प्रति To,

नेशनल स्टॉक एक्सचेंज ऑफ इंडिया लिमिटेड National Stock Exchange of India Ltd. एक्सचेंज प्लाज़ा , प्लॉट नं. सी/1, जी ब्लॉक Exchange Plaza, Plot No. C/1, G Block, बांद्रा-कुर्ला कॉम्प्लेक्स, बांद्रा (पूर्व) Bandra-Kurla Complex, Bandra (E) मुंबई/Mumbai - 400 051

सं.No. 17565/6/SE/NSEC/SEC दिनांक / Date: 18.02.2021

भारत इलेक्ट्रॉनिक्स BHARAT FIFCTRONICS भारत इलेक्टॉनिक्स लिमिटेड (भारत सरकार का उद्यम, रक्षा मंत्रालय) पंजीकत कार्यालय : आउटर रिंग रोड, नागवारा, बेंगलूर - 560 045, भारत Bharat Electronics Limited (Govt. of India Enterprise, Ministry of Defence) Registered Office : Outer Ring Road, Nagavara, Bangalore - 560 045, INDIA. CIN: L32309KA1954GOI000787 टेलीफैक्स/Telefax: +91 (80) 25039266 ई-मेल/E-mail [email protected] ोब/Web www.bel-india.in

महोदय / महोदया. Dear Sir/Madam,

विषय - क्रेडिट रेटिंग की सूचना Sub: Intimation of Credit Rating.

सेबी (एल.ओ.डी.आर.) विनियम, 2015 के विनियम 30 के तारतम्य में, आपको सूचित किया जाता है कि आई.सी.आर.ए. (क्रेडिट रेटिंग एजेंसी) ने कंपनी की निम्नलिखित क्रेडिट रेटिंग की पन:पष्टि की है -Pursuant to Regulation 30 of SEBI (LODR) Regulations, 2015, we inform that ICRA (Credit Rating Agency) has reaffirmed the following credit ratings of the Company:

(iii) [आई.सी.आर.ए.]ए.ए.ए. (स्पष्ट आई.सी.आर.ए. ट्रिपल ए) की दीर्घकालीन रेटिंग क्रेडिट की रु. 500 करोड़ निधि आधारित सीमा और दीर्घकालीन- अनावंटित सीमा रु. 300 करोड़ Long-term rating of [ICRA]AAA (pronounced ICRA triple A) to ₹ 500 Crores fund based limits of credit and long term - unallocated to $\bar{\tau}$ 300 Crores.
(iv) [आई.सी.आर.ए.]ए1+ (स्पष्ट आई.सी.आर.ए. ए वन प्लस) की अल्पकालीन रेटिंग क्रेडिट की रु. 3,500 करोड़ की गैर-निधि आधारित सीमा Short-term rating of [ICRA]A1+ (pronounced ICRA A one plus) to $\bar{\tau}$ 3,500 Crores non-fund based limits of credit.

दीर्घकालीन रेटिंग की दृष्टि 'स्थिर' है। ये रेटिंग दीर्घकाल और अल्पकाल में सर्वोच्च क्रेडिट गुणता दर्शाते हैं। इन वर्गों में श्रेणीकृत विलेखों में दीर्घकाल और अल्पकाल में निम्नतम क्रेडिट जोखिम होते हैं। ये रेटिंग 12 फरवरी 2022 तक वैध हैं।

The outlook on the long-term rating is 'Stable'. These ratings indicate the highest credit quality in the long- and short-term. The instruments rated in these categories carry the lowest credit risk in the long- and short-term. These ratings are valid till 12^th February 2022.

आपके संदर्भ हेतु आई.सी.आर.ए. द्वारा जारी रिपोर्ट की प्रति संलग्न है। We enclose copy of the report issued by ICRA for your reference.

सूचना व अभिलेख हेतु। This is for your information and record.

सधन्यवाद / Thanking you,

भवदीय Yours faithfully,

संलग्न- यथा उपरोक्त । Encls: As stated above.

Ref: BLR: 2020-2021/RT-BASEL/593

Date: 17th February 2021

Ms. Rani Vergis

Executive Director (Finance) Bharat Electronics Limited, Outer Ring Road, Nagavara, Bangalore 560 045

Dear Sir,

Re: Surveillance of ICRA-assigned Credit Rating for Rs. 4,300 crore borrowing programme of Bharat Electronics Limited (instrument details in Annexure)

Please refer to the RRF dated 4th February 2019 and Rating Agreement dated 7th February 2019 executed on an annual basis, or as and when the circumstances so warrant. Based on a review of the latest developments, the Rating Committee of ICRA, after due consideration has reaffirmed the long-term rating of your company at [ICRA]AAA The Rating Committee of ICRA, after due consideration has also reaffirmed the short-term rating at [ICRA]A1+ (pronounced ICRA A one Plus) -term rating is Stable. Instruments with [ICRA]AAA rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. between ICRA Limited ("ICRA") and your Company, whereby, ICRA is required to review its ratings, (pronounced ICRA triple A) ("Rating") ( " Rating"). The outlook on the long

In any of your publicity material or other document wherever you are using the above Rating, it should be stated as [ICRA]AAA (Stable) / [ICRA]A1+.

The aforesaid Rating will be due for surveillance any time before February 12, 2022.

The Ratings are specific to the terms and conditions of the instrument as indicated to us by you, and any change in the terms or size of the same would require a review of the Ratings by us. In case there is any change in the terms and conditions or the size of the rated instrument, the same must be brought to our notice before the instrument is used by you. In the event such changes occur after the Ratings have been assigned by us and their use has been confirmed by you, the Ratings would be subject to our review, following which there could be a change in the Ratings previously assigned. Notwithstanding the foregoing, any change in the over-all limit of the instrument from that specified in the subject line of this letter would constitute an enhancement that would not be covered by or under the said Rating Agreement.

ICRA reserves the right to review and/or, revise the above Ratings at any time on the basis of new information becoming available, or the required information not being available, or other circumstances that ICRA believes could have an impact on the Ratings assigned.

The Rating(s) assigned must be understood solely as an opinion and should not be treated, or cause to be treated, as recommendation to buy, sell, or hold the rated instrument availed/issued by your company.

4A, 4" Floor, SHOBHAN Te!. :+91.40.40676500 Website : www.icra.in 6-3-927/A&B Raj Bhavan Road CIN : L74999DL1991PLC042749 Email : [email protected] Somajiguda, Hyderabad-500082 Helpdesk: +91.124.3341580 Registered Office : 1105, Kailash Building, 11," Floor, 26 Kasturba Gandhi Marg, New Delhi - 110001. Tel. : +91.11,23357940-45 RATING . RESEARCH . INFORMATION

You are also requested to forthwith inform us about any default or delay in repayment of interest or principal amount of the instrument rated, as above, or any other debt instruments/ borrowing and keep us informed of any other developments which may have a direct or indirect impact on the debt servicing capability of the company including any proposal for re-schedulement or postponement of the repayment programmes of the dues/ debts of the company with any lender(s) / investor(s). Further, you are requested to inform us immediately as and when the borrowing limit for the instrument rated, as above, or as prescribed by the regulatory authority (ies) is exceeded.

We look forward to your communication and assure you of our best services.

With kind regards, Yours sincerely. For ICRA Limited

RAJESHWAR BURLA Raieshwar Burla Vice President [email protected]

4A, 4^th Floor, SHOBHAN Tel.: +91.40.40676500 Website : www.icra.in CIN: L74999DL1991PLC042749 Email : [email protected] 6-3-927/A&B Raj Bhavan Road Helpdesk: +91.124.3341580 Somajiguda, Hyderabad-500082 Registered Office: 1105, Kailash Building, 11^th Floor, 26 Kasturba Gandhi Marg, New Delhi - 110001. Tel.: +91.11.23357940-45

RATING RESEARCH . INFORMATION $\bullet$

'No Default Statement on the Company Letter Head

To, ICRA Limited Building No. 8, 2nd Floor, Tower A, DLF Cyber City, Phase II, Gurugram -122002

Dear Sir/ Madam,

1. We hereby confirm that as on date there are no overdues or default on our listed debt obligations. (Securities).
1. We hereby confirm that as on date there are no overdues or default on our unlisted debt obligations. (Securities).
1. We also confirm that in the month ended <>, there has been no instance of delay in servicing of our listed debt obligations (Securities).
1. We also confirm that in the month ended <>, there has been no instance of delay in servicing of our un-listed debt obligations(Securities).
1. We also confirm that in the month ended <>, there has been no instance of delay in servicing of debt obligations guaranteed by us.
1. We hereby confirm that as on date and in the month ended <> there are no over dues or default on payment of interest/installment obligations on loans from banks/financial institutions.
1. We hereby confirm that as on date there are no over dues or default on payment of interest/installment obligations on loans from banks/financial institutions which continues beyond 30 days.
1. We hereby confirm that as on date there are no over dues or default on revolving facilities like cash credit, from banks/financial institutions which continues beyond 30 days.
1. We also confirm that there is no amount remaining unpaid for more than 30 days from the invocation of the bank guarantee facilities or devolvement of Letters of Credit as on date / in the month ended <<Month and Year name>> We also confirm that there has not been any instance of devolvement of Letter of Credit in the month ended <**>
1. We also confirm that there has been no overdrawal of the drawing power sanctioned by the bank for a period of more than 30 consecutive days in case of bank facilities which do not have scheduled maturity/repayment dates.
1. Details of default in payment of interest/installment obligations on loans including revolving facilities like cash credit from banks/financial institutions and any overdraws beyond what is sanctioned by the bank, beyond 30 days as on date/ in the month ended <**>, in any of the above case (if any):

Name of Lender	Nature of obligation	Date of Default	Current default amount	Amount to be paid	Actual Date of Payment (if any)	Remarks
Text	Term
	Loan, CC

Details of default in payment of principal/interest obligations as on date/ in the month ended <**>, on our listed and unlisted debt obligations (Securities), in any of the above case (if any):

Name of the	ISIN	Amount to	Due Date of	Actual Date	Remarks
Instrument		be paid	Payment	of Payment
NCD

Thanking You, Yours faithfully,

6-3-927/A&B Raj Bhavan Road CIN : L74999DL1991PLC042749 Email : [email protected] Somajiguda, Hyderabad-500082 Helpdesk: +91.124.3341580

4A, 4" Floor, SHOBHAN Te!. :+91.40.40676500 Website : www.icra.in

Registered Office : 1105, Kailash Building, 11," Floor, 26 Kasturba Gandhi Marg, New Delhi - 110001. Tel. : +91.11,23357940-45 RATING . RESEARCH . INFORMATION

Annexure

Details of Bank Limits Rated by ICRA	Amount	Rating	Rating Assigned
(Rated on Long-Term Scale)	(Rs. crore)		on
Fund- based WC limits
State Bank of India
Canara Bank
Syndicate Bank
IDBI Bank
Bank of Baroda
Andhra Bank
Punjab National Bank	500.0	[ICRA]AAA	12th February 2021
Bank of India		(Stable)
ICICI Bank
Axis Bank
HDFC Bank
Kotak Mahindra Bank
Indus Ind Bank
YES Bank
Subtotal - Fund based WC limits (A)	500.0
Unallocated Long term borrowing (B)	300.0
Total Fund Based Limits (A + B)	800.0

Details of Bank Limits Rated by ICRA	Amount	Rating	Rating Assigned on
(Rated on Short-Term Scale)	(Rs. crore)
Non-fund based limits
State Bank of India
Canara Bank
Syndicate Bank
IDBI Bank
Bank of Baroda
Andhra Bank
Punjab National Bank	3,500.0	[ICRA]A1+	12th February 2021
Bank of India
ICICI Bank
Axis Bank
HDFC Bank
Kotak Mahindra Bank
Indus Ind Bank
YES Bank
Total Non-Fund based limits (C)	3,500.0

Total Limits (A + B + C)	4,300.0

February 17, 2021

Bharat Electronics Limited: Rating for bank lines reaffirmed at [ICRA]AAA (Stable)/ [ICRA]A1+, rating for Commercial Paper reaffirmed at [ICRA]A1+ and withdrawn

Summary of rating action

Instrument*	Previous Rated Amount (Rs. crore)	Current Rated Amount (Rs. crore)	Rating Action
Long-term Fund based	500.00	500.00
Long-term Unallocated	200.00	300.00	[ICRA]AAA (Stable); reaffirmed
Long-term Term Loan	100.00	0.00
Short-term Non-fund based	3,500.00	3,500.00	[ICRA]A1+; reaffirmed
Commercial Paper	5.00	0.00	[ICRA]A1+; reaffirmed and withdrawn
Total	4,305.00	4,300.00

*Instrument details are provided in Annexure-1

Rationale

The rating reaffirmation draws comfort from BEL / the company) strategic position as a dominant supplier of electronic equipment to the Indian defence forces. BEL is majority-owned by the Government of India (GoI) and is a defence public sector undertaking (DPSU). The assigned ratings consider the strong order pipeline; unexecuted order book worth Rs. 54,791 crore as on January 01, 2021, translating to an order book/operating income ratio of 4.2 times (based on FY2020 operating income), provides adequate revenue visibility in the medium term. Though competition from the private sector is likely to intensify in the medium to long term, BEL's established track record and large manufacturing capacities with adequate pool of trained manpower and research and development (R&D) capabilities will continue to be strong mitigating factors. BEL has a strong financial risk profile, characterised by healthy profit margins and return indicators, no fund-based borrowings and comfortable liquidity profile. Bharat Electronics Limited's (

These strengths are offset to some extent by BEL's continued high dependence on the defence sector, which contributes to remains elevated due to increase in receivables and unbilled revenues on account of long gestation periods for the orders executed. ICRA also notes that BEL's operating profit margins remain vulnerable to adverse foreign exchange fluctuations, lower profitability in certain segments and high level of cost overheads. the bulk of its revenues. BEL's working capital intensity

ICRA has also reaffirmed and subsequently withdrawn the rating of the per programme based on the confirmation that the rating was not utilised and there is no amount outstanding against the same. The Stable outlook BEL will continue to benefit from its strategic importance as the major supplier of defence electronics equipment to the Indian defence forces and the high entry barriers. company ^s Commercial Pa reflects ICRA' ^s expectation that

Key rating drivers and their description

Credit strengths

Defence PSU and a dominant supplier of electronic equipment to Indian defence forces BEL is a defence PSU, with the GoI holding 51.14% stake (reduced from 55.27% as on December-2019). The company is of strategic importance to the GoI as it is the dominant domestic supplier of defence electronics equipment to the Indian defence forces.

Strong pending order book provides adequate revenue visibility - The company's unexecuted order book as on January 01, 2021 stood at Rs. 54,791 crore. The order book stands at 4.2 times of the FY2020 operating income, which provides adequate revenue visibility in the medium term.

Strong financial profile with healthy profitability and low leverage - BEL's financial profile remains strong because of healthy profitability and return indicators, no fund-based borrowings, comfortable liquidity and strong debt coverage metrics.

Competitive advantage due to high entry barriers - BEL continues to enjoy advantage over its competitors due to its dominant market position, proven track record and association with the armed forces, established infrastructure and manufacturing facilities, and strong R&D capabilities.

Credit challenges

High dependence on defence sector for orders - The Indian defence sector is BEL's major customer. In case of any changes in the procurement policy of the defence forces, the company's revenue and order book position can be adversely impacted because of reduced market share. Due to the high concentration of the Government sector orders, BEL's revenue booking and cash flows are vulnerable to delays in project execution or final payment clearance in some cases. Due to the long gestation period of the projects, the revenues and cashflows are exposed to non-uniformity and lumpiness. company s

High working capital intensity - BEL's working capital intensity remains elevated due to an increase in receivables and unbilled revenues on account of long gestation periods for the orders executed. Nonetheless, the company has been able to manage its working capital requirements through its internal cash accruals and no utilisation of fund-based working capital limits in recent past.

Vulnerability of operating profit margins - BEL's operating profit margins remain vulnerable to adverse fluctuations in foreign exchange, lower profitability in certain segments and high level of cost overheads.

Liquidity position: Strong

The liquidity profile of BEL is strong, supported by comfortable cash flow from operations, which are expected to be adequate to meet the capital expenditure outlay and dividend outflows. The company had cash and bank balances of more than Rs 1,600 crore as on March 31, 2020. The company also has sanctioned and unutilised fund-based borrowing facilities of Rs 500 crore. Given the low leverage, the company would be able to access additional bank borrowings for capital expenditure or working capital requirements, should the need arise.

Rating sensitivities

Positive factors Not applicable.

Negative factors The ratings can be downgraded if there is any significant stretch in receivable cycle of the company due to delay in payments by customers or change in strategic importance of BEL to the Indian defence sector reflecting in lower order inflows and revenues. Specific credit metrics include increase in Total Debt / OPBITDA to more than 0.5 times on sustained basis.

Analytical approach

Analytical Approach	Comments
Applicable Rating Methodologies	Corporate Credit Rating Methodology
Parent/Group Support	Not applicable
Consolidation/Standalone	For arriving at the ratings, ICRA has considered the consolidated financials of BEL. As on March 31, 2020, the company had two subsidiaries and two associates that are enlisted in Annexure-2.

About the company

BEL, a defence public sector undertaking (DPSU), was established in 1954 under the Ministry of Defence, the GoI, to cater to the electronic equipment requirements of the defence sector. The GoI remains BEL's largest shareholder with the current shareholding of 51.14%. BEL was conferred the Navratna PSU status in June 2007.

BEL is the dominant supplier of radar, communication and electronic warfare equipment to the Indian armed forces. The company has nine manufacturing units across India and two research units. The Bangalore and the Ghaziabad units are BEL's two major units, with the Bangalore unit contributing the largest share to the total revenue and profits.

Key financial indicators

	Audited	Audited	Provisional
BEL consolidated	FY2019	FY2020	9M FY2021
Operating Income (Rs. crore)	12,164.2	12,967.7	7,191.2
PAT (Rs. crore)	1,886.7	1,824.7	731.6
OPBDIT/OI (%)	23.9%	21.4%	17.1%
PAT/OI (%)	15.5%	14.1%	10.2%
Total Outside Liabilities/Tangible Net Worth (times)	1.2	1.3	NA
Total Debt/OPBDIT (times)	0.0	0.0	0.0
Interest Coverage (times)	182.6	362.5	1,596.9

PAT: Profit after Tax; OPBDIT: Operating Profit before Depreciation, Interest, Taxes and Amortisation, NA: Not Available

Status of non-cooperation with previous CRA: Not applicable

Any other information: None

Rating history for past three years

				Current Rating (FY2021)			Chronology of Rating History for the past 3 years
	Instrument	Type		Amount Amount Outstanding Date & Rating in Rated as of Jan 31, (Rs. crore) 2021		Date & Rating in FY2020	Date & Rating in FY2019	Date & Rating in FY2018
				(Rs. crore)	17-Feb-2021	17-Feb-2020	15-Feb-2019	22-Feb-2018
1	Fund-based	LT	500.0	0.0	[ICRA]AAA (Stable)	[ICRA]AAA (Stable)	[ICRA]AAA (Stable)	[ICRA]AAA (Stable)
2	Unallocated	LT	300.0	-	[ICRA]AAA (Stable)	[ICRA]AAA (Stable)	[ICRA]AAA (Stable)	-
3	Term Loan	LT	0.0	-	-	[ICRA]AAA (Stable)	[ICRA]AAA (Stable)	[ICRA]AAA (Stable)
4	Non-fund based	ST	3,500.0	-	[ICRA]A1+	[ICRA]A1+	[ICRA]A1+	[ICRA]A1+
5	Commercial Paper	ST	0.0	-	[ICRA]A1+; withdrawn	[ICRA]A1+	[ICRA]A1+	[ICRA]A1+

Complexity level of the rated instrument

ICRA has classified various instruments based on their complexity as "Simple", "Complex" and "Highly Complex". The classification of instruments according to their complexity levels is available on the website click here

Annexure-1: Instrument details

ISIN No	Instrument Name	Date of Issuance / Sanction	Coupon Rate	Maturity Date	Amount Rated (Rs. crore)	Current Rating and Outlook
NA	Fund-based / CC	-	-	-	500.0	[ICRA]AAA (Stable)
NA	Unallocated	-	-	-	300.0	[ICRA]AAA (Stable)
NA	Non-fund based	-	-	-	3,500.0	[ICRA]A1+
NA	Commercial Paper	-	-	-	0.0	[ICRA]A1+; withdrawn

Source: Company

Annexure-2: List of entities considered for consolidated analysis

Company Name	BEL Ownership	Consolidation Approach
BEL Optronic Devices Ltd.	100.00%	Full Consolidation
BEL - Thales Systems Ltd.	74.00%	Full Consolidation
GE BE Private Limited	26.00%	Equity Method
Defence Innovation Organisation	50.00%	Equity method

Source: BEL annual report FY2020

Note: ICRA has taken a consolidated view of the parent (BEL), its subsidiaries and associates while assigning the ratings.

ANALYST CONTACTS

Shubham Jain +91 124 4545306 [email protected]

Nishant Mishra +91 80 4332 6408 [email protected] Mathew Kurian Eranat +91 80 4332 6415 [email protected]

RELATIONSHIP CONTACT

L Shivakumar +91 22 6114 3406 [email protected]

MEDIA AND PUBLIC RELATIONS CONTACT

Ms. Naznin Prodhani Tel: +91 124 4545 860 [email protected]

Helpline for business queries

+91-9354738909 (open Monday to Friday, from 9:30 am to 6 pm)

[email protected]

About ICRA Limited:

ICRA Limited was set up in 1991 by leading financial/investment institutions, commercial banks and financial services companies as an independent and professional investment Information and Credit Rating Agency.

Today, ICRA and its subsidiaries together form the ICRA Group of Companies (Group ICRA). ICRA is a Public Limited Company, with its shares listed on the Bombay Stock Exchange and the National Stock Exchange. The international Credit Rating Agency Moody's Investors Service is ICRA's largest shareholder.

For more information, visit www.icra.in

Registered Office

1105, Kailash Building, 11th Floor; 26 Kasturba Gandhi Marg; New Delhi 110001 Tel: +91 11 23357940-50

Contents may be used freely with due acknowledgement to ICRA.

ICRA ratings should not be treated as recommendation to buy, sell or hold the rated debt instruments. ICRA ratings are subject to a process nion on the relative capability of the issuer concerned to timely service debts and obligations, with reference to the instrument rated. Please visit our website www.icra.in or contact any ICRA office for the latest information on ICRA ratings outstanding. All information contained herein has been obtained by ICRA from sources believed by it to be accurate and reliable, including the rated issuer. ICRA however has not conducted any audit of the rated issuer or of the information provided by it. While reasonable care has been taken to ensure that the information herein is true, such , express or implied, as to the accuracy, timeliness or completeness of any such information. Also, ICRA or any of its group companies may have provided services other than rating to the issuer rated. All information contained herein must be construed solely as statements of opinion, and ICRA shall not be liable for any losses incurred by users from any use of this publication or its contents. of surveillance, which may lead to revision in ratings. An ICRA rating is ^a symbolic indicator of ICRA' ^s current opi information is provided 'as is' without any warranty of any kind, and ICRA in particular, makes no representation or warranty

AI assistant

Bharat Electronics Ltd. Capital/Financing Update 2021

60828_rns_2021-02-18_62cc8ab3-c26c-41da-a3cb-ebb075b2267b.pdf

प्रति To,