Vishal group promoted Mainawati Steel Industries long term and short term bank facility increase to Rs 561.74 crore from Rs 496.5 crore graded by Care Ratings Nepal

CARE Ratings Nepal Limited (CRNL) has revised the rating to ‘CARE-NP BBB-’ for the long-term bank facilities and reaffirmed ‘CARE-NP A3’ assigned to the short-term  bank  facilities  of  Mainawati  Steel Industries Private Limited (MSPL).

The revision in ratings assigned to the bank facilities of Mainawati Steel Industries Private Limited (MSPL) takes into account deterioration in debt service coverage indicators, increase in gearing level coupled with dip in the profitability margins during FY19 (audited, refers to 12 months period ended mid-July 2019).

The ratings derive strength from established and long track record of operations along with strong promoters and experienced   management   team   in   the   related   field,   comfortable   operational   and   financial   profile characterized by growth in sales. The rating also factors in liquidity profile supported by liquid investments in  listed  shares,  diverse  product  range  catering  to  wide  spectrum  of  industries with established  marketing setup and demand of steels products in the country.

The ratings are, however, constrained by raw material price  volatility  risk  and  foreign  exchange  fluctuation  risk,  working  capital  intensive  nature  of  operations, exposure  to  volatile  interest  rates  and  presence  in  highly  fragmented  and  competitive  nature  of  steel industry. The ability of the company to pass through changes in raw material prices to the finished products and  managing  the  foreign  exchange  fluctuation risks  related  to  raw  materials  will  be  the  key  rating sensitivities.

About the Company

Mainawati  Steel  Industries  Private  Limited  (MSPL) is  a  private  limited  company  incorporated  on  May  17, 1995  for  setting  up  of  M.S.  Black  &  Galvanized  pipe  plant  in  Sunsari district  of  Nepal.  The  company  is operating from more than 2 decades and manufacturing wide range of steel products with total installed plant capacity of 90,450 metric tons per annum. MSPL primarily manufactures MS black pipes, galvanized pipes, tubes and its variants. All the shares have been held by individual promoter group shareholders.

MSPL is managed under the overall guidance of its two-member Board of Directors (BoD) which includes eminent  Businessmen/Industrialists  with  wide  experience  in  the  manufacturing  sectors.  Mr.  Tulsi  Ram Agrawal  is  the  Chairman  of  MSPL,  and  has more  than  45  years  of experience  in  manufacturing  industry, banking sector, insurance sector and trading business. He is the Chairman of NIC Asia Bank Limited (rated CARE  NP  A).  Mr.  Trilok  Chand  Agrawal  is  another  director  of  MSPL  and  has  more  than  47  years  of experience in manufacturing industry, banking sector, insurance sector and trading business. He is Director of NIC Asia Bank Limited. The promoters are supported by a team of technically qualified and experienced professionals to run the day-to-day operations of MSPL. 

Source: careratingsnepal.com