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BLS International Services Ltd — Audit Report / Information 2022
Nov 8, 2021
60423_rns_2021-11-08_d77eacec-5070-4612-a26c-86d851fcdc22.pdf
Audit Report / Information
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November 08, 2021
| National Stock Exchange of India Ltd., Exchange Plaza, C-1 Block G, Bandra Kurla Complex Bandra [E], Mumbai – 400051 |
BSE Ltd., Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai - 400 001 |
Metropolitan Stock Exchange of India Ltd., Vibgyor Towers, 4thFloor, Plot No. C62, G - Block, Opp. Trident Hotel, Bandra Kurla, Complex, Bandra (E), Mumbai – 400098 |
|---|---|---|
| NSE Scrip Symbol: BLS | BSE Scrip Code: 540073 | MSE Scrip Symbol: BLS |
- Subject: Disclosure under regulation 30 of SEBI LODR Credit Rating
Dear Sir / Madam,
Pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, We enclose herewith the relevant credit rating rationale letter dated November 03, 2021 received by the Company from CRISIL. Rating action is as under:
| Total Bank Loan Facilities Rated | Rs. 200 Crore |
|---|---|
| LongTerm Rating | CRISIL A-/Stable(upgraded from ‘CRISIL BBB+/Stable) |
| Short Term Rating | CRISIL A2+(Reaffirmed) |
The Rating Rationale of CRISIL dated 03.11.2021 for revision in credit rating is enclosed.
You are requested to take the same on your records.
For BLS International Services Limited
Digitally signed by Dharak Dharak Arvind Mehta Arvind Mehta Date: 2021.11.08 12:49:23 +05'30' ……………………… Dharak A. Mehta Company Secretary and Compliance Officer ICSI Membership No.: ACS40502
Encl: as above
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11/8/21, 11:09 AM
Rating Rationale
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Rating Rationale
November 03, 2021 | Mumbai
BLS International Services Limited
Long-term rating upgraded to 'CRISIL A-/Stable'; short-term rating reaffirmed
Rating Action
| Rating Action | |
|---|---|
| Total Bank Loan Facilities Rated | Rs.200 Crore |
| Long Term Rating | CRISIL A-/Stable(Upgraded from 'CRISIL BBB+/Stable') |
| Short Term Rating | CRISIL A2+(Reaffirmed) |
1 crore = 10 million
Refer to Annexure for Details of Instruments & Bank Facilities
Detailed rationale
CRISIL Ratings has upgraded its long-term rating on the bank facilities of BLS International Services Limited (BLS; part of the BLS International group) to ‘CRISIL A-/Stable’ from ‘CRISIL BBB+/Stable’ and reaffirmed the short-term rating at ‘CRISIL A2+’.
The upgrade in rating is driven by the gradual improvement in the business risk profile on account of diversification into new business segments and addition of clients in these segments. Business of the group, which earlier only consisted of visa processing, is now diversified into consular services, E-Governance services (entered in fiscal 2017) and banking correspondent services (fiscal 2019, resultantly the contribution from visa and consular business has dropped to 85%.
The upgrade in the rating also factors in the revival in visa business from the second quarter of fiscal 2022 post a significant decline in fiscal 2021. Since visa and consular services business contributes 80-85% to total revenue, topline for fiscal 2021 declined 38% to Rs 489 crore from Rs 793 crore in fiscal 2020 due to the severe impact of the Covid-19 induced disruptions globally on the travel and tourism industry. However, the group has shown sufficient track record of revival in business and has reported operating income of Rs 369 crore in the first half of fiscal 2022, improved by 101% from Rs 183 crore in the corresponding period of the previous fiscal. Similarly, an earnings before interest, tax, depreciation and amortization (EBITDA) of Rs 46.4 crore was reported in the first half of fiscal 2022 (growth of 184% compared to Rs 16.3 crore in the corresponding period of the previous fiscal). The group is expected achieve revenue of upwards of Rs 750 crore along with operating margin of 13-14% for fiscal 2022.
Credit profile continues to be supported by healthy financial risk profile reflected by nil gearing and superior debt protection metrics owing to strong networth and zero debt as on March 31, 2021. Since all business segments have negative working capital cycle, cash generated in each of them add to the cash balance of the group. Unencumbered cash and bank balance stood at Rs 310 crore as on September 30, 2021.
The ratings reflect the established market position of the group in the visa outsourcing services sector, diversified business profile, and comfortable financial risk profile. These strengths are partially offset by the tender-based business, susceptibility to changes in regulations by the concerned ministries of various countries.
Analytical approach
CRISIL Ratings has combined the business and financial risk profiles of BLS, BLS International FZE (100% subsidiary of BLS), and their step-down subsidiaries. This is because all these entities collectively referred to as the BLS International group, are under a common management and have strong financial linkages in the form of equity share capital, revenue sharing, and loans and advances.
Please refer Annexure - List of entities consolidated, which captures the list of entities considered and their analytical treatment of consolidation.
Key rating drivers & detailed description
Strengths:
Established market position :
Set up in 2005, the BIS group is present in over 62 countries and provides services through 2,325 offices worldwide. Within a decade, it has attained a comfortable position in the visa services outsourcing market. Though it has grown considerably in a short span, sustainability of market position in the long term is a key rating sensitivity factor.
Diversified business profile:
The group offers services in visa processing, E Governance and banking correspondence. Apart from diversification into new business segments, addition of new clients in these segments has further strengthened the market position of the group. BLS group now covers over 46 missions compared to only 7 a few years back. In E Governance services, the group has three clients presently, compared to only one client 2 years ago and in the banking correspondent segment, Bank of Baroda has been added alongside the existing client - State Bank of India.
https://www.crisil.com/mnt/winshare/Ratings/RatingList/RatingDocs/BLSInternationalServicesLimited_November 03, 2021_RR_281425.html
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Rating Rationale
Comfortable financial risk profile
Financial risk profile is marked by nil gearing and strong networth of Rs 447 crore as on March 31, 2021. Debt protection metrics remained robust owing to low reliance on external debt, which led to interest coverage of 31.8 times in fiscal 2021.
Weakness:
- Tender-based business and susceptibility to changes in regulations by the concerned ministries of various countries :
The contracts with diplomatic missions are generally tender-based with a three-year tenure, and have certain prerequisites such as experience in visa outsourcing, robust credit history, adequate information technology, operational expertise, and strong background check function. This makes revenue susceptible to the risk of non-renewal of contract at the end of the term or inability to bag new contracts. Any changes in regulation or conditions of contract mid-way will thus remain a key rating sensitivity factor.
Liquidity: Strong
Liquidity is strong with healthy unencumbered cash balance of Rs 310 crore as on September 30, 2021. The group is expected to generate moderate cash accrual of Rs 85-90 crore over the medium term against nil debt obligation. Further, fund-based bank limits remain unutilised and the small limits are kept only for backup. Current ratio was also strong at 11.87 times as on March 31, 2021.
Outlook: Stable
CRISIL Ratings believes that strong financial risk profile along with established market position will continue to support the overall credit risk profile of the group.
Rating sensitivity factors
Upward factors
Revenue increases to more than Rs 900 crore while operating margin of upwards of 14% is maintained Prudent working capital management with maintenance of strong financial risk profile Continued diversification of client base across business segments
Downward factors
- Large debt-funded capital expenditure or acquisition adversely impacting the financial risk profile of the company, especially liquidity
Net cash accrual falls below Rs 50 crore on a consistent basis
About the company
Established in early 1983, BLS is a specialist provider for outsourcing visa, passport, and attestation services to Indian missions across the world. It serves the diplomatic missions by managing all administrative and non-judgmental tasks related to the entire life cycle of a visa application process.
The company was listed on the Bombay Stock Exchange, National Stock Exchange and Metropolitan Stock Exchange in 2016. BLS has operations in over 62 countries either through joint venture with a local player or through wholly-owned subsidiaries (BLS International FZE and others).
The BLS International group has reported operating income of Rs 369 crore in the first half of fiscal 2022, improved by 101% from 183 crore in the corresponding period of the previous fiscal. For the same comparative period, EBITDA stood at Rs 46.4 crore against Rs 16.3 crore.
Key financial indicators
| Key financial indi cators |
|||
|---|---|---|---|
Particulars |
Unit | 2021 | 2020 |
| Operating income | Rs crore | 489 | 793 |
| Profit after tax | Rs crore | 50 | 52 |
| PAT margin | % | 10.3% | 6.6% |
| Adjusted debt/ adjusted networth | Times | 0 | 0 |
| Interest coverage | Times | 31.81 | 25.70 |
Any other information: Not applicable
Note on complexity levels of the rated instrument:
CRISIL Ratings' complexity levels are assigned to various types of financial instruments. The CRISIL Ratings' complexity levels are available on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL Ratings' complexity levels for instruments that they consider for investment. Users may also call the Customer Service Helpdesk with queries on specific instruments.
Annexure - Details of instrument(s)
| ISIN | Name of instrument | Date of allotment |
Coupon rate (%) |
Maturity date |
Issue size (Rs crore) |
Complexity level |
Rating assigned with outlook |
|---|---|---|---|---|---|---|---|
| NA | Secured Overdraft Facility |
NA | NA | NA | 8 | NA | CRISIL A-/Stable |
| ps://www. | crisil.com/mnt/winshare/Ratings/R | atingList/Rating | Docs/BLSInter | nationalServices | LimitedNovem | ber 03, 2021RR2 | 81425.html 2 |
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11/8/21, 11:09 AM Rating Rationale NA Bank Guarantee NA NA NA 192 NA CRISIL A2+
Annexure – List of entities consolidated
| Annexure – List of entities consolidated | ||
|---|---|---|
| Names of entities consolidated | Extent of consolidation | Rationale for consolidation |
| BLS E-Services Pvt Ltd | Full | Indian subsidiaryof holdingcompany |
| BLS E-Solutions Pvt Ltd | Full | Indian subsidiaryof holdingcompany |
| BLS IT Services Pvt Ltd | Full | Indian subsidiaryof holdingcompany |
| BLS International FZE,UAE | Full | Foreign subsidiaryof holdingcompany |
| BLS International Services, UAE | Full | Foreign subsidiary of BLS International FZE |
| BLS International Services Norway AS | Full | Foreign subsidiary of BLS International FZE |
| BLS International Services Singapore PTE Ltd | Full | Foreign subsidiary of BLS International FZE |
| BLS International Services Canada INC | Full | Foreign subsidiary of BLS International FZE |
| BLS International Services Malaysia SDN BHD | Full | Foreign subsidiary of BLS International FZE |
| BLS International Services (UK) Ltd | Full | Foreign subsidiary of BLS International FZE |
| Consular Outsourcing BLS Services INC | Full | Foreign subsidiary of BLS International FZE |
| Starfin India Pvt Ltd | Full | Indian subsidiary of BLS E Services Pvt Ltd |
| BLS Kendras Pvt Ltd | Full | Indian subsidiaryof holdingcompany |
| Reired BLS International Services Pvt Ltd | Full | Indian subsidiaryof holdingcompany |
| BLS International Vize Hizmetleri Ltd. Sti.,Turkey |
Full | Foreign subsidiary of BLS International FZE |
Annexure - Rating History for last 3 Years
| Current | Current | Current | 2021 (History) | 2021 (History) | 2020 | 2020 | 2019 | 2019 | 2018 | 2018 | Start of 2018 |
|
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Instrument | Type | Outstanding Amount |
Rating | Date | Rating | Date | Rating | Date | Rating | Date | Rating | Rating |
| Fund Based Facilities |
LT | 8.0 | CRISIL A-/Stable |
-- | 24-11-20 | CRISIL BBB+/Stable |
-- | -- | -- | |||
| -- | -- | 04-11-20 | CRISIL BBB+/Stable / CRISIL A2+ |
-- | -- | -- | ||||||
| Non-Fund Based Facilities |
ST | 192.0 | CRISIL A2+ |
-- | 24-11-20 | CRISIL A2+ | 19-12-19 | CRISIL A2 |
29-03-18 | CRISIL A2 |
CRISIL A2 |
|
| -- | -- | 04-11-20 | CRISIL A2+ | 12-04-19 | CRISIL A2 |
-- | -- |
All amounts are in Rs.Cr.
Annexure - Details of Bank Lenders & Facilities
| Facility | Amount (Rs.Crore) | Rating |
|---|---|---|
| Bank Guarantee | 20 | CRISIL A2+ |
| Bank Guarantee | 75 | CRISIL A2+ |
| Bank Guarantee | 85 | CRISIL A2+ |
| Bank Guarantee | 12 | CRISIL A2+ |
| Secured Overdraft Facility | 8 | CRISIL A-/Stable |
Criteria Details
Links to related criteria
CRISILs Approach to Financial Ratios Rating criteria for manufaturing and service sector companies - CRISILs Bank Loan Ratings process, scale and default recognition Rating Criteria for Software Industry CRISILs Criteria for rating short term debt CRISILs Criteria for Consolidation
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| 8/21, 11:09 AM Media Relations |
Rating Rationale Analytical Contacts |
Customer Service Helpdesk |
| Pankaj Rawat Media Relations CRISIL Limited B: +91 22 3342 3000 [email protected] Naireen Ahmed Media Relations CRISIL Limited D: +91 22 3342 1818 B: +91 22 3342 3000 [email protected] |
Nitin Kansal Director CRISIL Ratings Limited D:+91 124 672 2154 [email protected] Akshita Jain Associate Director CRISIL Ratings Limited D:+91 124 672 2189 [email protected] Mahima Jain Management Trainee CRISIL Ratings Limited B:+91 124 672 2000 [email protected] |
Timings: 10.00 am to 7.00 pm Toll free Number:1800 267 1301 For a copy of Rationales / Rating Reports: [email protected] For Analytical queries: [email protected] |
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Rating Rationale
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Rating Rationale
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Rating Rationale
the SEBI circular, "Guidelines for Issue and Listing of Structured Products/Market Linked Debentures". The revision in rating symbols for PPMLDs should not be construed as a change in the rating of the subject instrument. For details on CRISIL Ratiings' use of 'PP-MLD' please refer to the notes to Rating scale for Debt Instruments and Structured Finance Instruments at the following link: www.crisil.com/ratings/credit-rating-scale.html
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