PR

Press Release
VITSON STEEL CORP PRIVATE LIMITED
May 10, 2023
Rating Downgraded and Issuer not co-operating

Product	Quantum (Rs. Cr)	Long Term Rating	Short Term Rating
Bank Loan Ratings	52.50	ACUITE BB+ \| Downgraded \| Issuer not co-operating*	-
Total Outstanding Quantum (Rs. Cr)	52.50	-	-

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.52.50 Cr bank facilities of Vitson Steel Corp Private Limited.

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, 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.

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.

Prabhu Steels
Kerala based, Prabhu Steels (PS) was established as a partnership firm in 1996. The entity is the sole authorized distributor of TATA Steels Limited products in Kerala. The products are mainly TMT Bars, Tubes, Sheets, Doors, and Windows. The partners of the firm are Mr. Manoj Prabhu and Mrs. Rajasree Prabhu.

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.

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.

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
• 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	Channel Financing	Long Term	5.00	ACUITE BBB- \| Stable (Reaffirmed)
	Cash Credit	Long Term	6.50	ACUITE BBB- \| Stable (Reaffirmed)
	Channel Financing	Long Term	6.00	ACUITE BBB- \| Stable (Reaffirmed)
	Channel Financing	Long Term	7.50	ACUITE BBB- \| Stable (Reaffirmed)
	Inventory Funding	Long Term	10.00	ACUITE BBB- \| Stable (Reaffirmed)
	Proposed Bank Facility	Long Term	17.50	ACUITE BBB- \| Stable (Reaffirmed)
10 Feb 2021	Channel Financing	Long Term	6.00	ACUITE BBB- \| Stable (Reaffirmed)
	Cash Credit	Long Term	16.50	ACUITE BBB- \| Stable (Reaffirmed)
	Channel Financing	Long Term	7.50	ACUITE BBB- \| Stable (Reaffirmed)
	Channel Financing	Long Term	10.00	ACUITE BBB- \| Stable (Reaffirmed)
	Proposed Bank Facility	Long Term	7.50	ACUITE BBB- \| Stable (Reaffirmed)
	Channel Financing	Long Term	5.00	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
CITI Bank	Not Applicable	Cash Credit	Not Applicable	Not Applicable	Not Applicable	6.50	Simple	ACUITE BB+ \| Downgraded \| Issuer not co-operating*
ICICI Bank Ltd	Not Applicable	Channel/Dealer/Vendor Financing	Not Applicable	Not Applicable	Not Applicable	7.50	Simple	ACUITE BB+ \| Downgraded \| Issuer not co-operating*
Yes Bank Ltd	Not Applicable	Channel/Dealer/Vendor Financing	Not Applicable	Not Applicable	Not Applicable	5.00	Simple	ACUITE BB+ \| Downgraded \| Issuer not co-operating*
Standard Chartered Bank	Not Applicable	Channel/Dealer/Vendor Financing	Not Applicable	Not Applicable	Not Applicable	6.00	Simple	ACUITE BB+ \| Downgraded \| Issuer not co-operating*
Axis Bank	Not Applicable	Inventory Funding	Not Applicable	Not Applicable	Not Applicable	10.00	Simple	ACUITE BB+ \| Downgraded \| Issuer not co-operating*
Not Applicable	Not Applicable	Proposed Long Term Bank Facility	Not Applicable	Not Applicable	Not Applicable	17.50	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.