Press Release November 14, 2024 VIPUL ORGANICS LIMITED Rating Downgraded

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	3.00	ACUITE C | Downgraded	-
Bank Loan Ratings	27.00	-	ACUITE A4 | Downgraded
Total Outstanding	30.00	-	-
Total Withdrawn	0.00	-	-

Rating Rationale

Acuite has downgraded the 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 the Rs.30.00 crore bank facilities of Vipul Organics Limited(VOL).  Rationale for Downgrade As per the CRIF Report, there was a delay in the month of August 2024 of 34 days in the Packing Credit facility.

About Company

­VOL, established in 1972 in Mumbai by Mr. Pravichandra B. Shah as a small venture, is involved in the production and trading of pigment powder, pigment dispersion, Dyes, and Dyes Intermediates. In 1994, the company transformed into a public limited entity and became listed on the Bombay Stock Exchange. The role of Managing Director was assumed by Mr. Vipul P. Shah, a chemical engineer by profession and the son of Mr. P. B. Shah. The company currently operates three manufacturing units situated in Tarapur, Ambernath, and Palghar (Maharashtra), collectively offering a total annual capacity of 3120 MT.

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 Vipul Organics Limited (VOL) and its subsidiary, i.e. Shree Ambika Naturals Private Limited (SANPL). The consolidation is in view of the common management, operating in same line of business and operational synergies between these entities. As of FY23, VOL holds 56.04 percent of equity shares in SANPL.

Key Rating Drivers

Strengths

­Experienced management with established track record of operations Established in 1972 by Mr. Pravichandra B. Shah, the company is involved in the manufacturing and trading of pigment-related products such as pigment powder, pigment dispersion, Dyes, and Dyes Intermediates. Subsequently, in 1994, VOL underwent conversion into a public limited company and achieved listing on the Bombay Stock Exchange. The company’s operations are overseen by Mr. Vipul P. Shah, a chemical engineer with over thirty years of experience in the Dyes and Pigments Industry, who is the son of Mr. P. B. Shah. The proficient second line of management provides robust support to the top management. The company’s lengthy operational history of more than five decades, combined with skilled leadership, has facilitated the establishment of strong global relationships with esteemed clients and suppliers.

Weaknesses

­Working capital intensive operations The inventory days stood at 88 days in FY2024 as against 106 days in FY2023. Further, the debtor days stood at 108 days in FY 2024 as compared to 93 days in FY 2023. The creditor days tsood at 144 days in FY2024 as against 138 days in FY2023. Acuité believes that the working capital operations of the firm will remain at the similar levels over the medium term.

Rating Sensitivities

Timely servicing of debt obligations

Liquidity Position

Poor

­Delays in debt obligations  Acuite has observed a delay of 34 days in the month of August 2024 for Packing Credit facility. The banker feedback are also not available. It appears to be cash flow mis-match of the Company and hence the rating downgrade has been undertaken.

Outlook: Not Applicable

­

Other Factors affecting Rating

­None

Key Financials

Particulars	Unit	FY 24 (Actual)	FY 23 (Actual)
Operating Income	Rs. Cr.	150.08	133.93
PAT	Rs. Cr.	3.34	1.87
PAT Margin	(%)	2.22	1.40
Total Debt/Tangible Net Worth	Times	0.49	0.54
PBDIT/Interest	Times	5.24	4.39

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

­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 • Covered Bonds: https://www.acuite.in/view-rating-criteria-83.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 24 Aug 2023 FBN/FBP/FBD/PSFC/FBE Short Term 12.00 ACUITE A3 (Reaffirmed) PC/PCFC Short Term 2.00 ACUITE A3 (Reaffirmed) Post Shipment Credit Short Term 10.00 ACUITE A3 (Reaffirmed) Letter of Credit Short Term 3.00 ACUITE A3 (Reaffirmed) Cash Credit Long Term 3.00 ACUITE BBB- | Stable (Reaffirmed) 27 Jul 2022 FBN/FBP/FBD/PSFC/FBE Short Term 12.00 ACUITE A3 (Reaffirmed) PC/PCFC Short Term 2.00 ACUITE A3 (Reaffirmed) Post Shipment Credit Short Term 10.00 ACUITE A3 (Reaffirmed) Letter of Credit Short Term 3.00 ACUITE A3 (Reaffirmed) Cash Credit Long Term 3.00 ACUITE BBB- | Stable (Reaffirmed) 19 Feb 2021 Bills Discounting Short Term 9.00 ACUITE A3 (Assigned) Bills Discounting Short Term 3.00 ACUITE A3 (Assigned) Letter of Credit Short Term 3.00 ACUITE A3 (Assigned) Cash Credit Long Term 3.00 ACUITE BBB- | Stable (Assigned) Proposed Cash Credit Long Term 3.00 ACUITE BBB- | Stable (Assigned) Term Loan Long Term 9.00 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 Axis Bank Not avl. / Not appl. Cash Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 3.00 Simple ACUITE C | Downgraded ( from ACUITE BBB- ) Axis Bank Not avl. / Not appl. FBN/FBP/FBD/PSFC/FBE Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 12.00 Simple ACUITE A4 | Downgraded ( from ACUITE A3 ) Bank of Baroda Not avl. / Not appl. Letter of Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 3.00 Simple ACUITE A4 | Downgraded ( from ACUITE A3 ) Bank of Baroda Not avl. / Not appl. PC/PCFC Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 2.00 Simple ACUITE A4 | Downgraded ( from ACUITE A3 ) Bank of Baroda Not avl. / Not appl. Post Shipment Credit Not avl. / Not appl. Not avl. / Not appl. Not avl. / Not appl. 10.00 Simple ACUITE A4 | Downgraded ( from ACUITE A3 )

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

­ Sr. No Name of the companies 1 Vipul Organics Limited 2 Shree Ambika Naturals Private Limited

Contacts

Mohit Jain Senior Vice President - Rating Operations Manvi Khaitan 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.