Ind-Swift Laboratories

The Gross Cash Accruals of the entity stood at Rs. 105.19 crores during FY23 declined from Rs.133.22 Crores in FY22.

Rating sensitivities: Factors likely to lead to rating actions Positive factors • Scale up of operations with continuing profits reported at the net level • Shortening of the working capital cycle leading to lower reliance on borrowings • Ability of the company to repay the NCDs through debt refinancing or liquidity infusion on timely basis Negative factors • Any significant decline in income or in the PBILDT margins (to below 10%) • Any major deterioration in the liquidity position • Any significant fund diversion to the group entities/related parties or significant write off of existing adva

The sale consideration of Rs.800cr will be used to repay the outstanding debt of Rs.800cr and remaining will be the sur plus to the company.

The Gross Cash Accruals of the entity stood at Rs. 105.19 crores during FY23 declined from Rs.133.22 Crores in FY22.

High debt repayment in the medium term: The company has issued NCD of Rs.450cr during Jun,18 for the repayment to its lenders under the OTS scheme.

Therefore, considering the stretched liquidity position on account of high repayment, ability of the company to repay the debt obligations on timely basis through liquidity infusion from BTAor refinancing the debtwould be the key rating sensitivity.

Rating sensitivities: Factors likely to lead to rating actions Positive factors • Scale up of operations with continuing profits reported at the net level • Shortening of the working capital cycle leading to lower reliance on borrowings • Ability of the company to repay the NCDs through debt refinancing or liquidity infusion on timely basis Negative factors • Any significant decline in income or in the PBILDT margins (to below 10%) • Any major deterioration in the liquidity position • Any significant fund diversion to the group entities/related parties or significant write off of existing adva

The sale consideration of Rs.800cr will be used to repay the outstanding debt of Rs.800cr and remaining will be the surplus to the company.

The Gross Cash Accruals of the entity stood at Rs. 105.19 crores during FY23 declined from Rs.133.22 Crores in FY22.

Press Release Press Release High debt repayment in the medium term: The company has issued NCD of Rs.450cr during Jun,18 for the repayment to its lenders under the OTS scheme.

Therefore, considering the stretched liquidity position on account of high repayment, ability of the company to repay the debt obligations on timely basis through debt refinancing or liquidity infusion would be the key rating sensitivity.

Rating sensitivities Positive factors – Factors that could lead to positive rating action/upgrade: • Scale up of operations with continuing profits reported at the net level • Shortening of the working capital cycle leading to lower reliance on borrowings • Ability of the company to repay the NCDs through debt refinancing or liquidity infusion on timely basis Negative factors – Factors that could lead to negative rating action/downgrade: • Any significant decline in income or in the PBILDT margins (to below 10%) • Any major deterioration in the liquidity position • Any significant fund diversi

The Gross Cash Accruals of the entity stood at Rs. 133.22 Crores during FY22 rising from Rs. 102.72 Crores in FY21.

High debt repayment in the medium term: The company has issued NCD of Rs.450cr during Jun,18 for the repayment to its lenders under the OTS scheme.

Therefore, considering the stretched liquidity position on account of high repayment, ability of the company to repay the debt obligations on timely basis through debt refinancing or liquidity infusion would be the key rating sensitivity. 2 CARE Ratings Ltd.

However, liquidity position of the company is stretched on account of a very high repayment due in FY25 pertaining to redemption of NCD’s along with term debt repayment obligation of Rs.26.15 crore, for which it needs to create reserve and preserve liquidity.

The Gross Cash Accruals of the entity stood at Rs. 102.72 Crores during FY21 rising from Rs. 70.09 Crores in FY20 and further improving to Rs. 70.62 Crores in H1FY22.

High debt repayment in the medium term: The company has issued NCD of Rs.450cr during Jun,18 for the repayment to its lenders under the OTS scheme.

Detailed description of the key rating drivers Key Rating Weaknesses Average overall solvency position: The capital structure of the company viz. the long-term debt to equity ratio and overall gearing ratio stood leveraged at 1.94x and 2.14x respectively, as on March 31, 2021; though, improving from 2.37x and 2.68x 1 CARE Ratings Limited Press Release respectively, as on March 31, 2020, on account of repayment of term debt obligations.

The average utilization of the fund based working capital limits remained moderate at ~51% for the twelve- month period ended June-2021.

Key rating weaknesses Weak overall solvency position: The capital structure of the company viz. the long term debt to equity ratio and overall gearing ratio stood leveraged at 2.37x and 2.68x respectively, as on March 31, 2020; though, improving from 3.63x and 4.22x respectively, as on March 31, 2019, on account of conversion of the issued Optionally Convertible Debentures (OCDs) of Rs.75.44 Cr. to equity and repayment of term debt obligations.

Key rating weaknesses Weak overall solvency position: The capital structure of the company viz. the long term debt to equity ratio and overall gearing ratio stood leveraged at 2.37x and 2.68x respectively, as on March 31, 2020; though, improving from 3.63x and 4.22x respectively, as on March 31, 2019, on account of conversion of the issued Optionally Convertible Debentures (OCDs) of Rs.75.44 Cr. to equity and repayment of term debt obligations.

ISLL had also availed the moratorium, extant RBI guidelines in light of Covid -19, on its working capital interest payments due in the March -2020 to August-2020 from the banks and for a part of its obligations from other lenders as well.

The company has a repayment obligation of ~Rs.36 Cr. in FY21 projected to be d one through the internals accruals generated.

The average utilization of the fund based working capital limits remained high at ~90% for the twelve month period ended August-2019.

The 2 Complete definition of the ratings assigned are available at www.careratings.com and other CARE publications 1 CARE Ratings Limited Press Release company has a hefty repayment obligation of ~Rs.63 Cr. in FY20 against which its internal accruals are expected to remain tightly matched.

The company raised a total of Rs.499.94 Cr. in FY19 through issue of NCDs and OCDs.

The company has a repayment obligation of Rs.55.20 Cr. for FY20 which is proposed to be met through the internal resources of the company. 2 Complete definition of the ratings assigned are available at www.careratings.com and other CARE publications 1 CARE Ratings Limited Press Release Weak overall solvency position: The capital structure of the company remained leveraged as on March 31, 2018.