By Brazil Gonsalves

India Ratings and Research (Ind-Ra) has downgraded Firestar International Private Limited’s (FIPL) Long-Term Issuer Rating to ‘IND D’ from ‘IND C’ and migrated it to the non-cooperating category. The issuer did not participate in the surveillance exercise, despite continuous requests and follow-ups by the agency. Thus, the rating actions are based on the best available information. The rating will now appear as ‘IND D(ISSUER NOT COOPERATING)’ on the agency’s website. The instrument-wise rating actions are given below:

Instrument Type

Date of Issuance

Coupon Rate

Maturity Date

Size of Issue (million)

Rating

Rating Action

Fund-based working capital facilities (Long term/Short term)

-

-

-

INR17,132

IND D(ISSUER NOT COOPERATING)

Downgraded and migrated to non-cooperating category

Non-fund-based working capital facilities (Short term)

-

-

-

INR2,272

IND D(ISSUER NOT COOPERATING)

Downgraded and migrated to non-cooperating category

Note: ISSUER NOT COOPERATING: Issuer did not cooperate; based on the best available information.

KEY RATING DRIVERS

The downgrade reflects the confirmation from one of FIPL’s lenders that the company has become a non-performing asset. 

Ind-Ra has been seeking monthly no default statements from the company; however, it has not received the same post December 2017.


RATING SENSITIVITIES

Positive: Timely debt servicing for three consecutive months confirmed by FIPL and its bankers could result in a rating upgrade.


COMPANY PROFILE

FIPL, founded by Nirav Modi, is a global diamond and jewellery company.

FINANCIAL SUMMARY
 

Particulars

FY17

FY16

Revenue (INR million)

147,004

125,109

EBITDA (INR million)

7,883

7,302

EBITDA margin (%)

5.4

5.8

Interest coverage (x)

3.2

3.3

Net leverage (x)

3.8

4.3

Source: FIPL, Ind-Ra


RATING HISTORY

Instrument Type

Current Rating

Historical Rating/Outlook/Rating Watch

Rating Type

Rated Limits(million)

Rating

20 February 2018

17 March 2017

29 January 2016

Issuer rating

Long-term

-

IND D(ISSUER NOT COOPERATING)

IND C

IND A-/Stable

IND A-/Stable

Fund-based working capital facilities

Long-term/Short-term

INR17,132

IND D(ISSUER NOT COOPERATING)

IND C/IND A4

IND A-/Stable/IND A2+

IND A-/Stable/IND A2+

Non-fund-based working capital facility

Short-term

INR2,272

IND D(ISSUER NOT COOPERATING)

IND A4

IND A2+

IND A2+


COMPLEXITY LEVEL OF INSTRUMENTS

For details on complexity level of the instruments, please visit https://www.indiaratings.co.in/complexity-indicators.

SOLICITATION DISCLOSURES

Additional information is available at www.indiaratings.co.in. The ratings above were solicited by, or on behalf of, the issuer, and therefore, India Ratings has been compensated for the provision of the ratings. 

Ratings are not a recommendation or suggestion, directly or indirectly, to you or any other person, to buy, sell, make or hold any investment, loan or security or to undertake any investment strategy with respect to any investment, loan or security or any issuer.

ABOUT INDIA RATINGS AND RESEARCH

India Ratings and Research (Ind-Ra) is India's most respected credit rating agency committed to providing India's credit markets accurate, timely and prospective credit opinions. Built on a foundation of independent thinking, rigorous analytics, and an open and balanced approach towards credit research, Ind-Ra has grown rapidly during the past decade, gaining significant market presence in India's fixed income market. 

Ind-Ra currently maintains coverage of corporate issuers, financial institutions (including banks and insurance companies), finance and leasing companies, managed funds, urban local bodies, structured finance and project finance companies. 

Headquartered in Mumbai, Ind-Ra has seven branch offices located in Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata and Pune. Ind-Ra is recognised by the Securities and Exchange Board of India, the Reserve Bank of India and National Housing Bank. 

Ind-Ra is a 100% owned subsidiary of the Fitch Group.

For more information, visit www.indiaratings.co.in.

DISCLAIMER

ALL CREDIT RATINGS ASSIGNED BY INDIA RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTPS://WWW.INDIARATINGS.CO.IN/RATING-DEFINITIONS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE WWW.INDIARATINGS.CO.IN. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. INDIA RATINGS’ CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE.

Applicable Criteria

Analyst Names

  • Primary Analyst

    Brazil Gonsalves

    Senior Analyst
    India Ratings and Research Pvt Ltd Wockhardt Towers, 4th Floor, West Wing, Bandra Kurla Complex, Bandra East,Mumbai - 400051
    +91 22 40001764

    Media Relation

    Namita Sharma

    Manager – Corporate Communication
    +91 22 40356121