commercial Paper and NCDs with original maturity less than 1 year	RBI
8	Loan Facilities (Fund/Non-Fund Based) from Bank / NBFCs/ NHB/ FIs ²	RBI
9	External Commercial Borrowings and other similar borrowings	RBI
10	Certificates of Deposit	RBI
11	Fixed Deposits raised by NBFCs, Banks, HFCs, FIs	RBI
12	Fixed Deposits raised by corporates other than NBFCs, Banks, HFCs, FIs	MCA
13	Inter Corporate Deposits/Loans extended by Corporates	MCA
14	Borrowing programme ³	-
15	Issuer Ratings ⁴	-
16	Credit Ratings for Capital Protection Oriented Schemes (by Mutal Funds and AIFs)	SEBI
17	Credit quality ratings (CQRs) for Mutual Fund Schemes and Schemes of AIFs	SEBI
18	Listed Security Receipts	SEBI
19	Unlisted Security Receipts	RBI
20	Independent Credit Evaluation (ICE)	RBI
21	Expected Loss Ratings (For Loan Facilities [Fund/Non-Fund based] from Banks/NBFCs/NHB/FIs)	RBI
22	Expected Loss Ratings (Listed / Proposed to be listed Bonds / Debentures / Preference Shares (all securities))	SEBI
23	Expected Loss Ratings (Unlisted / Proposed to be unlisted Bonds/ Debentures / Preference Shares (all securities))	MCA
24	Unlisted PTCs / Securitisation Notes (originated by entities not regulated by RBI) ¹	Investor-side Regulator such as IRDAI, PFRDA ⁵

¹Includes securitisation transactions involving assignee payout, acquirer's payout.

² Includes bank facilities such as liquidity facility, second loss facility that are part of securitisation transactions.
³The rated instrument may involve issuance of different instruments such as debt securities (listed or otherwise), bank loans, commercial paper (listed or otherwise), etc. The regulator of the instrument may accordingly be SEBI, RBI or MCA and can only be determined upon issuance. In Press Release(s) subsequent to issuance(s), Acuite shall separately capture the rated quantum details along with names of respective regulators.
⁴ There is no instrument being rated and hence, Regulator of the Instrument is not applicable. The rating scale and definitions are being followed as stipulated in SEBI Master Circular for CRAs.
⁵ These ratings were assigned during regulatory regime prior to the introduction of SEBI CRA Circular dated Feb 10, 2026 and accordingly, investor side regulators have been included.

B. Other activities:

Sr. No.	Activity Name	Regulator of the activity
1	Monitoring Agency	SEBI
2	Research activities, incidental to rating, such as research for Economy, Industries and Companies ⁶	Not applicable

⁶ permitted by SEBI vide SEBI Master Circular for CRAs.

Disclosure on instruments / activities and names of regulators:

A list of products/activities or ratings of instruments falling under the purview of various financial sector regulators (FSRs) along with the names of respective FSRs has also been duly disclosed by Acuite on its website. A link to the same has been provided below for ready reference:

https://acuite.in/Activities-and-Regulators.html

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.