CARE Nepal assigns BB and A4 to long term and short term bank facilities of Asian Feeds

CARE Ratings Nepal Ltd. (CRNL) has assigned Rating of ‘CARE-NP BB’ to the long term bank facilities and ‘CARE-NP A4’ to the short term bank facilities of Asian Feeds Private Limited (AFPL).

 Key Rating Weaknesses

• Working capital intensive nature of operation coupled with elongated operating cycle
• Leveraged capital structure including moderate debt coverage indicators
• Exposure to volatile interest rate
• Exposure to raw material price volatility including its availability
• Foreign exchange fluctuation risk on imports which partly remains unhedged
• Concentration of business over poultry feeds and inherent risk of poultry business
• Stiff competition from other players in feeds industry

Key Rating Strengths

• Experienced Board Members of the Company
• Steady growth in total operating income along with increasing trend of profitability margin
• Established dealer network
• Growth prospect of the industry

About the Company

AFPL was incorporated on September 29, 2011 as private limited company and is promoted by individual promoters from different background. AFPL is ISO 9001:2008 certified company. Its registered office is located in Kathmandu, Nepal and the plant is located at Budiganga Rural Municipality, Morang, Nepal. It has been manufacturing poultry and other livestock feeds and distributing products within Nepal, mainly focused in Eastern and Central part. It has Rs 148 Mn paid up equity share capital at the end of FY19 contributed by ten shareholders.

Brief Financial Performance during the last 3 years is as follows:

(Rs in Million)

*Unaudited

Details of the Facilities rated

Source: CARE Nepal Ratings